Investing in emerging markets still a good investment – Mminele
Investing in emerging markets like South Africa was still a good investment despite the global financial situation, deputy governor of the South African Reserve Bank Daniel Mminele said on Wednesday.
"Emerging markets appear to be adjusting both cyclically and structurally from spectacular levels of growth observed previously to more sustainable levels.
"This should continue to support a steady investment case," Mminele said in a speech prepared for delivery at the Old Mutual investor and analyst showcase dinner in Cape Town.
He said there were still "challenges and headwinds" in the form of uncertainties around lower growth in key emerging market economies, and continued volatility was likely to be around for some time.
The need to address certain structural problems by emerging economies was beyond question.
The much better fundamental backdrop of emerging markets and continued prospects of higher growth than in advanced economies suggested that it would be a mistake to write off emerging markets.
Historically the case for portfolio diversification into emerging market assets was based on the growth outperformance of emerging market countries.
"Stronger productivity gains called for an appreciation of emerging market currencies, at least in real terms, over the long run," said Mminele.
"Emerging market economic growth is still outpacing that of the developed world, but the gap is narrowing."
In its October 2013 World Economic Outlook, the International Monetary Fund projected that growth in emerging markets would slow from 4.9% in 2012 to 4.5% but increase to 5.1% in 2014.
Developed economies were expected to increase from 1.2% in 2013 to 2% in 2014.
Speaking about South Africa, Mminele said the financial markets faced "significant challenges" since the second quarter of the year and that the rand had extended a depreciating trend and lost about 12% on a trade-weighted basis since March.
"South Africa became increasingly integrated into international financial markets, contributing to the growth and development of its own domestic financial markets and financial infrastructures," he said.
"The policy and institutional framework similarly remain strong. The strides we have made as a country are borne out by favourable rankings in a number of competitiveness reports."
Overall, South Africa is ranked 53 out of 148 in the 2013/14 World Economic Forum Global competitiveness report and ranked in the top 15 worldwide in the 2012 Emerging Markets Opportunity Index.
The country is also first in economic competitiveness in the Africa Competitiveness Report and 39 out of 185 countries in the World Bank's Report on Doing Business.
Comments
The
content
you are trying to access is only available to subscribers.
If you are already a subscriber, you can Login Here.
If you are not a subscriber, you can subscribe now, by selecting one of the below options.
For more information or assistance, please contact us at subscriptions@creamermedia.co.za.
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation