Investing in Emerging Markets E-Book

Julian Marr

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 455

Veröffentlichungsjahr: 2010

Beschreibung

For more than a decade, emerging markets have proved one of the most exciting areas of investment, but the sector has not been without its dangers. Private and professional investors alike have continuously been attracted by the promise of riches on offer from countries such as China, India, Brazil and Russia but, as often as not, have been left with their fingers burnt. Investing in Emerging Markets: The BRIC Economies and Beyond tempers the undoubted causes for emerging market optimism with a healthy dose of reality, illustrating how for every argument in favour of investing in the sector there are one or more reasons to tread very carefully indeed. In the wake of the credit crunch and ensuing market turmoil, it also analyses where the emerging markets now fit within the global investment landscape. With the economies of the US, Europe and Japan hit by an economic crisis very much of their own making, has the credibility gap between developed and developing markets narrowed? Has the playing field become more level? Investing in Emerging Markets: The BRIC Economies and Beyond offers a fresh, clear-eyed and objective look at an area that can only grow in importance over the next decade. It balances a realistic appraisal of the opportunities on offer from the emerging markets with a pragmatic assessment of the potential pitfalls facing investors, in the process providing an accessible introduction to newcomers and more experienced investors with a valuable and compact point of reference.

Leseprobe

Table of Contents

Praise

The Chartered Institute for Securities & Investment

Title Page

Copyright Page

Acknowledgements

Chapter 1 - An Introduction to Emerging Markets

1.1 INTRODUCTION

1.2 WHAT ARE EMERGING MARKETS?

1.3 A BRIEF HISTORY OF EMERGING MARKETS

1.4 A TALE OF TWO DECADES

1.5 DECOUPLING AND GLOBALIZATION

1.6 AFTER THE STORM

1.7 SO FAR, SO GOOD

1.8 INTERACTION BETWEEN EMERGING MARKETS

1.9 THE ETHICAL DIMENSION

1.10 CONCLUSION

Chapter 2 - The Investment Case for Emerging Markets - A Balanced View

2.1 INTRODUCTION

2.2 WHY INVEST IN EMERGING MARKETS?

2.3 CAPTURING THE OPPORTUNITY

2.4 DEMOGRAPHICS AND CONSUMPTION

2.5 INFRASTRUCTURE

2.6 FINANCIAL SERVICES

2.7 VALUATIONS, EARNINGS AND RETURN ON EQUITY

2.8 SOME TECHNICAL CONSIDERATIONS

2.9 RISK

2.10 MATTERS OF TRUST

2.11 CORPORATE GOVERNANCE

2.12 HELL IS OTHER PEOPLE

2.13 BUILDING EMERGING MARKETS INTO A BALANCED PORTFOLIO

2.14 HOW TO INVEST

2.15 BONDS

2.16 DECISIONS, DECISIONS

2.17 CONCLUSION

Chapter 3 - New Schools of Thought - Hype or Reality?

