UPDATE 2-Emerging-market stocks hit record high for first time since 2007

(Adds charts, details)
By Marc Jones and Tom Arnold
LONDON, Jan 8 (Reuters) - Emerging-market stocks hit a
record high for the first time since November 2007 on Friday as
the combination of post-COVID 19 recovery hopes, mass global
stimulus and a weak dollar boosted investor confidence.
MSCI's main emerging-market index .MSCIEF , which covers
nearly 1,400 companies across 27 developing-world countries set
the new record as it topped 1,345 points, a milestone that also
took its surge since March's lows to almost 80%.
Investors have stampeded back into emerging assets in recent
months, with record monthly inflows in November helping offset
the record exodus seen in March as the pandemic shuttered much
of the global economy.
The weak dollar flatters home earnings for emerging-market
companies in dollar terms and make foreign-currency debt
payments easier, said Standard Life Aberdeen investment director
Nick Robinson.
"And there are just a lot of stocks that are benefiting from
this (global) rotation from growth to value," he added,
highlighting mining companies as one sector that has been "on a
real tear lately".
MSCI's EM index has a bigger share of mining, energy and
financials than the all-world equivalent. It is still heavily
weighted towards Asian technology and internet giants however.
Taiwan Semiconductor Manufacturing Company (TSMC) 2330.TW ,
Chinese duo Alibaba 9988.HK and Tencent 0700.HK and Korea's
Samsung 005930.KS account for roughly 20% of the index. Adding
all tech and communications companies plus internet-focused
firms like Alibaba adds up to over 40% of the index.
Developing markets have gained additional momentum this week
after the U.S. Congress formally certified Joe Biden's
presidential election victory. That has given investors hope
that a Democratic-controlled government will lead to heavy
spending, supporting global appetite for riskier assets.
MSCI's index of emerging-market currencies also touched
records earlier this week, while bond spreads have tightened to
near pre-pandemic levels.
There have been some bumps, however. U.S. sanctions against
a raft of Chinese firms will see MSCI MSCI.N and other index
providers cut three Chinese telecom companies - China Mobile
0941.HK , China Telecom 0728.HK and China Unicom Hong Kong
0762.HK - from their benchmarks. The announcements, which means passive funds may have just a
day to adjust billions of dollars of investments, wiped a
combined $5.6 billion off the value of their Hong Kong-traded
shares on Friday and there are worries more companies could also
be it.
Nevertheless, the hope of a recovery from COVID and
normalisation of the world economy has seen MSCI's EM index
overtake the S&P 500 in terms of performance for the last year,
although it still lags well behind the tech heavy Nasdaq.

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MSCI emerging market stocks index sector weightings since 1994
https://tmsnrt.rs/2JVYgZD
MSCI EM vs S&P 50 and Nasdaq https://tmsnrt.rs/2XqbKQq
China's growing dominance of MSCI's emerging market index https://tmsnrt.rs/3otuD0L
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