Worst, Weakest, Lowest: Emerging-Market Stock Records Smashed

(Bloomberg) --

Investors in emerging-market stocks are witnessing an unprecedented sell-off that’s totted up some eye-watering numbers.

• The benchmark MSCI Emerging Markets Index has plunged 24% so far in 2020, the worst start to a year on record, beginning in 1988.
• Even if the index doesn’t fall for another day, and maintains this level until the end of the year, it would be the biggest annual loss since the 2008 financial crisis.

• With two weeks to go before the end of the quarter, stocks have erased a combined $3 trillion, the second-biggest slump in history, after the third quarter of 2015.
• In the past 32 years, the MSCI EM gauge had posted a daily loss of 5% or more 18 times. In the past six trading sessions, it has done that three times.
• Analysts’ estimates for earnings estimates fell 2.7% last week, the largest decrease since May 2018.
• The long-term price-earnings ratio, based on inflation-adjusted earnings of the past decade, fell 10.3% to 14.4 times last week. That’s the biggest drop in valuation since October 2008.
• A record 512 stocks in the MSCI gauge have reached 52-week lows. Only three stocks are trading at their 52-week highs, the lowest number in two years.
• As many as 532 stocks traded below their lower Bollinger Band, an indicator of selling strength. The number has never been that high.

• The number of stocks in the MSCI EM gauge whose relative strength index is below 30 rose to 552 last week, a record in data going back to 1995. On Monday 483 stocks were still below that threshold.
• The 10-day historical volatility on the index has surged to an annualized 55%, the most turbulent in 12 years.
• Options traders have never been this pessimistic on emerging-market stocks. The demand for contracts that protect against a 10% decline in the iShares MSCI Emerging Markets Exchange Traded Fund increased to an all-time high relative to wagers betting on 10% rally.

To contact the reporter on this story: Srinivasan Sivabalan in London at ssivabalan@bloomberg.net

To contact the editors responsible for this story: Alex Nicholson at anicholson6@bloomberg.net, Robert Brand

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