Emerging market bond and equity funds received heavy inflows in January after a dry patch last year, aided by China's reopening and softening inflation pressures worldwide.
MSCI Emerging Markets and World Index's PE https://fingfx.thomsonreuters.com/gfx/mkt/lgpdknxoavo/MSCI%20Emerging%20Markets%20and%20World%20Indexs%20PE.jpg According to Refinitiv data, emerging market firms are expected to post 11.9 per cent profit growth in 2023, much higher than U.S. firms' growth of 8.9 per cent and European firms' -2.2 per cent.
The MSCI Emerging markets index is up about 6 per cent this year, but the index's forward 12-month is still trading at a 22 per cent discount to the MSCI World index. Jason Pang, a fixed-income portfolio manager at J.P Morgan Asset Management, said he is bullish on Indonesian and Malaysian government bonds as their central banks look to wind down their monetary tightening due to easing inflation pressures.