3.1 INTRODUCTION

3.2 ARGUMENT 1: DECOUPLING

3.3 ARGUMENT 2: THE COMMODITIES SUPERCYCLE

3.4 ARGUMENT 3: SOVEREIGN WEALTH FUNDS WILL TAKE OVER THE WORLD

3.5 ARGUMENT 4: THE EAST IS IN THE ASCENDANCY WHILE THE WEST IS IN DECLINE

3.6 ARGUMENT 5: THE SUCCESS OF EMERGING MARKETS IS ASSURED

3.7 ARGUMENT 6: EMERGING MARKETS ARE FAR HIGHER RISK THAN DEVELOPED ECONOMIES

3.8 CONCLUSION

Chapter 4 - The “BRIC” Economies

4.1 INTRODUCTION

4.2 OVERVIEW

4.3 CHINA

4.4 INDIA

4.5 RUSSIA

4.6 BRAZIL

Chapter 5 - The “Emerged” Emerging Markets

5.1 INTRODUCTION

5.2 OVERVIEW

5.3 HONG KONG - A BRIEF ECONOMIC HISTORY

5.4 SINGAPORE - A BRIEF ECONOMIC HISTORY

5.5 SOUTH KOREA - A BRIEF ECONOMIC HISTORY

5.6 TAIWAN

5.7 INVESTING IN THE REGION

5.8 CONCLUSION

Chapter 6 - The Rest of Asia

6.1 INTRODUCTION

6.2 OVERVIEW

6.3 INDONESIA

6.4 MALAYSIA

6.5 THE PHILIPPINES

6.6 THAILAND

6.7 VIETNAM

6.8 INVESTING IN THE REGION

6.9 CONCLUSION

Chapter 7 - The Rest of Emerging Europe

7.1 INTRODUCTION

7.2 OVERVIEW

7.3 A BRIEF HISTORY OF EMERGING EUROPE

7.4 REGION-SPECIFIC RISKS

7.5 THE INVESTMENT CASE FOR POLAND

7.6 THE CZECH REPUBLIC AND HUNGARY

7.7 THE BALTIC STATES

7.8 THE BALKANS

7.9 INVESTING IN THE REGION

7.10 CONCLUSION

Chapter 8 - The Rest of Latin America

8.1 INTRODUCTION

8.2 OVERVIEW

8.3 A BRIEF ECONOMIC HISTORY OF THE REGION

8.4 MEXICO -A BRIEF ECONOMIC HISTORY

8.5 ARGENTINA - A BRIEF ECONOMIC HISTORY

8.6 CHILE - A BRIEF ECONOMIC HISTORY

8.7 PERU AND COLOMBIA

8.8 INVESTING IN THE REGION

8.9 CONCLUSION

Chapter 9 - Emerging Markets - The Final Frontiers

9.1 INTRODUCTION

9.2 OVERVIEW

9.3 THE MIDDLE EAST

9.4 AFRICA

9.5 INVESTING IN FRONTIER MARKETS

9.6 CONCLUSION

Chapter 10 - 2020 Vision - The New Economic Order?

Index

Further praise for Investing in Emerging Markets

“Anyone who has money in emerging markets or is thinking about investing must read this book. Marr and Reynard gain access to some of the industry’s best minds on emerging markets, but don’t just get swept away with the euphoria and excitement - they have produced a measured and perfectly balanced guide. The issues are presented and explained in a clear and entertaining way; the conclusions are simple and unambiguous. They dare to ask whether this time ‘it’s different’ - whether emerging markets will race ahead of Western markets. You will know the answer once you’ve read this book.”

Andrew Oxlade, Editor, thisismoney.co.uk

“A lucid and balanced introduction to one of the key investment themes of our time - the spectacular rise of the emerging economies.”

Daniel Ben-Ami, Editor,Fund Strategy

“The authors orchestrate a full and fair analysis of this century’s hot investment topic, coaxing insights from a ‘Who’s Who’ of emerging markets contacts.”

Rob Burdett, co-founder of Thames River Multi-Capital LLP

“This is an enlightening and well-researched book that explains the history and various grades of developing economies, from the emerged BRIC economic powerhouses to the less well known emerging frontier markets. It examines their increasing importance in the global economic and investment landscape; shows why many reputations were enhanced during the recent financial crisis; and details the myriad ways in which investors can translate superior economic growth rates into superior investment returns - while being mindful of the higher risks attached to this asset class.”

Andrew Pitts, Editor, Money Observer magazine

“We have here a lively and informed analysis of the prospects, challenges and opportunities offered by the seemingly irresistible transfer of economic growth and prosperity from the West to the emerging markets. The reader will be left in little doubt that we live in game-changing times and the evidence presented hints strongly at who might emerge victorious.”

James Budden, Marketing Director, Baillie Gifford

“I believe that the development of emerging markets will be the biggest investment theme over the next decade. This is an insightful guide detailing the key issues for investors to consider.”

Gavin Haynes, Managing Director, Whitechurch Securities Ltd

“Marr and Reynard are experienced financial journalists who have produced a very well balanced view of the opportunities and pitfalls of investing in emerging markets. The book benefits from the insights of investment practitioners who help the authors to move beyond the well discussed emerging market themes, allowing the reader to understand some of the more idiosyncratic dynamics these economies face.”

