European countries such as Russia and Turkey will take a lead role in a global equity recovery into 2008, Hexam says.
Resolution International Hexam Emerging Europe fund manager Stuart Richards says emerging Europe is positioned well to front a market revival, as its banks and financials are mostly unexposed to the US sub-prime crisis.
Although not dependent on buoyant US economic health, Richards says if emerging Europe is to regain losses and surpass all-time highs, global sentiment must improve.
Richards says his fund is fully positioned for a bounce and is looking toward commodities to drive growth.
In Russia, Richards feels infrastructure spending is an increasing factor, with steel demand at the forefront.
Richards predicts the Turkish economy to be one of the world’s fastest growing in 2008; citing falling inflation and interest rates as an indicator.
“The first recovery will come not from the US dollar and US markets but from emerging equity markets, which will be performing well by the end of the year,” Richards says.
“It is important to remember that the current situation is nothing like the 1998 market meltdown which saw currency devaluations and Russia defaulting.
“I expect a strong bounce from emerging Europe and a good year in 2008.”
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