“Oscillation between a recovery-driven euphoria of mid-January towards coronavirus-induced growth fears, and then initial stabilisation suggests our 2020 theme is intact. We remain EW on EM, while cautious about short-term earnings risks and awaiting signs of production and travel normalisation,” the brokerage said in a note.
has lowered the year-end price target for the MSCI EM index from 1,150 to 1,100. “Retain EM as equal-weight (upgraded from underweight in November) as a cyclical trade, although expect W-shaped recovery profile to result from 2019-nCoV coronavirus.
Recently lowered earnings growth forecasts and now well-below consensus for all coverage markets
except Japan,” the note added.