2020 may not have been the best year for the markets. The pandemic resulted in a steep crash - one that will no doubt go down in history. But like always, the markets in many countries did recover well, and now, with various sectors of the global economy bouncing back one after the other, it’s time for investors to set their sights on the emerging markets that are likely to perform well this year. After all, with every investment portfolio looking for a much-needed boost following the pandemic-induced volatility, the time is ripe to study the emerging markets this year and revisit the investment options that are likely to perform well.
Changes in the global socio-economic and political scene have put some countries well ahead on the path to recovery and beyond. Here’s a closer look at some markets to watch out for in 2023.
South Korea
Easily among Asia’s most sought-after markets, South Korea is quickly becoming increasingly popular among investors who have set their sights on global investment options. The nation offers a tech-heavy stock market that global funds are actively chasing during this reflation wave. The Korean markets also seem to be shaping up into another bullish drive this coming year, which is why analysts also appear to be generally positive in their outlook on the Kospi. Korean exports saw a 27% jump towards the end of 2020. The Kospi shot up by around 26% last year. And Korean assets are expected to attract more foreign inflows.
A recent Bloomberg study put Thailand at the top of the list of emerging markets in 2023. The key reason the country found itself in the number one spot is because it boasts of high foreign exchange reserves. And that’s not all. Thailand also has a high potential for portfolio inflows. International investors have also placed a high level of confidence in Thailand as a seat of lucrative investment options. Like Thailand’s Board of Investment (BOI)’s latest survey showed us, 96% of international investors are confident about their Thailand investments and are continuing to park their funds in the country’s assets.
China
The debate on whether China is an emerging or established market may be strong, but there’s no doubt that this is one market that your investment portfolio will benefit from as 2023 progresses. The Chinese economy found its way back to recovery at a rapid pace following the pandemic-induced shutdowns. Interestingly, despite the slowdowns, China’s economy has not suffered too much. The service sector has quickly risen in the ranks and now stands as the biggest segment to watch out for in the Chinese economy. Domestic demand in the country has also ensured that the economic status does not falter despite the lull in global trade.
Brazil
ESG investment options are fast gaining the attention of investors across the globe. JP Morgan notes that Brazil is one of the countries that is most exposed to the ESG wave that is sweeping across international markets. Despite 2020 dealing the Brazilian economy quite a blow, things are expected to bounce back, spurred on by a recovery in commodity prices. That, coupled with a Biden presidency in the United States - which could improve political cooperation - puts Brazil in a nice spot on the global emerging market scene.
India
India is also quickly closing in on the race to emerge as one of the most lucrative investment destinations in the coming years. With the country’s FII inflows remaining strong, the stage is set for a good recovery in 2023 and beyond. In fact, in November 2020 alone, the Indian economic scene saw a record high FII interest of over Rs. 65,000 crore. Experts opine that India and many other emerging markets could also begin to outperform the US, given the right stimulus. If you’re looking to invest in Indian investment options, sectors like banking & financial services, consumption, ESG, pharma & healthcare could be prioritized.
Many Asian countries are poised to make notable recoveries in 2023. You can invest in such emerging global markets and make their assets a part of your investment portfolio with the right mutual funds. Some of Tata Capital Wealth approved funds in this category can make for ideal investment options if you’re looking to invest in up and coming markets this year. Funds like the Edelweiss Emerging Markets Opportunities Equity Offshore Fund, and the Kotak Global Emerging Market Fund. These are some investment options that can help you leverage the emerging areas of the global economy this year.
11 February 2021
4 mins read
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