05/05/2011 Dejar un comentario
You might think that a mint is a rather pleasant and refreshing sweet, but it is now becoming a new phrase coined to describe a group of countries that are being tipped as the next investment opportunity of the decade. MINTs (Mexico, Indonesia, Nigeria and Turkey) could offer the next big opportunity for investors after the excitement of BRIC (Brazil, Russia, India and China) according to some fund managers. (Published by Investment International.com, UK – 05/05/2011)
Investors in the BRIC group of countries have enjoyed excellent returns over the last ten years. Whilst outright replacements for the BRICs are impossible to find, there are a number of genuine emerging market opportunities a layer down from the BRICs that are not as well appreciated but have similar long term investment potential. Of these emerging countries, Indonesia is the most similar to the BRICs, owing to its very large population of 245 million. In December 2010, the government articulated an economic vision in which Indonesia would grow to become one of the world’s 10 largest economies by 2025. If it succeeds in this objective, investing in Indonesian assets early on could prove to be very rewarding.
‘The long term outlook for countries such as Indonesia and the Philippines is supported by a powerful mix of favourable demographic factors, including quite large populations that are dominated by young people whose disposable incomes are rising,’ said Teera Chanpongsang, manager of Fidelity’s Emerging Asia fund. The Turkish economy has bounced back very strongly since the global downturn, growing by an estimated 8.1% in 2010. The country is now reaping the benefits of the reforms and policies it pursued after its own crisis of 2001. Its banking system survived the global crisis in relatively good condition and the government’s budgetary and public debt position is significantly better than many countries in the Eurozone. An important driver of structural reforms has been Turkey’s EU accession process which has paved the way for comprehensive changes, including the increasing role of the private sector in the Turkish economy, the enhanced efficiency and resiliency of the financial sector and a more solid social security system. ‘In recent years, Turkey has made good progress in terms of implementing reforms and improving its infrastructure whilst retaining its fiscal discipline. Gross Domestic Product per capita has more than doubled in the last decade while the country is set to benefit from favourable demographics, with around a quarter of the country’s 70 million plus population under the age of 15,’ said Nick Price, manager of Fidelity’s Emerging Europe, Middle East and Africa (EMEA).
Africa often remains off the radar for many Western investors as a result of the negative perception of the continent shaped by images of poverty, famine and conflict. The gap between perception and the reality on the ground leads to some very exciting investment opportunities, according to analysts. Nigeria is arguably at the forefront, home to Africa’s largest population and a country richly endowed with natural resources, which is helping to boost investment trade flows and economic growth, Price believes. ‘While more fashionable emerging markets have been getting a lot of attention, the real long term growth stories that investors should be getting excited about are in the frontier markets. Countries such as Nigeria offer good diversification and low correlation to other more established emerging markets,’ he explained. ‘I find some of the most interesting opportunities in the consumer-related sectors. The banks in Nigeria are now highly regulated, well capitalised and set to benefit from the penetration tailwind that exists with one of the lowest levels of retail credit penetration in emerging markets,’ he added.
Both a potential strength and weakness in Mexico is its very high economic exposure to the dominant US economy. Around 80% of Mexico’s exports go to the US, and as well receiving substantial amounts of US investment, Mexico also benefits from the remittances of the large Mexican-origin community that resides in the US. ‘Mexican economic performance tends to be quite well correlated with that of the US, largely due to its dominance as a manufacturing hub for its northerly neighbour. Mexican goods are taking an increasingly larger percentage of imports into the US. We have a fairly positive outlook on the US recovery, so Mexico stands to benefit as a result,’ said Alex Duffy, co-manager of Fidelity’s Latin America fund.