Emerging markets are again attractive

21 August 2014

In the last few weeks, Kairos managers met several New York-based operators and had an interesting debate with them on some of the most pressing scenarios for the economic and financial community.

During these exchanges, what emerged in the first place was a markedly more positive view of emerging market trends, particularly owing to a less pronounced slowdown of the Chinese economy: while it failed to meet the government’s target, China’s 6 percent growth rate was enough to allow many other emerging markets to grow.

The present macroeconomic environment, characterized by strong liquidity and moderate but positive growth, could be another beneficial factor for the development of these economies.  Among these, India is currently one of the most interesting stories. In Latin America, Mexico is a significant player, and three other countries are definitely worthy of consideration.  Argentina could undergo a radical change as a result of the capital inflows that the Country badly needs. Venezuela offers very attractive returns on some specific investments, albeit over longer time horizons. Lastly, Brazil once again appears to be potentially the most promising economy in the region, but in this case much will depend on the outcome of next October’s election, i.e. on whether or not President Dilma Rousseff is re-elected.