Emerging market intro

The Rise of Emerging Markets and Asia


Equity-Market Size May Not Reflect the Underlying Economy


The size of a given stock market within emerging markets (EM) is not always aligned to the corresponding country’s economy. Since 1994, for example, the market-capitalization weights of Malaysia, Mexico and Brazil declined as a percentage of the MSCI Emerging Markets Index. By comparison, their changes in economic weight were less drastic. While Taiwan and Korea received higher weights in the MSCI EM Index than the sizes of their economies, China's market-cap weight in the index rose steadily and only recently caught up with its GDP share.


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