Bloomberg is reporting that the emerging markets have increased their share in the world market capitalization from 18% at the start of 2009 to 24% now. This is the highest since 2003, when Bloomberg began compiling data for this. This is seen as a signal of the confidence of investors to the emerging markets alongside the risk appetite that is coming back in the market.
Furthermore, while more volatile, the emerging markets have proven to be more attractive by outperforming the markets of developed countries.
From Bloomberg:
Stocks rallied from Sao Paulo to Shanghai in 2009 after policy makers cut interest rates and enacted stimulus plans to cushion economies from lower exports. The MSCI Emerging Markets Index rose 35 percent, while the MSCI World Index of developed economies added 2.9 percent.
We can also attribute the interest to the positive growth projections – 1.6 this year and 4 percent next year. The developed countries, however see a contraction of 3.8% and zero growth for 2010.
The entire report HERE.
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