Local investor appetite for equities in EM

Forward dividend yield minus real interest rate

This measure is an indication of the attraction of locally-listed equities for local funds. High inflation, if accompanied by low policy rates (ie negative real interest rates), can push local investors to treat equities as a hedge.

 For foreign funds, FX rate and FX convertibility risks (ie avoiding "trapped capital") matter more.

* denotes trailing dividend yield (aggregate consensus forecast not available)
Chart: Hasnain Malik Source: Bloomberg (29 November 2021), Tellimer Research Get the data