So here’s an interesting one from a recent note.
We think the aim here is to get into the upper left-hand quadrant (other factors permitting) – where there’s a decent current account balance to help the country through recession and P/Es are still relatively low. Hence ML’s favourite emerging market – China. From the note:
Looking for a reasonable cheap market with a chunky current account surplus, stimulus in the offing and a stable exchange rate? China’s got all that. In addition our Global Economic team forecasts China will account for over 80% of global growth in 2009; consumer is unconstrained by debt; the economy unconstrained by banks. China is thus our favorite EM, at least until the global cycle turns.