Morgan Stanley says stocks in emerging markets more attractive now

Channel News Asia
Morgan Stanley says stocks in emerging markets more attractive now
By Pamela Almeda, Channel NewsAsia | Posted: 12 November 2008 2201 hrs

SINGAPORE: Morgan Stanley said stocks in emerging markets, especially in Asia, are looking more attractive given the recent market slump.

The main stock index in the region – MSCI Asia Pacific Ex-Japan Index – has fallen by as much as 65 per cent from its peak in October last year.

Morgan Stanley said this decline is larger than what was seen during the 1997/1998 Asian Financial Crisis, and is due to irrational pessimism among investors.

But the financial services firm added that measures by governments in the region to support economic growth are seen as positive.

Jonathan Garner, head, Global Emerging Markets Equity Strategy, Morgan Stanley, said: "Within emerging markets, we're certainly getting a lot more positive on Asia. We've been doing that from August onwards, particularly on our focus list - buying back Asian technology and financial stocks, reducing materials and energy exposure in EMEA and Latin America.

"I think the good news for emerging markets is that we are still going to have growth, but it's going to be much slower than what we had in 2006 and 2007. We're worried about revisiting the lows.

"We've already bounced very significantly from the middle of October. We're up about 30, 35 per cent from the lows and we're getting moves on a weekly basis that are as big as typical annual moves in the market."

- CNA/so