Europe the place to invest
Europe will become the place to invest as it rises from the doldrums and the US economy starts to tail off, according to Scudder Kemper Investments joint head of global equities Nick Bratt.
Europe will become the place to invest as it rises from the doldrums and the US economy starts to tail off, according to Scudder Kemper Investments joint head of global equities Nick Bratt.
Bratt is in Australia to hold discussions with the local Scudder team, which has recently expanded and supplies global resources research and investments for the group, and for parent company Zurich Financial Services.
“Economic forces in Europe have been converging for some time for the introduction of a single currency and economic zone. While there has been problems with the Euro, it is now easier for European business to work and export and harder for external competitors to break in,” Bratt says.
The other factor driving the engine of growth in Europe is the continuance of merger and acquisitions in Europe and the results of rationalising industry.
“This activity in Europe has been higher than the US for the first half of this year and the momentum is still increasing. This is creating price transparency and a greater competitve environment and from an investment point of view is very exciting,” Bratt says.
“While Europe is still at an early stage in rationalising industry compared with the US we see this shake-up having an effect for at least the next five to 15 years. Added to the potential growth which lies ahead for Japan and we are certainly not forecasting a recession.”
Asia is also positioned for enormous growth in the next five years, according to Bratt, with Korea and China restructuring and no longer acting as dampeners in the region. At the same time the traditional centres of Hong Kong, Singapore and Taiwan have strong economies which will offset the drag created by a slow moving Japan .
Bratt says that with the changes of the last decade investors should be more upbeat about the future and the development of the global economy.
“It is worth remembering that we are living in the best possible worlds with the end of the Cold War, no major wars and many of the flash points being resolved,” Bratt says.
“Democracy and capitalism have won the day and the Internet is democratising the world. Hopefully we can expect those countries which are lagging to join the party.”
AUTHOR
Jason Spits
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