Emerging market stocks aren't typically popular when investors are in a "risk off" mindset. As the name suggests, the regions in question have not yet reached the same level of economic development achieved by countries such as the United States, Germany, or Japan. This indicates that a great deal more may go wrong if and when the current tendencies in global development hit a block.
Despite the inherent dangers, it is indisputable that developing markets have vast untapped potential. In point of fact, in 2022, when the majority of stock markets across the world were collapsing, the developing market in Turkey was the one that held its own. In particular, the iShares MSCI Turkey ETF almost doubled in value during a year when the S&P 500 index declined by around 20%.
This is not to argue that developing markets will always fare better than developed ones. However, this demonstrates that a strategic wager on fast-growth stocks in Asia, South America, or elsewhere can be profitable even in a volatile market environment. Below you will find top emerging market stocks.
Alibaba Group Holding Ltd
Even though the global economy is experiencing difficulties, Alibaba has regained its footing and appears to be in good shape in 2023, despite the fact that the company has fallen on hard times in recent years. To begin, China's "zero COVID" restrictions are being loosened, which might indicate an uptick in spending across the board. Additionally, the Chinese economy is showing signs of stabilization. Because BABA is the dominant e-commerce platform in the country, this will naturally drive up the stock price. Because it is currently trading at levels that have not been seen since 2015, the stock may now be trading at a low price to pass up.
In addition, much like Amazon.com, Inc., Alibaba Group Holding Limited has a thriving cloud business that will enable it to ride the wave of increased corporate expenditure in the area beyond the expansion of retail sales alone. Because of this, the corporation is difficult to ignore even though its share price has declined over the last several years.
ICICI Bank Ltd
In addition to China's status as an economic giant, India should also be recognized as the biggest democracy on the global stage. Because it is one of the largest financial institutions in the country, ICICI Bank, which has its headquarters in Mumbai, is in a good position to profit from any economic expansion that may occur in the area. In addition to standard banking and lending, it also offers credit card management, investment banking, pension management, and life insurance services.
During the past year, this stock has seen gains of approximately 15%, while the S&P 500 has seen roughly the same movement in the opposite direction. This is due, in part, to the fact that projections for India's GDP growth are currently running at 5.5% for this year and 6.5% for the year 2024. There is no assurance that such forecasts will come true, but if they do, ICICI should maintain its position as the market leader.
Sigma Lithium Corp
Compared to other emerging markets, Brazil has a national GDP that ranks it in the top 10 of the world's economies. Brazil's economic production is greater than Canada's, and just like Canada, Brazil relies on the resourcefulness of its lands and the commodities that may be extracted from those fields.
However, when looking to the future, it is possible that betting on coal or oil companies is not the best strategy in this age of global warming. Instead, Sigma Lithium, a materials firm specializing in the battery metal used in electric cars, cellphones, and other high-tech equipment, is the finest stock in Brazil right now. Sigma Lithium also ranks among the top stocks in the world. As a result of riding this lithium megatrend, SGML stock has more than quadrupled in the last year. This company should continue to enjoy great demand regardless of environmental legislation in different countries throughout the globe.
Trip.com Group Ltd
Similar to the online booking services offered in English that you could make use of, Trip.com is a Shanghai-based company that focuses on the travel industry. As the company continues to recover from the travel restrictions imposed in previous years, it is anticipating a 70% increase in revenue for this year. However, remember that this may only put it back to where it was around the 2018 position. Some investors are optimistic about the company's long-term growth prospects, and as a result, they have pushed up the share price by more than sixty percent in the last year. However, this cyclical play on an emerging market is undeniably more exciting than others.
