Emerging market economies are in a much better state than at any time over the past 10 years, according to James Syme, head of emerging markets at SG Asset Management.
As a result – and because they remain attractively valued – Syme says the long term case for emerging markets has been substantially strengthened. Highlighting Brazil and Russia in particular, Syme said emerging markets offered strong growth plays in sectors including oil, steel, technology and petrochemicals.
He was especially encouraged by the move of many emerging countries towards Western-style, domestic consumption-led economies. “There is a pressure to revalue currencies upwards but this is not going to happen yet,” he says. “When it does, we will see an immediate return from currency appreciation. There is already increasing focus on domestic consumption as opposed to exports – this will be long and lasting in countries such as Thailand and Malaysia.”
Syme manages the SG Global Emerging Markets Fund.