Fishing in frothy waters

摘要

In the violent financial storms of October last year, when concerns about America's financial system were at their peak and shares were slumping amid fears about corporate misdeeds, unsustainable debts and economic growth, few expected shares to bounce back sharply. But bounce they have. America's S&P 500 index has climbed by 35% from its low on October 9th 2002. Stockmarkets in other developed countries have risen by a touch more. However, emerging markets have made their rich-country counterparts look leaden. Having bottomed on the same day, they have since jumped by 60%, driven partly by investors from rich countries. Despite having been bitten badly in the Mexican crisis of 1994-95, the Asian crisis of 1997, and the Russian debacle of 1998, these investors have decided that the prospects for many emerging markets are good and the rewards irresistible. Better yet, they think, the targets of their affection are more stable, economically and politically, than they were.