CVS Group's analysts believe that since the Fed has postponed tapering, that China and Turkey are now attractive investments for their clients in the short to medium term. They cited increased exports in China and stability in the Middle East as drivers in these emerging markets.
Chuo-ku, Tokyo -- (ReleaseWire) -- 10/14/2013 --The surprising decision from the US Federal Open Market Committee on September 18th to leave their stimulus package unchanged has provided a substantial boost to emerging markets, which were hit hard by fears that the American central bank reduces its asset purchasing program. Postponing tapering provided unexpected relief to emerging markets, as the program has caused huge inflows of cheap cash into developing countries. CVS Group's analysts believe that this has created opportunities for their clients who are looking for short to medium term investments in some important emerging markets. As the US economy recovers, the analysts prefer countries whose economies are export driven rather than fast growing domestic economies.
One of the world's biggest exporters, China is CVS Group's analyst’s top pick. The analysts believe that the recent slowdown in their economy is coming to an end but we should not expect the double digit GDP growth figures that we have seen over the last two decades. As the American and European economies improve, it will boost the export driven economy, where domestic economic data is beginning to show an upswing. Chinese authorities have already stated that they would interfere with stimulus if GDP growth fell below the 7.5% target; CVS Group analysts believe that this greatly reduces risk of investment for their clients. The Shanghai Stock Index has risen over 13% this year.
Turkey's economy was hit hard by the selloff in emerging markets, but as tapering fears reside, the analysts believe that it is becoming an attractive investment again. The US and Russia have reached an agreement and the US will not bomb Turkey's neighbor Syria, which is easing fears of instability in the region. The analysts also noted that Turkey's inflation rate has finally begun dropping, from 8.9% in July to 8.2% in August. The analysts believe that Turkey will have a GDP growth of 4.5% for 2013.