This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
See Cramer's multi-million dollar portfolio for FREE and get his new book Get Rich Carefully! Learn More

Emerging Markets: No Crisis to See Here

NEW YORK (The Street) -- Are emerging markets on the cusp of another crisis? No, according to Nomura analysts, though they expect weakness to persist for some time.

Despite recent market tremors, the analysts suggested a "crisis dynamic" will be avoided for several reasons. These include greater differentiation by investors between emerging economies vs. the indiscriminate selling that occurred last June (see dive below) at the first hint of Federal Reserve stimulus tapering.

In addition, emerging market banks continue to extend loans at a healthy pace, Jens Notdvig, Nomura's global head of G10 foreign exchange strategy, told clients. He noted that several countries -- such as Turkey and Brazil -- are beginning to normalize policy after years of very low interest rates, while balance sheets across emerging economies are generally in decent shape.

The weakness in emerging market assets has also been consistent with moves in global risk assets (such as the jump in the yen and gold) rather than showing clear evidence of underperformance, Nordvig argued.

On the flipside, many fund managers still steer clear of emerging market economies -- especially the so-called fragile five of Brazil, Turkey, Indonesia, India and South Africa -- which carry high current account deficits in favor of more stable developed markets such as Europe, Japan and the U.S. On a longer-term basis, they acknowledge clear appeal of backing faster growing emerging economies relative to developed markets.

This isn't to say there aren't pressure points in emerging markets -- check out the jump in foreign currency debt for Turkey and Hungary below.

Nordvig also warned of lingering risks in the most significant emerging economy -- China -- given its recent weak economic data. Overall, however, he reiterated that the general situation across emerging markets does not have crisis-like characteristics.

"We think value is starting to be created, especially (in certain currencies)," he said.

--- By Jane Searle in New York

Stock quotes in this article: EMX 

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
DOW 16,408.54 -16.31 -0.10%
S&P 500 1,864.85 +2.54 0.14%
NASDAQ 4,095.5160 +9.2910 0.23%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs