Looking further afield

Tuesday, 5th January 2010 21:59 - by Riddler

Happy New Year, fellow Investors. I trust that everyone had a restful winter break? After the difficulties of the Cumbrian floods in early December, coupled with a three week honeymoon to the Far East, I have sadly had to forsake the Blogs until now, but with boredmum we have an excellent fellow Blogger to keep you going. I will seek to continue with a fortnightly contribution. This week I will be looking at investing outside the U.K, while my next offering will be a summary on ‘Green shoots’ in ‘Green’ stocks. Whilst in Vietnam and Hong Kong, I became more aware of the opportunities that lay in wait for brave investors who wanted to venture into U.K-listed foreign stocks. Whilst much of Europe is content with a return to growth in 2010, other areas are still seeing growth in GDP terms for 2009 and beyond. India, Brazil, China, and Vietnam are in the enviable position of expecting 5-7% growth this year, boosted in part by a growing middle class, population growth, urban development and consumer demand for durable and non-durable goods. Vietnam’s population, as I found out during my informative stay, has recovered from c.20 million in 1975, after the ‘American war’ (as they see it), to 80million today. This brings problems for the local and national governments, but also opportunities for those companies involved in water & waste, recycling, energy, infrastructure and consumer goods amongst others. The government is committed, as are many developing nations, to green issues. Therefore, I could clearly see opportunities to research further, for any access U.K investors can have to this growing nation. Tourism is also a booming business in Vietnam, particularly in the beach resorts of Da Nang and Central Vietnam with an influx of Australian and U.S. investment. I have followed the U.K listed Indian companies for 18 months now, and have profited from waste, energy and infrastructure businesses such as TRC, HRCO, GKO, ATPT - as well as entertainment stocks such as EROS which specialise in Bollywood offerings. India is hosting the 2010 Commonwealth Games, and while there are still political considerations, I feel India is still a very strong growth prospect. I will soon be returning to HRCO and GKO amongst others. Many fund managers are still bullish about the BRIC countries of Brazil, Russia, India and China, and are positioning their portfolios accordingly. I would add to this list the next tier of developing countries such as West Africa, Vietnam and Greenland (with its recent commitment to mineral and oil exploration as a way of reducing dependence on Denmark), so stocks such as ANGM offer a lucrative play on this. The FTSE has risen from 3,500 to 5,500 and counting and the GDP for U.K. is slowly being revised upwards, but we must not get too attached to the comfort of U.K. listed stocks, perhaps adding an element of risk to our trades by also playing the success story of the many emerging nations.