A pedestrian passes retail stores closed to prevent the spread of coronavirus in the Eminonu district of Istanbul, Turkey, on Wednesday, March 25, 2020. Turkish manufacturers confidence in the economy has plunged the most since the 2008 global financial crisis, the first key piece of data reflecting the coronaviruss toll on local businesses. Photographer: Kerem Uzel/Bloomberg
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Emerging stocks are flashing a 2008 financial crisis signal
The MSCI EM Index has tumbled 31% this year so far, underperforming its developed-nation counterpart which is down 18%, as the strong dollar, stubborn inflation and slowing growth lessen the appeal of developing-nation equities.
By Srinivasan Sivabalan and Farah Elbahrawy
(Bloomberg) — An equity valuations signal suggests things are about to get a lot worse for emerging-market investors before getting better.
The price-earnings ratio of the benchmark MSCI Emerging Markets Index, based on trailing 12-month profits, has fallen below its price-earnings ratio based on estimated earnings for the next 12 months, showing that analysts expect earnings to fall faster in the future than currently.
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