'Frontier' markets the new emerging markets
Emerging markets represent a key investment destination in circumstances where nine of the top 20 GDP economies are emerging economies, according to the global head of emerging markets at HSBC Global Asset Management, Nick Timberlake.
Timberlake pointed to Goldman Sachs research suggesting that 15 of the top 20 GDP economies would be emerging economies by 2050.
He said the position of the emerging economies had been greatly enhanced by their enviable position with respect to debt when compared to developed economies.
Timberlake told an Australian Institute of Superannuation Trustees conference that these low debt levels then needed to be combined with younger populations and enviable positive consumption growth.
But as positive as Timberlake was on emerging markets, he pointed to even greater possibilities with respect to "frontier" economies such as Libya, which had significant potential for growth.
Both Timberlake and Invesco Hong Kong director Samantha Ho said China had been pivotal in ensuring the success of the emerging economies through the global financial crisis (GFC).
Ho said the Asian economies had recovered more quickly and strongly because they had experienced the Asian financial crisis and consequently had their houses in order.
"The underlying fundamentals were much better in Asia," she said.
Ho said China did not save the world from the GFC but it helped save other Asian economies.
She added trade between the Asian economies helped to insulate them from the difficulties being experienced in the developed economies.
AUTHOR
Mike Taylor
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