AUCKLAND, NEW ZEALAND / ACCESSWIRE / February 7, 2018 / Emerging markets (EM) experienced a notably strong performance within the past 16 months, outperforming those that have been developed (as measured by the MSCI World Index) for a second consecutive year. As globalization continues to diminish the trade and investment barriers between smaller economies and international supply chains, these markets remain poised for more gains in 2018. Abacus-international, a leading broker of CFDs, discusses the year ahead for EM, highlighting the factors behind positive projections in a number of different financial sectors.

The year of 2017 was witness to an extended surge from EM equities, evidenced by the growing number of appreciating trends that initially began to take shape in 2016. "The environment for emerging markets was great in 2017, with the Goldilocks factors of economic growth and low inflation present in industrialized countries," said Hideo Shimomura, a chief fund manager in Tokyo at Mitsubishi UFJ Kokusai Asset Management Co. "The EM rally we saw this year will probably extend into 2018, but after a period of strong growth and low inflation, some adjustment will be inevitable." Other impactful drivers of the market included aspects such as the stabilization of commodity prices, a softening of the US Dollar versus other major currencies, synchronized GDP expansion worldwide, and strong relative and absolute starting valuations. Abacus-international points out that this climate stimulated an improvement in corporate return-on-equity, with a strong performance from technology stocks contributing a major boost as well.

Leading investment analysts such as Schroders expect global growth to be sustained at 3.3% in 2018, which is slightly higher than the predicted 3.2% for the prior year. This percentage will continue to support global trade, maintaining the same type of beneficial climate for emerging markets. According to a Bloomberg survey of 20 investors, traders and strategists, bonds and equities in developing countries will also stay on their upward trends, while currencies may struggle to stay in front. Continued economic recovery in countries such as Russia will remain a key part of the equation, as their record low inflation is likely to provide room for the central bank to continue easing monetary policies, stimulating both consumer consumption and investment.

In South America, regions that once burdened have helped spur on worldwide growth as their economies gradually emerge. Lower interest rates have helped consumer and business confidence in Brazil, Chile, and Argentina, all of which recently experienced record highs with equities. Elsewhere, an anticipated broadening in the Eurozone's financial recovery should continue to contribute, anchored by significant growth in the Central European emerging markets of Poland, Hungary, and the Czech Republic.

Founded in 1998 in Auckland, New Zealand, Abacus-international is a leading broker market of Contracts for Differences (CFDs,) and a specialized trader of financial products in organized and Over The Counter (OTC) stock markets. With a global team of professional financial experts, the firm identifies superior trading opportunities, while protecting the investments of their clients throughout 180 countries in Europe, Asia, Middle East, Africa and Latin America. As one of the first to open up the foreign exchange (Forex) to private investors, the company currently offers a total of 10 different platforms to trade more than 200 financial instruments.

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SOURCE: Abacus-international