Developing markets shine – Just as we predicted - March 13, 2016

Developing markets shine – Just as we predicted

Just some weeks ago we predicted that developing markets may shine after the big global market correction. Our press release concerning the subject was featured on Reuters, Yahoo Finance, and MarketWatch among others as well. Now, it seems that our predictions were right. Let’s see why.

Since our analysis, some other important things have happened. Commodities – lead by crude and gold – started to rise significantly. (You can see our analyses about these market movements here and here.) This helped the skyrocketing of the developing markets.

The rise can be seen on the EWZ ETF index, which is based on the large and medium firms of the Brazilian stock markets. Since 17 February, we can see a 29% rise in the prices, and after a short correction period the prices started to strengthen again.

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This is because Brazil is highly dependent on the commodities market, and the price rise we can see helps their economy and export in a great way. Since the rise of commodities is expected to continue, Brazilian market will probably go even higher.

The INDY ETF index – which is based on the 50 biggest companies of India – also had a great, 9% rise in the last 3 weeks.

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So India had a great time as well, mostly because they are at the beginning of serious structural reforms and they have a huge domestic consumption potential as well. On the other hand, rising commodity prices aren’t good for them, but the other mentioned factors can balance that and still lead to growth. This might be also the reason why Indian market “only” had a 9% rise in the last weeks.