| For all those who're convinced the US sub-prime crisis will lead to investors flocking to the US as part of the 'flight to safety' theory, Morgan Stanley's of the view that this is the year of emerging markets, and says this is likely to be a permanent shift in the global economic leadership. As a result, it's increased its weighting for emerging markets "" as of today, the firm recommends a 6 percentage point increase in investment in emerging market equities and a 3 percentage point reduction in investment in sovereign US debt, the traditional recipient of 'flight to safety' funds. According to its analysts, while emerging markets will give an EPS growth of 16.4 per cent this year, the MSCI World will give a 10 per cent return. The flipside of this, though, is that it feels India's upside is limited, indeed MSCI's view is that Indian equity is overpriced. In which case, some more correction may not be a bad thing. |
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