UBS eyes reflation boost for emerging market stocks

MSCI's EM index has already jumped nearly 10% this year and UBS is forecasting 32% earnings growth for emerging market firms this year

  

LONDON- Swiss bank UBS said it expected the current rebound in global inflation to drive an additional "high-single-digit" jump in emerging market stocks in the next 6-12 months.

MSCI's EM index has already jumped nearly 10% this year and UBS is forecasting 32% earnings growth for emerging market firms this year on average as economies bounce back from 2020's COVID slump.

"We are positioning for a high-single-digit upside in the MSCI EM index for the next 6–12 months," UBS's Chief Investment Officer of Global Wealth Management Mark Haefele said in a research note.

He added that UBS expected the MSCI EM 'value' index, which includes firms that traditionally benefit the most from cyclical economic upturns, to outperform the wider MSCI EM index by 7–10 percentage points over the same timeframe.

(Reporting by Marc Jones, editing by Karin Strohecker) ((marc.jones@thomsonreuters.com; +44 (0)20 7513 4042; Reuters Messaging: marc.jones.thomsonreuters.com@reuters.net Twitter @marcjonesrtrs))

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