The region is a sure investment in a period when the investors want to avoid the exposure to the decline of the prices of raw material, to the intervention of the Chinese authorities on the market and the uncertainties created by Greece.
BVB is until now the border market with the best evolution at global level this year, said Robertson, the BVB advance since the beginning of the year being 9%.
‘When you don’t like raw materials – investors are cautious towards Russia and South Africa – and you don’t like the situation in Turkey, where do you go? You get to Poland, the Czech Republic, Hungary. They are countries which are not hit by the drop in the quotations of the raw materials, caused by China, on the contrary, they are beneficiaries’ Robertson said.
The worries connected to the rhythm of economic growth in China, of intervention on the market and the volatility of the stock exchange struck the market of raw materials and accelerated their drop, in the context where the quotation of oil is already half against the middle of last year.
The central bank of China shocked on Wednesday the financial markets for the second day in a row, after yuan was depreciated by comparison to the American dollar. These measures came after massive intervention over the last weeks, to stabilise the capital market. Shangai indicator is approximately 25% under the maximum recorded in June.
The countries of Central and Eastern Europe are beneficiaries of the lower prices in oil and raw materials, few of them having commercial connections with China, stated Timothy Ash, analyst for emerging markets at Nomura International.
‘Analysing the emerging markets, places where ‘ you can run to hide’ are probably Emerging Europe – Central Europe, the Baltic countries and the Balkans’ wrote Ash in a note to analysts and investors.
At the same time, the region benefitted from the tight connections with Germany, the biggest economy in Europe, stated Bob Parket, councillor for investments, strategies and research with Credit Suisse.
Countries such as Romania and Bulgaria were affected by the connections of the banking sectors with Greece, but many economies in the region continue to export to Germany significantly.
‘If you accept the idea that massive measures in the euro zone support the German economy and you counsider like me, that in Germany the growth accelerates and goes beyond 2%, then you have to invest in Central Europe which is cheap and gets some of the force from the recovery of Europe’ said Parket.
Greece is still a reason for worrying for those who invest in the region, according to Capital Economics. The most vulnerable for a possible withdrawal of Greece from the euro zone are Serbia and Bulgaria, as well as other countries in the region, among which Romania have significant connections at the level of banking system with Greece. (source: actmedia.eu)