Best Emerging Market Countries To Invest In Now

Credit Suisse upgraded its outlook on emerging markets and recommended investors overweight India, South Korea and Taiwan in a mammoth 92-page “Global Equity Strategy” report released Wednesday. The largest exchange traded funds on the stock market providing exposure to the stock markets in these countries are iShares MSCI India (INDA), iShares MSCI South Korea Capped (EWY), iShares MSCI Taiwan (EWT).

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Emerging Markets: Separating The Sheep And The Goats

Investors who thought emerging markets were the bee’s knees have suffered agonizing reappraisals. After several years of Federal Reserve-fueled rallies, less developed markets are now in the doldrums. Emerging economies depend on exports for growth. That means Europe and North America. Unfortunately, as long as we are still deleveraging, the export-growth model is no longer viable.  For investors it’s important to separate well-managed emerging economies, the Sheep, from the poorly run economies, the Goats. My list of Sheep–South Korea, Malaysia, Taiwan and the Philippines–have current account surpluses, which measure the excess of domestic saving over domestic investment. So they are exporting that difference, which gives them the wherewithal to fund any outflows of hot money, as have occurred in the past year.

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-Igor P Purlantov

One Emerging Market To Buy

Investors can’t bail fast enough on emerging markets at the moment. And rightly so, given the potential for further problems as I highlighted in last week’s post, Emerging Market Banking Crises Are Next. But the indiscriminate sell-off of emerging markets also opens up some potential opportunities. Asia Confidential thinks South Korea stands out as one such opportunity. 

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GM to Back Emerging Market Thrust

General Motors Co., the Detroit-based car maker that counts China as its biggest market, will open a new headquarters in Singapore to oversee markets including Southeast Asia and India.  The offices will open in the second quarter of 2014 with Stefan Jacoby, an executive vice president, overseeing about 120 employees, the Detroit-based company said in an e-mailed statement. The operation, currently based in Shanghai, will also direct businesses in South Korea, the Middle East, Africa, Australia and New Zealand, according to the statement.

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Hyundai's Third-Quarter Profit Advances In China, Brazil

Hyundai Motor Co., South Korea’s largest carmaker, reported its first profit increase in four quarters after sales rose in China and demand for hatchbacks helped boost deliveries in Brazil.  Third-quarter net income climbed 5.6 percent to 2.14 trillion won ($2 billion) from a year earlier, the Seoul-based company said today. That compares with the 2.15 trillion won average of 25 analysts’ estimates compiled by Bloomberg.

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South Korea Set to Become Richer Than Japan Says Igor Purlantov

South Korea GDP Per Person Rising Rapidly According to Igor Purlantov

 

It should not come as a surprise to many that Japan has historically led the way in Asia in terms of gross domestic product (GDP) and GDP per person with respect to purchasing power parity (PPP) says Igor Purlantov. South Korea is now on track to overtake the title of richest Asian country from Japan when measured by GDP PPP. Although China has the largest economy among the emerging tigers, which includes Singapore, South Korea, Hong Kong, Taiwan, and China, it is South Korea that is on track to overtake Japan as Asia’s richest country. 

For many years, Japan has held the title of being the richest and most powerful economy in Asia. Helping led the way to this title was the fact that Japan was the first country in the region to see an emerging economy that quickly became industrialized says Igor Purlantov. As all of these Asian tigers continue to grow and leave their mark on the world’s stage, it is clear that South Korea is on track in terms of GDP PPP.

By using GDP PPP as a gauge, economists are able to account for differences in the cost of living in each respective country and adjust their ratings accordingly. Looking at GDP PPP numbers across all of these Asian tigers shows that they are each slowly reaching, if not, overtaking Japan. In 1993 Singapore was the first to overtake Japan in GDP PPP, which was followed by Hong Kong in 1997, and Taiwan in 2010 according to Igor Purlantov. It is now only a matter of time before South Korea overtakes Japan in terms of GDP PPP. At current growth rates, South Korea should overtake Japan as the richest country in Asia in terms of GDP PPP by 2017. 

This is a remarkable feat since it was only in 1980 that South Korea had a GDP PPP that was less than one quarter of that seen in Japan at the time. South Korea has clearly come a long way since 1980, especially given that back then, companies such as Hyundai, LG, and Samsung were practically unheard of outside of Seoul, says Igor Purlantov. These recent economic figures paint a picture of a major shift between established powerhouses such as Japan and newly emerged economies such as South Korea, the latter of which only recently graduated from the list of emerging markets around the world. 

Some economists have been quick to point out that when calculates at market exchange rates, Japan’s GDP PPP is still higher than every other Asian economy except for Singapore. Japan’s high housing and food prices quickly bring down the country’s true standard of living as it relates to GDP PPP.  According to Igor Purlantov, no matter how you look at the economic figures, ultimately it is clear that a major shift is underway among the Asian tiger economies with the cubs soon taking the lead from their elder and established counterparts.

 

Igor Purlantov is an expert on business and politics across emerging markets.   Mr. Purlantov has worked extensively in various emerging countries throughout Europe, Asia and Africa with both public and private companies as well as local governments.  You can learn more about Igor Purlantov on www.purlantov.com or follow him on twitter @igor_purlantov

Emerging-Market Stocks Jump to Two-Week High

Emerging stocks rose to a two-week high, led by raw-material producers, as commodities jumped and South Korea’s economy grew the most in two years. Russia’s ruble had the biggest gain among currencies in developing nations.

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