Investment in Emerging Markets Booming

Tuesday, 20 October 2009 13:58

More and more experts are tipping investment in emerging markets are forecast to represent up to 75% of global growth in the near future, proof that now is the time to make investment in property, stocks and equities in these countries.
Emerging markets, particularly the BRIC nations (Brazil, Russia, India and China), are now leaving the recession behind and are expected to lead the rest of the world out of the economic downturn. Speaking in Seoul, Allan Conway, head of emerging market equities at Schroder Investment Management, said that as emerging markets drive world growth, they will represent “70% to 75% of global growth for the foreseeable future.”
According to Bloomberg, the top ten global highest performing benchmark indexes this year are all emerging markets. Indexes in Argentina and Sri Lanka have more than doubled while Brazil's stock exchange has increased in value by 55% so far during 2009.
Conway went on to say that because of increasing domestic demand - Brazil saw a 2.1% quarterly increase in Q2 - and growing trade between developing nations (Brazil and China are ever-bigger trade partners), “emerging market growth looks much better than developed economies.”
According to Conway, the BRIC nations are in an “early stage” of development, which is set to take off. “The importance of BRICs will just get bigger and bigger,” he said, emphasising that this is not a short-term phenomenon but one that is here to stay.
Domestic demand in the BRIC nations is huge and rising. Between them, the four countries have a population of 2.9 billion and purchasing power in the quartet is rising fast, creating huge internal markets. Better credit conditions - for example, Brazil has historically low interest rates and record consumer credit - also adds to consumer demand.