Emerging markets should remain positive, as long as the US remains in a softlanding and Europe and J...
Emerging markets should remain positive, as long as the US remains in a softlanding and Europe and Japan continue to grow.
Philip Ehrman, head of emerging markets at Gartmore, says: "Global growth will slow to about 3%, there will be plenty of room for the emerging markets in their domestic economies to follow on from strength in their export sectors."
While Jonathan Asante, fund manager at Framlington, says: "Asian exports continue to be strong in electronics with a global demand for technology products from Taiwan and Korea."
Erhman adds: "Korea's structural reform put into place 18 months ago has begun to bear fruit and corporate earnings results have improved, making the country good to invest in."
He believes: "Taiwan and Korea are recovering from the Asian crisis and are considered to be big liquid markets, with big liquid stock with quality economic markets. Investors are looking more to these markets as they are quality providers of electronic components and firms such as Sampson in Taiwan have proven to be very profitable."
Erhman says China has also had a strong amount of growth in the local economy, the government has increased monetary stimulus and the society is becoming more cost-competitive and exports are increasing.
However, Thailand, Philippines, Malaysia and Indonesia are still suffering and have become marginalised. Political problems in Indonesia, Philippines and Malaysia have hampered structural reforms, and banking and debt problems still remain.
Asante adds: "Thailand has suffered from negative equity, but is starting to recover in the areas of consumption, and has offered reasonably cheap media, Telecoms and consumer equities."
For Latin America, growth is strong. The elections in Mexico has seen the first change of power in 71 years, changing the way the economy is run. Mexico is converging ?? to the US market. The country has also recently received a credit rating upgraded by Moody's and banks have begun to lend money to consumers.
Asante says: "Inflation is under control, the new president, Vincent Fox, has reinvigorated the reform process and Mexico is on a strong stabilisation path."
Brazil has met its fiscal targets, devalued its currency, and cut interest rates, despite the rises in the US. Growth is expected in telecoms and cellular equities because of low valuations and the potential of high penetration rates for mobile phones.
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