Citigroup analysts believe stocks in developing countries will do worse than global stocks after Donald Trump won the U.S. presidential election.
According to a report from Reuters, Citigroup thinks Trump’s trade policies could slow down global economic growth and make the U.S. dollar stronger, which might hurt investments in these countries.
The report highlighted that Saudi Arabia and India are less likely to face trade problems. Citigroup upgraded Saudi Arabia’s stock market outlook to “overweight,” meaning they see good opportunities there, while India’s rating was lowered to “neutral” because of slower earnings growth and foreign investors pulling out.
Reuters shared that Citigroup predicts India’s main stock index, the Nifty 50, could rise 6% to reach 25,000 by September 2025.
For South Africa, Citigroup sees better opportunities and upgraded its rating due to strong profit growth and benefits from China’s economic policies.
On the other hand, South Korea’s rating was cut to “underweight” because of slower profit growth and risks tied to trade with the U.S.
However, Citigroup believes Korea’s main stock index, the KOSPI, could still grow 16% by mid-2025, helped by stronger semiconductor sales and lower interest rates from the country’s central bank.
Overall, Citigroup has a “neutral” view on developing country stocks and expects the MSCI Emerging Markets Index to grow by 10% to hit 1,210 points by mid-2025, Reuters reported.
This shows some optimism but also caution, as global trade challenges continue to shape the outlook for these markets.
Credit : Reuters