Subdued EM valuations may persist: IIF report

Tokyo

THE New Year began with a bang in financial markets - not the sound of celebratory fireworks signalling that 2016 will be a year of positive gains but more the implosion of emerging markets, according to a new report by the Institute of International Finance (IIF) in Washington.

Last week's 7 per cent slide in emerging market equities "has brought prices back to 2009 levels, and price/earnings valuations to just 60 per cent of those in mature markets", says the IIF, which speaks on behalf of many of the world's leading banks and other financial institutions.

"Rising debt levels and signs of 'premature ageing' in emerging markets mean that subdued valuations may persist for some…