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Monday, October 13, 2008
Morgan Stanley Upgrades EM Equities To Maximum Overweight
Polya Lesova
MarketWatch Pulse
NEW YORK -- Morgan Stanley upgraded Monday emerging market equities to the maximum overweight of 10% above the benchmark, saying that the catalysts for a rally are the action by the Group of Seven countries to underpin systematically important financial institutions as well as the oversold conditions. This is the first time that Morgan Stanley's emerging markets team has been at their maximum overweight since late April 2007. "We believe the world economy is in a painful transition to becoming emerging markets-led," said Jonathan Garner and other Morgan Stanley strategists in a report Monday. Morgan Stanley now forecasts that 100% of all GDP growth worldwide in 2009 will originate in emerging markets. "The denouement to the structural issues which have built up in developed market financial systems and economies is leading to global deleveraging and reducing demand for EM [emerging markets] assets," Morgan Stanley said. "Yet, despite the massive undershoot of the last few months, the underlying bull market in EM equities vs. both DM [developed markets] equities and EM sovereign debt, which stretches back to September 1998, is probably intact." The MSCI Emerging Markets stock index has fallen 53% this year.
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A specialist is a member of a stock exchange who works as an auctioneer for a specific stock and/or stocks. It can be an individual, partnership, corporation or group of firms.
The specialist works to maintain a "fair and orderly market" for respective stocks, matching up buyers and sellers by displaying the best "bid" and "ask" prices at its trading post. If buys are not equal to sells, the specialist evens the scale by buying or selling shares, accordingly. However, they cannot make their own transactions until all investor orders have been placed.
Gauging supply and demand, the specialist sets an opening price for the stocks in its domain. If a price has not been set by the time the market opens, the specialist can delay that particular stock's opening.
Specialists make money off the "spread," which is the difference between bid and ask prices on orders.
