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Experts still optimistic about emerging markets

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Emerging markets should be supported by the continuation of a number of several ongoing positive trends in 2008, according to Maarten-Jan Bakkum, strategist at asset management ABN Amro.

Despite negative factors, such as the potential downturn in global economic growth, Bakkum’s outlook for emerging markets equities is optimistic, with positive structural trends likely to prevail over the more difficult environment global financial markets are currently experiencing. This will result in further outperformance compared to developed markets equities over 2008, according to Bakkum.

“There are four favourable trends that should benefit emerging markets in 2008,” Bakkum said, with the first being globalisation, which looks set to accelerate. Bakkum’s second supporting trend of emerging markets is liquidity, which, despite a general shortage over the course of 2007, he believes will continue to flow into emerging markets this year.

He also predicted an investment boom in infrastructure and housing, with India, South Africa, Malaysia and the Philippines being the best examples of this infrastructure boom. According to Bakkum, the growth in spending on infrastructure and housing has also led to increased demand for commodities, which in turn is benefiting emerging markets, many of which are major commodity suppliers.


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