Marcus Brookes, Head of Multi-Manager, Cazenove CapitalManagement

“For two decades emerging markets have had an exotic allure for investors, but like most things exotic are also fraught with dark dangers. Ignorance is the biggest danger of them all. This book will eliminate that. Before you reach for the cheque book I urge you to read it.”

Stephen McDowell, Editor-in-Chief, Interactive Investor

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This edition first published 2010

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Library of Congress Cataloging-in-Publication Data

Marr, Julian.

Investing in emerging markets : the BRIC economies and beyond / Julian Marr and Cherry Reynard. p. cm.

Includes bibliographical references and index.

ISBN 978-0-470-74825-1

1. Investments, Foreign—Developing countries. 2. Developing countries—Economic conditions—21st century. I. Reynard, Cherry. II. Title.

HG5993.M357 2010

332.67’ 3091724—dc22

2010022094

A catalogue record for this book is available from the British Library.

Typeset in 11/13pt Times by Aptara Inc., New Delhi, India

Acknowledgements

The authors acknowledge the investment professionals for whose guidance, time and help they are hugely grateful, including Jerome Booth, Marcus Brookes, Khiem Do, Peter Eerdmans, Philip Ehrmann, Slim Feriani, Alan Gibbs, Andrew Gillan, Robin Griffiths, Mike Kerley, Peter Kirkman, Michael Konstantinov, Urban Larson, Anup Maheshwari, Jing Ning, Chris Palmer, Stuart Parks, Michael Power, Richard Sennitt, Elena Shaftan, Claire Simmonds, James Syme, Ewan Thompson, Julian Thompson, Richard Titherington, Angus Tulloch, Bob Yerbury and Hugh Young.

The authors would also like to acknowledge the assistance of a number of investment houses in the writing of this book, including Aberdeen Asset Management, Advance Emerging Capital, Allianz Global Investors, Ashmore Investment Management, Baring Asset Management, BlackRock Investment Management, Cazenove Capital Management, Gartmore Fund Managers, F&C Investments, First State Investments, Henderson Global Investors, Invesco Perpetual, Investec Asset Management, JO Hambro Investment Management, J.P. Morgan Asset Management, Jupiter Asset Management, M&G Investments, Neptune Investment Management, RCM, Schroder Investment Management, Standard Bank and Threadneedle Investments.

1

An Introduction to Emerging Markets

1.1 INTRODUCTION

Two first-time authors would have to be very brave - or indeed very foolish - to challenge the wisdom of revered investor and mutual fund pioneer Sir John Templeton. The founder of the company that, incidentally, went on to employ legendary emerging markets investor Mark Mobius, famously said: “The four most expensive words in the English language are ‘This time it’s different’.”

Thus, for example, investors who bought into the technology, media and telecoms boom of the late 1990s just before that particular bubble burst will be painfully aware that, that time, it certainly wasn’t different. They probably won’t be too impressed either with the two words “new paradigm” that were bandied around by technology champions as the argument that trumped all doubters.

But are not evolution and change - the possibility that, this time, it really is different - part and parcel of the whole business of investing in emerging markets? Surely investors buy into the emerging space to tap into the growth that, at least in part, accompanies a country’s journey from nascent or frontier market to fully paid-up member of the global economy.

And if change is indeed an integral part of the emerging markets story, should we not at least consider the possibility - as this book intends to do - that the global financial crisis, which began in earnest when investment bank Lehman Brothers filed for bankruptcy on 15 September 2008 and very much had its roots in the Western financial system, may have closed the credibility gap between the emerging economies and those of the developed world?

That is just one thread - albeit a crucial one - of a book that will also look to identify what emerging markets actually are while weighing up their attractions as an investment. It will take a long hard look at the associated risks, before considering the pros and cons of different regions and individual economies around the globe. Along the way, it will also consider what part emerging markets can play in an investment portfolio and the various routes an investor can use to gain access to them.