Emerging markets slow but remain strong
The manager of the £40.7m multi-asset CF Miton Global Portfolio has said emerging markets should prove resilient in the face of the commodities downturn and long-term opportunities remain sound.
Sam Liddle said commodity inflation had eased as the banking crisis intensified.
In addition to the oil price more than halving, wheat prices had also halved and rice prices were down a third, he said.
Until recently, he said, the forces that were pushing emerging markets towards a slowdown were due to commodity prices squeezing real incomes, rather than a lack of credit. Following the commodity price drop, he said, purchasing power had returned to the consumer.
Although emerging economies were inevitably slowing, he said, they gave no hint of being bound for a recession. He said the world was still undergoing the largest economic shift it had seen since the industrial revolution, with power moving over from the developed world to countries such as China, India and Brazil.
In particular, he said the markets were underestimating growth prospects in China, including foreign direct investment and fresh trade. Countries such as India, Indonesia and Brazil had huge "catch-up potential", he added.
Regional specialists recently have expressed concerns emerging market investment may dry up in the wake of the liquidity crisis. But the infrastructure and employment boom in Asia was still continuing, the manager said, while middle-class consumers remained relatively debt-free.
He saw longer-term emerging market demand as bullish for commodities such as oil, although he acknowledged in the short term exports to US and Europe had fallen off and would have an impact on growth.