Goldman Sachs expects emerging market shares to see modest rebound next year

Investment bank Goldman Sachs said on Tuesday that it expected emerging market shares, currencies and bonds to see a modest rebound next year.

"We expect modest positive returns across the major EM indices next year, albeit with low risk-adjusted returns," analysts at Goldman said in a 2019 outlook report.

They forecast that emerging market equities would see the biggest rise at 12 per cent in dollar terms, while EM currencies should appreciate by around 2 per cent on average due to economic improvements and a modestly weaker U.S. dollar.

On local currency bonds, they added that closely tracked GBI-EM debt index to provide around 10 per cent returns on an "unhedged" basis and including "duration effects".

MSCI's 24-country EM stocks index is down 16 per cent in 2018 so far.