Korea and Mexico are the most leveraged into a recovery of the G3. The Mexican Peso reached a 6-month high Tuesday, and the Won traded near the highest level in 3 months this week, as Asian currencies climb in general.
Taiwan: International investors are covering their underweight, and China relations still have plenty of room to bring greater demand. Inflating P/E multiples could be underestimated. Short covering should lead to real capital flows based on rising valuations. Taiwan is more than just a tech story.
China: Neutral. The Chinese economy is recovering but the recovery is somewhat lopsided with weak exports and strong domestic demand. This is clear evidence that there is more to China than just the export sector, and this is reducing equity risk premium in emerging markets.
The BRICs overall look to be in a good position. India had a great election result and structural bearishness on Russia has proved misplaced. Brazil's story is powerful and retail significant.
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