Another rout of EM markets not justified by valuations

Emerging market (EM) financial markets have come under stress once again in recent weeks as interest rate hikes in the US loom large on the horizon. Markets in the emerging world feel like a one-way bet at the moment and there may be some further losses in the coming weeks in anticipation of Fed lift off. But from a valuation point of view at least, further heavy losses are not justified and therefore unlikely to be sustained over the medium term.