David Riedel, president of Riedel Research Group, which focuses on emerging market stocks, recommends the equity markets in Turkey, China, and Indonesia.
He likes countries with large populations and strong, diverse economies.
“Turkey finds itself between Iraq and a hard place, with Europe on one side and Iraq on the other,” Riedel tells Forbes magazine publisher Steve Forbes in an interview.
“But they’re doing very well in their mercantilist tradition of being a trader and working with corporate groups throughout Europe as an alternative to building in Europe.”
As for China, “there are some very good, well-run companies” there, Riedel says. “We’re not believers in a hard landing for China. We believe they can slow down without having a meltdown, because they have so many financial reserves.”
China also has a strong fiscal position, he notes.
When it comes to Indonesia, “over the last 10 years you’ve seen it come from the brink of disaster during the ASEAN financial crisis at the end of the 1990s to having a very good, well-run stable of corporate families and groups that have done a very good job . . . transitioning to a fully functional economy,” Riedel says.
Meanwhile, Mark Mobius, executive chairman of Templeton Emerging Markets Group, says Europe’s financial crisis won’t hurt emerging markets.
"Emerging markets are growing much faster than developed countries,” he tells Investment Week. “That is not going to be affected. The base is much lower, and the opportunities are much greater."
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