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BRIC status will rise when crisis ends, says leading manager
By Drazen Jorgic | 06:29:00 | 10 October 2008
In the aftermath of the financial crisis we will see a new economic world order as the BRIC countries enhance their global importance. That is the view of Denmark's Pauli Laursen, Sydinvest’s emerging markets star manager.
Laursen, who manages the ISI BRIC Equities fund for Sydinvest and is currently ranked 1/114 in Citywire’s emerging markets manager rankings for three years, believes the significance of the Brazilian, Russian, Indian and Chinese economies will be enhanced by the financial crisis engulfing the globe. In addition, he expects further de-coupling of economies to take place, if not of stock markets.
He said: ‘Globally, the importance of Bric countries will increase when we get out of this crisis. We will see these four countries mean more than they do today. What China decides to do might be as important as what Washington does.’
‘I also expect some kind of de-coupling in the economies of these four countries and over the long term this will affect the stocks as well.’
As a top-down investor with over 10 years of experience in portfolio management, Laursen adheres to the theory that if you get the sectors and countries right, then specific stock picking takes second place.
However, he also highlights the importance of diversifying his portfolio and currently has approximately 120 different companies. He doesn’t have a particular preference on the size of companies, but he doesn’t have small caps ‘when the market is so volatile.’
Despite the record falls in BRIC stock markets triggered by lack of confidence and investor panic, Laursen believes these countries will continue to grow and are still likely to outperform US and Europe. The panic itself, he says, is an over-reaction in some respects because the situation is unlikely to be as bad as people fear.
He said: ‘We will see a slowdown in BRICs but we don’t think it will be huge.We will still have a relatively sound growth one year from now. Economies in BRIC countries will still have a relatively high growth – not as high as over the last few years but it will still be higher than Europe and the US.’
‘The over reaction is more in the future picture of global economy as people are too worried about what’s going to happen in the next few years and they’re fearing something like 1930’s or the Japanese scenario then that does sound like an over reaction.’
By Drazen Jorgic | 06:29:00 | 10 October 2008
In the aftermath of the financial crisis we will see a new economic world order as the BRIC countries enhance their global importance. That is the view of Denmark's Pauli Laursen, Sydinvest’s emerging markets star manager.
Laursen, who manages the ISI BRIC Equities fund for Sydinvest and is currently ranked 1/114 in Citywire’s emerging markets manager rankings for three years, believes the significance of the Brazilian, Russian, Indian and Chinese economies will be enhanced by the financial crisis engulfing the globe. In addition, he expects further de-coupling of economies to take place, if not of stock markets.
He said: ‘Globally, the importance of Bric countries will increase when we get out of this crisis. We will see these four countries mean more than they do today. What China decides to do might be as important as what Washington does.’
‘I also expect some kind of de-coupling in the economies of these four countries and over the long term this will affect the stocks as well.’
As a top-down investor with over 10 years of experience in portfolio management, Laursen adheres to the theory that if you get the sectors and countries right, then specific stock picking takes second place.
However, he also highlights the importance of diversifying his portfolio and currently has approximately 120 different companies. He doesn’t have a particular preference on the size of companies, but he doesn’t have small caps ‘when the market is so volatile.’
Despite the record falls in BRIC stock markets triggered by lack of confidence and investor panic, Laursen believes these countries will continue to grow and are still likely to outperform US and Europe. The panic itself, he says, is an over-reaction in some respects because the situation is unlikely to be as bad as people fear.
He said: ‘We will see a slowdown in BRICs but we don’t think it will be huge.We will still have a relatively sound growth one year from now. Economies in BRIC countries will still have a relatively high growth – not as high as over the last few years but it will still be higher than Europe and the US.’
‘The over reaction is more in the future picture of global economy as people are too worried about what’s going to happen in the next few years and they’re fearing something like 1930’s or the Japanese scenario then that does sound like an over reaction.’
