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January was the first time in 6 months that the outpaced the S&P 500 as it gained 0.6%. Investors into emerging market stocks and bonds, after an outflow of $11 billion in December. Analysts note that low commodity prices allow for quick growth in these emerging economies. As emerging markets go through reforms in order to stabilize their currencies or stimulate growth in their economies, investors see this as an opportunity to obtain higher returns.
Some countries receiving a greater amount of focus from investors are India, Indonesia, Mexico, and Taiwan. is an oil importer and has a growth driven government, putting it in a good position for the coming months. has a government focused on reform, which attracts investors during this global growth stage. As for and , analysts explain that these economies will receive a boost from a recovering economy. Also for investors was the European Central Bank’s decision to adopt a 1 trillion euro stimulus plan. This is seen as a stabilizing action in the global financial markets.
The declining oil prices are seen as a major concern by some, but of countries meeting the emerging markets definition, and are the only two that are major oil exporters. As a whole, the current level of oil prices should benefit most developing countries, allowing them to import the commodity at a low price. An update on oil prices can be seen in our recent post “”. The global oil market is oversupplied by approximately 1.5 million barrels a day as fracking methods become more productive and more widely used. Prices are expected to remain low until the global production slows or the global economy turns around.
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