Worries about China heading for a crash appear to have abated, as investors have been pouring money back into emerging markets, in particular in the form of exchange traded funds, in the past few months.Emerging Markets the big story of 2013
Data from Black Rock suggests that a record
amount was invested in exchange traded products (ETPs) towards the end of last
year and inot the early part of 2013. Dodd Kittersley, BlackRock's head of ETP
research, told CNBC last week that "Emerging
markets are really the big story of January."
According
to Jim O'Neill of Goldman Sachs, "China is slowly adjusting to an economy
not so dependent on exports or government investments. That's what they need
and what we all want from them." This is borne out by the almost 35%
increase in the MSCI China 50 share index over the last three months.
Black
Rock’s Kittersley described China as “an unbelievable story”, but not all
analysts are of the same opinion on which emerging markets have the most potential
for growth. Economist Nouriel Roubini warned that the BRICs have been
over-hyped for some time. "India, Russia, and China, all of them are
moving towards state capitalism, and that's actually going to slow potential
growth," he told CNBC.
Investors looking to emerging markets
Principal
Financial's Jim McCaughan also feels that investors should be looking further
afield for emerging markets with growth potential. Growth Green Agriculture agrees with Roubini’s and McCaughan’s advice to be selective
when it comes to investing in emerging markets.
For example, Growth green Agriculture is solely investing in agriculture and farmland in emerging markets such as Ghana. By producing wheat, chia and other crops in a low cost environment and selling them on the world-wide market, they aim at providing investors sustainable returns for distribution as annual dividends.
For example, Growth green Agriculture is solely investing in agriculture and farmland in emerging markets such as Ghana. By producing wheat, chia and other crops in a low cost environment and selling them on the world-wide market, they aim at providing investors sustainable returns for distribution as annual dividends.
According to BlackRock's Kittersley, there is clear
demand from investors to be very specific and tactical with individual
countries, whilst Principal’s McCaughan
suggested that investors should be allocating more money to emerging markets. “Compared
with the opportunities in emerging markets, most investors are pitifully low in
their allocation," the investment strategist said. "And up to 40
percent of your equities in emerging markets is not too outlandish, given the
importance of those economies and given the likely."
This growth should help emerging market stocks
outperform their counterparts, analysts believe. "I think emerging markets
represent an excellent buying opportunity," Carmine Grigoli, chief
investment strategist at Mizuho Securities, told CNBC. "I think they will tend
to outperform other markets going forward."
+Growth Green Agriculture believes it is possible to generate solid
returns, capital wealth and environmental protection at the same time. “We
would argue that sustainable investment is the only investment that has a
future. We accept that the only viable way to attract adequate investment
capital to restore and maintain global health is to ensure that sustainable
investing especially in agricultural investments from emerging markets is more attractive
than the alternatives.”
For more
information on agriculture investments in emerging markets, visit http://ggagriculture.com/
