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Starbucks’ Chinese expansion is partly to blame for the stock’s recent decline, as investors flee from emerging markets.
Starbucks’ Chinese expansion is partly to blame for the stock’s recent decline, as investors flee from emerging markets.
(Jason Lee/REUTERS)

Multinationals getting whacked by emerging markets exposure

Pity the multinational. Geographic diversification looks good when markets beyond Europe and the United States are rising stars, but the strategy doesn’t look so good when those same markets are struggling.

And right now, emerging markets are Fear No. 1 among investors. Currencies are down sharply, pushing central banks in Turkey, South Africa and India to raise interest rates to levels that threaten their economic growth. The list of countries raising rates is likely to grow.