For the first time in three years, developing-nation companies are beating profit forecasts, with average earnings coming in 3.6% above analysts’ projections, according to data compiled by Bloomberg.
“Vaccine rates picked up and economies reopened, which should be positive for consumer earnings,” said Dorson, a money manager at Mirae Asset Global Investments in New York.
China Construction Bank’s earnings are expected to show a 10% climb in 2021 after a 1.6% gain in 2020, and consensus forecasts for Russia’s Sberbank revenue rose by about 3% in the past three months, with further upgrades possible.
Tension still lies in results from Chinese companies, which have been hit especially hard by anxiety over the government’s regulatory tightening and concern over Evergrande’s debt troubles.
Goldman Sachs expects the MSCI EM index to reach 1 475 points in the next 12 months, or 11% higher in local currency terms, largely in line with gains forecast for developed markets.
“We are comforted to see these parts of the equity market with very steady earnings-per-share growth and performance in recent months, despite the macro headwinds from the Chinese property market and U.S.