Emerging Markets

11/03/2010

World equities finished the month in positive territory, following the negative returns of the previous month, although market conditions were volatile. Concerns about fiscal problems in Greece and in some other eurozone countries weighed on sentiment, as did ongoing concerns about policy tightening in China. Emerging Markets delivered a positive return against this background although it lagged developed markets, despite commodity price strength. Latin American markets were among the best performers, in particular Peru, Brazil, Mexico and Colombia. Generally strong performance from commodity-related and financials stocks boosted the performance of these markets, while in Mexico, data was released showing industrial production continuing to recover, coming in at 1.6% year-on-year in December. In Asia, the Philippines and Thailand were the best performing markets, as they rebounded from weakness in the previous month. In the Philippines, strong export data was released, showing growth of 23.6% year-on-year in December. In Thailand, economic news included fourth quarter GDP growth coming in at 5.8% year-on-year. Emerging European markets were the weakest performers over the month. Turkey, Poland, Hungary and the Czech Republic underperformed against the background of concerns about fiscal problems within the eurozone, while domestic political tensions also weighed on the Turkish market. The energy-dominated Russian market also underperformed despite a rise in oil prices over the month.