Several emerging market central banks lowered interest
rates during March, 2014
During March, the MSCI Emerging Markets index
The US dollar appreciated against most currencies.
Markets of Colombia and Turkey stood out for their
strong gains during the month.
Country specific factors continue to influence emerging
Markets in Egypt and Russia among worst performers
Latin American markets did well in March. MSCI indices
for Mexico and Brazil rose by 5.52% and 10.73%,
respectively in US dollar terms.
This year, general elections in South Africa, Brazil
and India, and presidential elections in Indonesia
and Turkey mean that these nations may face some
instability, potentially creating sharp currency
depreciations in a similar fashion to that suffered by the
Thai baht following the end of last year’s protests.
Political events, like India’s 2009 polls which led to a 15
% jump in the stock market on the day of the election
results could prove to be an attractive buying opportunity
for those willing to bet on emerging economies
Markets are beginning to differentiate among emerging countries
based on their sensitivity to global liquidity conditions. The intrinsic
elements of the financing structure and the growth profile of each
economy will drive emerging economies’ risk premiums in 2014.