Buy Emerging-Market Stocks as Pessimism Peaks, Barclays Says
- Outflows signal six-month excess returns over advanced nations
- Strategist Ian Scott sees similarities to past market rebounds
Stocks prices are displayed on an electronic stock board at Asia Plus Securities PCL headquarters in Bangkok, Thailand, on Tuesday, Feb. 19, 2013. Thailand’s baht halted a three-day decline and government bonds rose for a second day amid optimism an improving local economy and relatively higher yields than developed nations will spur more fund inflows.
Photographer: Dario Pignatelli/BloombergA buy signal seen only four times in the past 12 years is flashing again in emerging-market stocks, according to Ian Scott of Barclays Capital.
Things got so bad, they’re going to turn around, according to the London-based equity strategist. In the worst quarter for equities in four years, money flows in emerging-market funds are trailing developed nations by a degree unmatched except in 2004, 2005, 2008 and 2014, Scott says, citing EPFR Global data. Yet on every one of those occasions, shares outperformed developed markets by at least 9 percent in the following six months, he says.