Emerging market shares could double in 2 years, says BofA-ML

Since 2016, EM equities have outperformed global ones by 27 per cent

Emerging market (EM) stocks have surged 60 per cent since early 2016 but equity strategists at Bank of America Merrill Lynch (BofA-ML) believe there are more legs to the rally.

“We think a potential doubling is likely in the next two years, to mirror the trajectory of prior bull markets,” say its equity strategists Ajay Kapur, Ritesh Samadhiya and Aritra Baksi.

The note containing their analysis says this bull market in Asian and EM equities is similar to six others since 1976. The average rise has been 3.3 times in bull markets, lasting 42 months, leaving room for sharp rises from even