VIEW-Standard Life sees more emerging equity falls

By Peter Apps

LONDON (Reuters) - Having been underweight on emerging equities since October 2007, fund manager Standard Life (SL.L) sees prices becoming appealing again -- but fears further falls and is not yet willing to jump back in.

Standard Life has therefore been less exposed to the unprecedented market falls that have accompanied the global financial crisis this year and knocked almost 60 percent off emerging stock markets.

"It's one of the investment decisions we feel positive about," said Jason Hepner, investment director for global strategy. "Valuations have fallen so far that they begin to look appealing. But it doesn't feel like we have reached the bottom on this yet. I think a lot of the bear market has run its course but we could well go another leg lower and as to whether that will happen before or after Christmas I don't know."

Standard Life currently has 405 million pounds in emerging markets, a tiny proportion of their 123.6 billion pounds under management.

Looking at the main BRIC emerging markets of Brazil, Russia, India and China, Hepner said he was more positive on the latter two. He said both Brazil and Russia were likely to suffer particularly from falling commodity prices whereas India and China would benefit.

He said the firm's Asian position was much larger than its stake in Latin America, and it held nothing at all in Russia.

Falling oil prices, worries over security of investment and a war with Georgia have left Russia as one of the world's worst performing stock markets, down 74 percent this year and with repeated market closures further unnerving investors.

"Prices in Russia have collapsed more than anywhere else and so they do look very cheap but it would be a brave man who went into Russia at the moment," Hepner said.