Currently tempestuous share markets in the Western world could provide further impetus for investing in emerging Central and Eastern European (CEE) markets, according to Sydney-based fund manager QWL.
QWL chief executive Ross Hopkins said CEE markets have been less shaken by the well-publicised sub-prime mortgage crisis than Western markets and are benefiting from a relatively stable currency.
“Market mechanisms have also worked to keep inflation low and led to expanded trade ties with Scandinavia and Western Europe,” he said.
Hopkins said CEE economies, which are benefiting from reforms and strict monetary policies, are expected to grow faster than older European Union states over the next few years.
He said many analysts rank the CEE second only to China for predicted market growth this year.
QWL launched its third Eastern European-focused investment fund last month.
The Euro #III fund invests in a portfolio of listed equities of companies on the stock exchanges of Estonia, Latvia, Lithuania, Russia, Poland, Czech Republic, Croatia and Hungry.
Its Euro #I and II funds have both reported healthy profits for the financial year ended June 30, 2007, delivering returns of 40.5 per cent and 35.4 per cent respectively.
Hopkins said the Russian market is experiencing particularly rapid growth.
“[Major Russian companies are] looking to sign agreements with Western nations to boost two-way trade in both materials and services.”
Hopkins said Russian companies, some of which are gaining an international presence, comprise about 30 per cent of the Euro #III fund.
He said the fund, which aims to deliver consistent returns that exceed a benchmark rate of 12 per cent, grants investors access to a region (namely CEE) well-positioned to achieve strong growth.
