Unless you have the dollar weakening and weakening substantially, there is going to be no bull market and emerging markets. That is a simple one line, simplistic way of looking at emerging markets. Through the 90s the dollar was more or less the strong currency and there was only one market to play which was the US market. EMs went nowhere, India went nowhere, Russia was a dog market, Asia went through some degree of upswing between 94 and 96 and then they all got crushed.
Now you saw from 2002 dollar weakened, the EMs did well. The dollar strengthens, EMs don’t do well. It is as simple as that.
...Just looking at the way the world is going, you have pretty much the entire world in recession now. Looking at the China output numbers, looking at India CMIE (Centre for Monitoring Indian Economy), everything is pointing to a contraction of industrial activity. To hold out hope that the markets will have a great second half of 2009, lets get through 2008 first, lets get through the next three months of 2009 first and we will start worrying about 2009 end. There are plenty of more things to worry about now than to worry about second half of 2009.
Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the private equity and venture capital ecosystem in India. View free samples of Venture Intelligence newsletters and reports. Email the author at firstname.lastname@example.org