Emerging markets stocks – investors more optimistic despite geopolitical risks

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Written by Sebastian Wanke | 16 June 2014
Posted in Special research

sentix Emerging Markets Equities Sentiment rises in June after a slight setback in the previous month. Investors now have dropped their emerging-markets fears weighing on the asset class at the beginning of the year. This is a positive sign for the future performance of the regions' stocks, all the more as it happens against the emergence of new geopolitical question marks.

sentix Emerging Markets Equities Sentiment rises from 5.5 to 9.0 points in June. This improvement occurs against the background of the advent of new geopolitical question marks like the current developments in Iraq, for instance. But obviously, investors do not perceive them as a dominant burden for the asset class as a whole or, at least, for the heavy weights among the emerging-markets countries. This is a remarkable sign of robustness for investors' expectations. The elections in India, Ukraine's new president and probably even the World Cup in Brazil are currently more important than the still existing geopolitical risks (Iraq, Syria). After the pronounced fears surrounding the emerging markets at the beginning of the year the rebound in stock prices of these regions should now continue.

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Background

sentix Emerging Markets Equities Sentiment is surveyed on a monthly basis since April 2007 and part of the sentix Asset Class Sentiment survey which is regularly conducted around the second Friday of each month. Further indicators of the sentix Asset Class Sentiment family of indices are sentix Bitcoins Sentiment, sentix Commodities Sentiment, sentix Credits Sentiment, sentix Emerging Markets Bonds Sentiment, sentix IPO Sentiment, and sentix Real Estate Sentiment.

Participants in the sentix surveys on asset class sentiment may choose a category from a range of 1 to 5 to show how inclined they are towards an asset class in relation to the others. The indicator may fluctuate between -100 and +100 while category number 3 of the given range marks the zero line and signals neutrality.

The current survey was conducted from June 12 to June 14, 2014. 906 investors took part in it.

 

 

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