New flows to emerging market bond funds reached an all-time high last month. Weekly flows to emerging market equities neared $2 billion. Even central and eastern Europe is benefiting from the predilection for emerging markets.
At around 2.1 times book value and 12 times forward earnings, share prices across emerging markets suggest there is leeway for more. When emerging market valuations peaked in the 1990s, prices were around 20 times earnings and in 2007 they were around 14 times earnings. On both occasions, prices were around three times book value.
Interest rates will remain low in developed countries, assuming...
