Amid the growing tenor and frequency of reports predicting an imminent economic shock due to originate from the emerging world, Julian Mayo, co-chief investment officer at Charlemagne Capital, said in comments made to the Wall Street Journal that such fears may be misplaced ufabet.
“Emerging markets now make up 50 percent of world GDP, but just 13 percent of the global stock-market indexes. While countries like China have been growing for years, they still remain poor by Western standards: per capita income in China is US$6,000—and just US$3,000 in India—against US$40,000 in the U.S., based on purchasing power. This represents a massive investment opportunity as the region catches up,” Mayo said during the interview.
Mayo said—parrying one of the chief criticisms leveled at the growth model of emerging economies such as China employ—that growing intra-regional trade is currently displacing a dependence on a westward-export orientation, and that commodity consumption within each country has more than enough space to grow.
“Countries like China and India are currently at the lower levels of commodity usage, as Japan was before its growth surge in the 1970s. Per capita consumption of copper in China is just four kilograms per person and under 1 kilogram in India, against 10 kilograms in Japan. With similar figures in oil, this growing demand for industrial materials looks like a one-way bet.”
Finally, on the subject of markets in emerging nations becoming too hot, Mayo responded pithily:
“Emerging markets remain relatively cheap on a forward price/earnings ratio of less than 15 times. Considering the asset class traded at 25 times in the late 1980s [in the United States] the opportunity is clear to us.”