MERRILL Lynch chief investment strategist Charles Clough predicts emerging markets will make a comeback next year.
Mr Clough, who was making economic predictions for the next 12 months, expected a revival for smaller capital stocks, continued deflationary pressure throughout the Western world and downward pressure on money rates and bond yields.
Japan and Mexico should stage recoveries while continental Europe was expected to enter a mid-cycle pause, he said yesterday.
Emerging Asian markets will maintain robust growth but at a slower rate than in recent years.
Chief economist Donald Straszheim predicted world-wide economic growth to stay in a range of 2 per cent to 3 per cent.
In the United States, the current bull run should continue with mid-to-small capitalisation issues regaining leadership over the large capitalisation stocks.