Page 19 - ISQ UK_October 2017

MSCI International Equity Indices – Country & Market Coverage

JANUARY 2022
Developed Markets Emerging Markets Frontier Markets
Europe, Central &
Americas Europe Pacific Americas Midddle East Pacific Americas Eastern Europe Africa Middle East Asia
& Africa & CIS
Canada Austria Australia Brazil Czech Republic China Argentina Bulgaria Botswana Bahrain Pakistan
United States Belgium Hong Kong Chile Egypt India Jamaica Croatia Ghana Jordan Sri Lanka
Denmark Japan Colombia Hungary Indonesia Trinidad & Estonia Kenya Kuwait Vietnam
Tobago
Finland New Zealand Mexico Israel Korea Lithuania Mauritius Lebanon
France Singapore Peru Morocco Malaysia Kazakhstan Nigeria Oman
Germany Poland Philippines Romania Tunisia Qatar
Greece Russia Taiwan Serbia Saudi Arabia
Ireland South Africa Thailand Slovenia United Arab Emirates
Itlay Turkey Ukraine
Netherlands
Norway
Source: MSCI World Index
Portugal
Spain
Sweden
Switzerland
United Kingdom

regarded as developed economy nations. Sadly, in some other copper, nickel, cobalt, and the rare earth metals. The anticipated
countries elsewhere, a combination of politics, wars, crime, and COP27 conference in Egypt in November this year may well see
corruption has been negatively impacted. Fortunately the rise of growing awareness of the essential role of the emerging mar-
knowledge and awareness is improving. kets.
As for the choices, it is much more than the ‘Belt and Road’ IMPACT ON DEVELOPED MARKETS
expenditure by the developing Chinese economy to a range of its
emerging market peers across the world. The majority of large or During 2021 only a handful of developed market central banks -
mid-cap developed market companies will observe significant including the Bank of England very modestly in December - raised
opportunities to grow their sales and profitability driven by their interest rates. By contrast nearly 35 emerging market cen-
rising populations and wealth levels in the emerging markets. tral banks collectively over 110 times during last year, raised
The smartest choice for all emerging market countries is to their interest rates, reflecting concerns about inflationary reali-
encourage local entrepreneurs to find their own products and ties and the need to maintain positive real interest rates. And
solutions. Slowly this is occurring more, reflected by the evolving whilst both the American Federal Reserve as well as (again) the
research monitoring lists of global analysts and fund managers. Bank of England look set to raise interest rates on more than one
occasion during 2022, the People’s Bank of China is far more
This is often seen by an acknowledgement that the emerging likely to continue its recent interest rate reduction. Overall this is
market world is always broader than many consider. This is not a range of noteworthy differences in a global equity market
only because of the material economic progress of countries where the average developed market multiple is at a near two
such as Taiwan and South Korea since the 1970s, but also the decade high against emerging market equivalents.
differentiation between formally defined ‘emerging markets’
and ‘frontier markets’ which are too small, risky, or illiquid to be Geopolitical risks are always heightened in the world’s emerging
generally classified as an emerging market economy, covering markets, but all countries have their opportunities and their
many countries in the Americas, Central/Eastern Europe, Africa, challenges. Attempting to work out what is correctly factored in

the Middle East and Asia such as Argentina, Bulgaria, Nigeria and and what is not is always a key investment decision insight.
Vietnam. There are reasons why frontier markets have the scope
to outperform even their formal emerging market peers during
the rest of the 2020s. KEY TAKEAWAYS:
• Most emerging markets underperformed most
The second choice is focused on the environment, which was developed markets during 2021, despite typically
discussed by around 200 different countries in Glasgow, during trading at a valuation discount.
last year’s COP26 conference. Environmental matters – if ignored
– may have a bigger impact on emerging market nations than • Emerging market investment offers a number of
any others. Many of the solutions however are global. Whilst opportunities and challenges for the 2020s.
many leading emerging markets feel that any environmental • The People’s Bank of China looks set to cut its
changes may take longer than in the developed world, it is also interest rates in 2022, in notable contrast to the
noteworthy to see the importance of the emerging market average developed market central banks.
nations in the production of key clean energy metals such as

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