As funds continue to flee emerging markets (EM), valuations in this asset class are becoming dirt cheap with large cap stocks priced as if they're "going out of business," Citi has said in a new report.
The bank says it sees "plenty" of value in the sector, especially in large cap equities which haven't been this cheap since the Asian financial crisis.
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"Large caps in growth emerging markets have de-rated to the extent that their relative valuations are back to levels last seen in 1997; in the case of Asia, the de-rating is down to levels not seen since our data series began in 1995," Citi said in a note on Monday.
Emerging market large cap stocks are also trading at a 25 percent discount to large caps listed on the MSCI Developed Markets Index, with the discount only having been wider during "crisis periods," Citi added.