China standing out among emerging markets

Lotus flower

Like those almost everywhere else, emerging markets (EMs) suffered a coronavirus shock in March.

Having plunged by nearly a third in the early part of the month, however, EM share prices partly recovered towards the end. Promises of large-scale monetary and fiscal stimulus in the US arrested the declines, but EM stocks still had a torrid start to 2020. As a group, they ended the first quarter down 23.6% in US dollar terms. On the other hand, when we look at them in isolation, China’s A-shares were more resilient. Despite China’s status as the source of the pandemic, they fell less than half as much.

China has moved quickly to bring the virus under control. While a few other EM countries, especially in Asia, have gone into lockdown early, a number have been slower to respond. And so we expect that even while most EMs are ramping up containment measures, coronavirus will continue to spread.

View Full Article – published by Aberdeen Standard Investments on 8th April 2020