EMERGING MARKETS – Pan-European asset manager F&C Management, formerly Foreign & Colonial and now part of the Eureko group, says emerging markets will grow at twice the rate of their developed counterparts this year and stay strong beyond that.
The group believes that a combination of secular improvements and a cyclical upswing towards the end of the year will combine to produce strong figures for 2001 and further into next year.
Among the supporting factors for the resurgence, says F&C, is strong foreign direct investment allied with the serious structural reforms being undertaken in many emerging markets.
Consequently, economic growth has shifted back to a higher trend as markets move back into ‘catch-up’ mode, the group notes.
Humphrey Carey, director and joint head of emerging markets at F&C, comments: “prior to this year, emerging markets have been unable to stage a dramatic recovery because of cyclical factors. The cycle looks to be turning in emerging markets’ favour – US short rates are falling and while economic growth continues slow across G7 economies, leading indicators of economic activity are likely to bottom out within the next six months. In the past this has always been a strong buy signal for the asset class.”