The EMs set to weather global headwinds… and those in the firing line

Winners and losers

Mona Shah examines the diverging fortunes of emerging market countries as the strong dollar and an expected rise in US interest rates take their toll.

Developing markets were mauled by the rising dollar and poor sentiment in the final quarter of last year, consigning the 'noughties' boom days to history. An 8% drop in the MSCI Emerging Market index over the final three months of 2014 was accompanied by a basket of 13 of the larger developing world currencies slumping 14% against the US dollar. And despite those considerable falls, both the index and the currencies have further to fall, we believe.     Unbalanced economies Many developing nations, including China, are suffering from an overhang of debt. Indeed, in the lead up...