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Emerging markets are an integral part of global economic growth in 2010, with energy and mining firms offering the best potential returns for global investors, claims specialist investment firm Martin Currie.
According to the firm’s chief investment officer, James Fairweather, the growth of BRIC (Brazil, Russia, India and China) nations as global consumers and producers will remain significant next year as investors look to longer-term investments.
“With electricity demand in China set to double by 2030, $11 trillion will need to be spent on energy infrastructure over the next two decades, half on transmission equipment,” he said. “The companies best placed to profit from that spending, however, are not necessarily Chinese. For example, China is currently building a high voltage direct current line between the Three Gorges Dam and Shanghai, however, it is not being built by a Chinese company, but instead by Swiss engineer ABB.”
In addition to China, opportunities in Brazil remain. The Brazilian real was the world’s strongest currency in 2009 and with oil revenues likely to continue to drive growth, a viable consumer economy is starting to emerge in the South American country. Fairweather pointed in particular to Brazilian-based mining company Vale, the second largest in the world, as offering significant investment potential.
“We see mounting evidence that 2010 will be a strong year for the bulk commodities that Vale produces, such as iron ore, copper and nickel. The spot price of iron ore in China is already approaching year highs and growth in Chinese steel production is likely to soak up all of Vale’s spare capacity next year,” he said.
Fairweather also cited Danish brewing company Carlsberg, which has a strong foothold in the growing Russian beer market, as one to watch, while India’s quiet economic revolution means it is certainly one to watch. “With a premium growth rate, India offers a broad range of investment opportunities across a variety of sectors,” he said.
