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Finding Value in EM Markets: Russia Is Now The 'Cheapest' Market

EMERGING MARKETS
  • The rise in uncertainty in recent weeks has been weighing on Russian equities in the past two months, which are down 30% since their October peak.
  • Russia is now the ‘cheapest’ market according to our value scoring model (versus Turkey previously).
  • Turkish equities also remain 'cheap' based relative to other EM markets as political and economic uncertainty combined with dovish CBRT have been weighing on TRY.
  • On the other hand, Czech equities, which are currently trading at a 13-year high, mostly driven by 'hawkish' CNB and global liquidity, still appear 'expensive' according to our scoring model.
  • Indian equities remain the most expensive market, with current price-to-book and PE ratios of 3.79 and 27.79, respectively (vs. 1.81 and 13.29 for the EM MSCI index).
  • In this chart, we rank the 16 EM equity markets (15 countries + EM index - MXEF Index) from 'cheapest' to the most 'expensive' ones based on the Price-to-Book, Price-to-Sales and Price-to-Earnings ratios.

Source: Bloomberg/MNI

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