Emerging-market stock valuations have fallen to less than half those of US equities for the first time in at least two decades. The MSCI Emerging Markets Index is valued at 9.9 times estimated forward earnings, while the S&P 500 Index trades at more than 20 times. The record discount reflects the AI-driven bull market in US stocks and deepening underperformance in China and Hong Kong, which together account for more than a fifth of the emerging-market benchmark. Some investors see increasingly attractive opportunities in developing economies, with money manager James Athey of Marlborough Investment Management noting that buying the MSCI EM Index is one way to diversify away from a historically rich and concentrated US market. Valuations are widely dispersed across emerging markets, with Brazil trading at 8.2 times, Argentina at 8.6, Turkey at 4, and Egypt at 8, while Taiwan, India, and Hong Kong’s tech sector trade at 17 to 18 times.
SK Hynix Inc
Taiwan Semiconductor Manufacturing Co. Ltd.
MSCI Inc