Investors’ EM Weights In Need Of Re-jigging: Citi

Emerging markets have seen steady outflows since the economic data coming out of the U.S. and Europe started strengthening (and the Fed announced that tapering was on its way), but the argument that investors are shying away from EM market risk might be too simplistic. Comparing current valuations against what they were before the crisis, it’s clear that some emerging markets are faring much better than others, even with comparable earnings, and that risk is actually performing better than quality. According to Citi analysts Markus Rosgen and Yue Hin Pong, the real distinguishing factor is that investors are re-evaluating the emphasis they put on domestic demand.

Emerging Market (EM) blamed for account deficits

Current account deficits, which are...