Will EM investors now focus on competitiveness?

ON EM

Corporate competitiveness is likely to be a key concern for emerging market investors, usurping the focus on rising consumption says Skagen's Hilde Jenssen.

Each December the market has come to expect the lowering of earnings estimates as research analysts face reality and clear the slate for the following year. At the end of 2013, however, there were fewer downward revisions than usual, which may indicate bad news is already priced in to EM equity valuations and this year could mark the end of the de-rating seen in 2013. Moreover, just as local consumption dominated 2013, we expect global competitiveness will be a key theme for 2014. This should benefit stronger, well-run companies, which we would expect to be rewarded in valuation terms...