top of page


Emerging market investors are currently having a tough time significantly, as the international cost of living is rising, including higher interest rates and falling liquidity. However, the Director at Aubrey Capital Management, Mark Martyrossian feels now is the time to buy.

Emerging Markets: Time to Buy

“Back in Q4 2008, when Lehman went belly up, and it seemed that the global financial system had been undermined, one of the last scenes of Bladerunner came to mind (for those that don’t remember as far back as 1986 click here). That we were all hanging on for dear life with no obvious escape was mortifying.

From May 2008 to March 2009, it was unremitting red ink. Over the period emerging market indices were down 62%. Perhaps more worrying than the decline in the price of financial assets was the mayhem in the real world with credit being withdrawn, trade slumping and corporate bankruptcies common place. The market was indiscriminate, and babies were thrown out with the bathwater. However, talk back then of valuations being rock bottom for companies that were ungeared, and still doing some good business, was laughed out of court.

When we look back at our emerging market holdings from that time, many of them fell so dramatically that even Rutger Huaer would flinch. Many were 40% down, some shed as much as 75% of their value. However, our process identifies companies with strong fundamentals and low levels of debt which means they are, for the most part, better able to survive global downturns than their over leveraged counterparts. One of our holdings, Baidu Inc (NASDAQ:BIDU), fell by 70% from its May 2008 level. By September 2009, however, it had recovered that level and by June 2010 it had doubled. Titan fell almost 40% from May 2008 but had recovered and then doubled this valuation by July 2010. Similarly, Tencent Holdings ADR (OTCMKTS:TCEHY) fell 45% in the months after May 2008, presenting a great buying opportunity by October and provided considerable growth over the subsequent decade.

We are not simply cherry picking here as over a dozen of the holdings on our watchlist at that time had, on average, doubled within 2 years of Lehman’s collapse and were up 140% within 5 years. Contrastingly, the MSCI EM Index peaked in February 2021 86% above its level in September 2008.

There certainly are differences between the GFC and the current headwinds facing global markets. However, many good companies whose valuations have been dragged down in the mass selloff of emerging markets are now presenting as great an investment opportunity as they did then, with PEG ratios well below 1. Our stringent investment requirements of the three fifteens: a minimum of 15% EPS growth, 15% ROE and 15% CROA mean that the companies we include in our portfolio are, for the most part, intrinsically strong with good fundamentals and are therefore capable of rapid recovery from market shocks.”

About Mark Martyrossian | Director

Mark has been involved in Asian equities since 1987. He was based in Hong Kong for the 1990s where he spent much of his time working in China. He joined Aubrey in 2017 as CEO having known Andrew Dalrymple, one of the founders of the business, for over 20 years. He recently handed on this role as CEO to Andrew Ward in keeping with the firm’s succession plan in order to concentrate on the development of Aubrey’s business. He is a Director and shareholder of Aubrey.


bottom of page