After a stellar 2007, the emerging markets are being fingered as the next emerging bubble.
CLSA’s ever-foresightful Christopher Wood thinks so - with a particular emphasis on Asia, warning his clients to avoid cyclical areas.
But in one area, argues Morgan Stanley’s Jonathan Garner, an early advocate of the decoupling hypothesis, these markets are only just getting started.
Both governments and the private sector are deploying vast amounts of capital to upgrade the emerging world. Over the next decade, the bank predicts $21.7 trillion in infrastructure spending in the emerging markets, as accelerating urbanisation creates demand for basic infrastructure: power, electricity, water as well as transport networks. Morgan Stanley sees 43 per cent of that headed for China, with another 13 per cent destined for India.The opportunities for profitable private sector involvement varies from country to country. China for example is not surprisingly expected to keep public control of any asset investment in areas deemed strategic, or politically sensitive. Elsewhere, such as in airports, China seems more comfortable with the market taking a role....MORE
