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Fasdal: Don't write off emerging markets

Over the last year investors have been getting out of emerging markets. But are they missing an opportunity? Saxo's Simon Fasdal confirms there are plenty of reasons why people have stayed away from EMs including fear of higher rates, lower growth particularly in China and struggling commodity prices.

On Thursday, The Institute of International Finance predicted capital flows to emerging markets will turn negative this year - the first time since 1988. But Fasdal says the risk premium in bonds and equities now looks attractive.

Last week he warned about the risks in Brazil where there are growing concerns about the future of large corporates. The country has had a better few days and Simon believes the market has exaggerated the fear.

So what are the positive signs investors should look for if they want to get back into emerging markets? Simon says small improvements in the global economy combined with stabilising commodity prices will help both bonds and equities. EM currencies also need to improve. Russia is one of the BRIC countries that he's focusing on.

02:11 minutes
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