The feisty up-and-coming TIMP challengers offer the world another way to stay ahead of Wall Street,” contends Martin. Granted, TIMPs still have to earn their stripes in the broader global economy, but these nations are quickly moving into position as the next wave of economic global growth in the coming year. But who exactly are these TIMPs and what are their strengths and weaknesses?
Turkey has been dubbed the ‘Hottoman Empire’ for its recent stretches of economic growth, favourable working-age demographics, and strong tourism and automotive industries. All these are great reasons for investors to stake a claim before the next growth wave.The outlook for Turkey’s economy continues to improve with the central bank cutting its key lending rate by 50 basis points to 5%. Turkey recently bid to join the European Union, a move that Germany is blocking, as the Turkish lira is hovering near an all-time low. While the Turkish markets continue trying to claw back some of their heavy losses, the recent bout of violence and political uncertainty has dulled the appeal of investing in Turkey. There is huge potential in Turkey, nonetheless.
Indonesia and Mexico
In Indonesia, private consumption by a rapidly rising middle class accounts for nearly half of the nation’s growth in gross domestic product (GDP). With a population of 242-million, Indonesia’s economy is likely to grow by 6.7% this year. That’s up from a 6.2% pace last year, making it the fastest-growing economy in Asia behind China.Mexico’s economy weathered the 2008 global crisis better than many and is growing at nearly double the rate of that of the United States. The country has become a manufacturing hotspot. Mexico currently offers the most diverse universe of investment opportunities. Like most world markets, it has recently pulled back, but that may be opening up a great buying opportunity, says Martin.
The Philippines is benefitting from growth in customer-service call centres and in money transfers generated by citizens working abroad. Plus, the country has just received its much-awaited credit upgrade. The Philippines beat Indonesia to win an investment grade from Standard and Poor, a worldwide leader in financial-market intelligence, as President Benigno Aquino has increased state spending while narrowing the budget deficit. With moderating inflation and the government’s declining reliance on foreign-currency debt, the Philippines is in an enviable position … and so are its stocks.The TIMPs are not yet the talk of the town in international circles, concludes Martin, but that is expected to change in the coming months and years – and BRICS should be wary. For South African investors, this may suggest some opportunities for offshore investing in those emerging markets that are likely to take off over the next few years.
BRICS: Time to Move Over
Is it an opportune moment to start suggesting that the Brazil, Russia, India, China and South Africa (BRICS) bloc move over for a new economic grouping of emerging markets that is taking over the field?
Four newly industrialised nations, Turkey, Indonesia, Mexico and the Philippines (TIMP), are quickly becoming world-class powerhouse economies. For decades, says Rudy Martin, President at Acamar Global Investments, investors have focused on the ‘big five’ developing BRICS nations. “These have offered the world a terrific way to capture the magic of growth in new lands that were less popular among mainstream investors,” notes Martin. He maintains that, while BRICS continues to offer opportunity, some member countries are experiencing growing pains on the way up. “Meanwhile, one man’s seeming downfall is another’s rise.
IDEATE | BRICS
by Andrew Ngozo