BRIC emerging markets.

Since the beginning of March we see the growing stock markets rally and investors have been again focused on emerging markets. The growth in emerging stock markets have beaten developed markets. Strengthening of more than 50% is much more than in the rest of the world.

China as a market leader, for most investors primary investment in emerging markets, get out of the crisis remarkably quickly. The economy looks like on good track. Eight percent GDP forecasts for GDP growth, billions of dollars in government incentives appear to be fulfilling its purpose, domestic consumption is increasing and even automotive industry is in good shape. On the other hand, investors must still reckon with the long-term risks, which remain unchanged. The political situation, negative demographic trends, the long-term unsustainable growth based on cheap labor, etc., are factors that need to be taken into account.

MSCI Emerging markets Index:

Even in better shape is currently India, which also benefit from a rapid revival of the economy and growing domestic demand, also has good prospects of agriculture. And in India this year expectations are GDP growth of 8%. In contrast to China, the Indian economy is driven by services. Political situation remain risky and imbalances among individual regions. Non-transparency, associated bureaucracy and significant level of corruption are issues that deter many foreign investors.

In recent years Latin American countries have stabilized their economies. Stabilization has been supported by rising commodity prices. The decrease in GDP is not on the schedule and the local banks have not been involved in sub-prime mortgage meltdown. On the other hand, the risks are in close connection with commodity prices. Any long term decline could negatively weighed on Latin American economies.

Countries of Central and Eastern Europe have a problem with declining consumption in Europe, which is the main objective of their exports. Some countries (Hungary, Latvia, Estonia) suffer from large debts in foreign currencies. The Russian economy has also been significantly affected by the crisis and from BRIC countries have the worst outlook. Russia is, like the Latin American countries depend on the evolution of the market of raw materials, which had in previous years a positive effect on the economy. But the inscrutability of these markets is still a risk.