Welcome to Thoughts on the Market. I'm Andrew Sheets, Chief Cross Asset

Strategist for Morgan Stanley. And I'm Daniel Blake, Equity Strategist covering

Asia and Emerging Markets. And on this special edition of the podcast we'll be discussing the 2021

outlook for equity markets across Asia and how investors can view the region

amid a global recovery. It's Tuesday, December 15th at 12 p.m. in London.

And it's 8 p.m. in Hong Kong.

So Daniel, I want to actually start with what were the lessons that you take away from the performance of Asia and EM equities in 2020.

Yeah, it certainly has been a dramatic year for emerging markets in many regards.

There has been substantial hardship and some economies have only just started a recovery

while COVID case numbers are re-accelerating in many countries.

So we're really not through the pandemic just yet.

And at the same time, amidst the deepest recession since World War II,

we actually haven't seen some of the worst fears play out with regards to potential debt or

currency crises for emerging markets.

So much of this we think can be put down to the extraordinary global policy response and

a relatively good starting point in terms of inflation and foreign debt levels for EMs,

which allowed them to benefit from the stimulus unleashed in the US and Europe, while themselves

adopting record low interest rates.

One of the new precedents we see this year has been that in some emerging markets

we've even seen quantitative easing policies being adopted by Central Banks,

where they're buying their own government's debt.

And at this stage investors have been giving them the benefit of the doubt in terms of their willingness and ability to stop unconventional policy when inflation returns.

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