EM News: Equity Markets To See More Growth


By Anita Hawser

Emerging market equities look set to enjoy another strong year in 2011 on the back of robust economic growth fueled by domestic consumption and a recovery in exports.

“Emerging equities are expected to remain on a long-term uptrend, as global investors continue to allocate more assets to emerging markets,” says Wilfred Sit, head of emerging markets investment strategy at Mirae Asset Global Investments (Hong Kong). However, the inflow of investors’ capital into these markets will put further strain on currencies and asset price inflation, which could see emerging markets implement capital controls to minimize the impact of appreciating currencies on exports, says Mirae in its 2011 Emerging Markets Outlook.

Mirae, which is one of Asia’s largest independent asset managers, says China will remain one of the fastest-growing emerging market economies in 2011, with GDP predicted to grow in excess of 8%, boosted by strong domestic consumption and government spending on housing, healthcare and education.

It also maintains a favorable outlook for India. Rahul Chadha, head of India investment for Mirae, says a number of factors, including rising incomes and easier access to financing, will help drive consumer-led growth in India. Mirae’s report suggests that “industrials could be the dark horse of 2011,” but that outcome, it stipulates, is dependent on the Indian government’s boosting infrastructure spending and expansion of capacity in the private sector.