The bank’s chief strategist, Michael Hartnett, says the comparisons show that emerging markets seem inexpensive: “Brazil’s market cap barely exceeds that of Google, India’s is less than Wells Fargo’s and Turkey’s is practically the same as Starbucks,” he said. According to the research, Malaysia’s free market capitalisation is $143bn, while social network giant Facebook’s is $145bn. Turkey and coffee chain Starbucks both come in at $57bn.
But across the nine stocks and emerging market economies in the comparison, the countries just come out on top, with a total free market cap of $3.248 trillion, compared to the stocks’ $3.226 trillion.
Hartnett says that there appears to be a “buyer’s strike” as a BAML foreign exchange survey this week shows that of 250 clients, just seven per cent say that they are buyers of emerging market currencies.
And stocks already appear cheaper than those in developed markets, with a discount of around 35 per cent – which Hartnett says is broadly similar to previous major lows.