Warrington Shaw - Emerging Market Stocks Looking Cheap

TAIPEI CITY, Taiwan, November 14, 2018 (Newswire) - Equities in the emerging markets of Asia and Latin America are looking “very cheap” according to analysts at Taipei, Taiwan-based investment boutique, Warrington Shaw. The assertion comes after investors sold holdings in emerging markets fearing financial problems in countries like Argentina and Turkey could lead to contagion in other economies in their respective regions.

Adding impetus to the selling over the last two months has been concern over the relative strength of the U.S. dollar and rising oil prices. The greenback has strengthened as the U.S. Federal Reserve has maintained its course with interest rate hikes this year. This has led to speculation that countries which have borrowed heavily in U.S. dollars are finding it more costly to repay loans denominated in dollars because they have to buy them with weaker local currencies.

According to Warrington Shaw, the recent falls in oil prices and the return of a semblance of calm to the febrile U.S. equity markets since the U.S. mid-term elections has created what it calls an ideal opportunity for investors to shop for bargains.

The company says it is eyeing opportunities in traditional sectors including retail which are using technology to improve productivity while also focusing on companies with strong balance sheets and minimal debt.

Warrington Shaw acknowledges that an escalation in the trade dispute between the U.S. and China would not be positive for the Asian region but the firm says the fundamental strength of the region’s economies means they would be able to weather any short-term dip in economic activity.