Sunday, May 17, 2015

Why you have to invest in frontier and emerging markets


Excellent presentation by Grant Williams detailing the opportunity available in frontier and emerging markets in what he calls the monsoon area of the Indian ocean and southeast Asia. This reaffirms my view and investment thesis that investing long term in these areas as they modernize and urbanize is the way to fantastic wealth creation.

The facts are there for anyone to see;

China recreating the Silk Road

The New Silk Road Initiative will, however, not only result in an enormous surge in growth for China. With "One Belt, One Road," President Xi Jinping is launching one of the largest development projects in history and offers new perspectives to countries such as Uzbekistan and Tajikistan threatened by terrorism. Indeed, he inaugurates the initiative with a visit this week to Pakistan, where China will invest $45 billion in energy and infrastructure projects.

Indian economy to grow 8.1% in 2015-2016

"Growth is forecast to accelerate to 8.1 percent in 2015 and 8.2 percent in 2016, benefiting from the acceleration of infrastructure projects, strong consumer spending due to lower inflation and monetary easing and gradual improvements in market sentiments," said the UN ESCAP report titled, 'Economic and Social Survey of Asia and the Pacific 2015.

Even in Africa things are going in the right direction

The Ethiopian economy grew by over 10 percent annually between 2004 and 2009, slowing to nearly 7 percent since 2012, according to the International Monetary Fund.

Some political commentators have called Ethiopia the “African Lion,” a term similar to the “Asian Tiger,” which described Korea during its period of speedy development.

Most people in the West focus on only their home countries but these various frontier and emerging markets have several things in common. Youthful populations, positive changes in policy that spur economic growth, infrastructure investment, and relatively low debt levels. The most difficult thing investors is to find vehicles that we can use to take advantage of this growth. The other main stumbling block for most people is patience. Even if they have the vision most people do not have the patience to let these trends play out and reap the rewards of their foresight.

However patience is exactly what is required and Mr. Williams presentation shows what can happen when one catches the wave of compounding economic growth. 

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