Aberdeen's Kaloo: EMs have problems but will avoid a '1998 collapse'

Aberdeen head of global emerging markets Devan Kaloo has said the asset class will avoid a 1998-style collapse despite the sharp slides in currencies seen in recent weeks.

The manager of the £6.3bn Aberdeen GEM fund said three factors have been driving the region's recent underperformance: the slowdown in China, a decline in corporate profitability and, most recently, tapering concerns. However, none of these factors herald a market "collapse", he claimed, as there are "no major economic imbalances, debt and fiscal levels are far from crisis levels and policy rates are still largely accommodative". The 1997-98 crisis saw import-reliant EM nations prove ill-equipped to deal with sharp slides in their currencies - particularly given many exchange rates we...