Urbanisation: a key driver of the continued upswing

As we all know, emerging markets have delivered very attractive returns in the last few years. The MSCI Emerging Markets Free (EMF) Index returned over 30% in both 2005 and 2006, compared to 10% and 20% respectively for the MSCI World.1 Do the prospects for 2007 look as good? We believe the 2007 returns of the asset class will be commensurate with a predicted 10% to 12% earnings growth and a 3% dividend yield.2 Barring a bout of serious overinvestment, we believe that the secular growth opportunities that abound in the emerging world, coupled with the ability of improved corporates to exe...