Next Toyota
“Hyundai has clearly set their goal to be the world’s next Toyota, master of the universe, best manufacturing, highest quality, best design and affordability, highest level of productivity,” Stensrud said. “I think they will succeed.”
Emerging economies have benefited from a boom in credit and commodities over the past 15 years, a trend that some say may now have peaked. Morgan Stanley labeled Brazil, India, Indonesia, South Africa and Turkey as the “fragile five” in August because of their reliance on foreign capital.
Societe Generale SA takes a different view, according to its head of global emerging market strategy, Benoit Anne, who said that the “short-lived correction phase will soon be followed by a robust rally.”
Stronger Fundamentals
“Emerging markets fundamentals are actually stronger now than they were in the past, and they are certainly stronger than developed-market countries, especially if you factor in the policy room for maneuver,” he said in an e-mailed reply to questions. “In addition to that, I would argue that valuation and technicals matter just as much as fundamentals at this juncture.”
Stensrud sees emerging economies breaking away from dependency on these cycles as they rely more on service based industries.
“Looking at traditional emerging markets you could be tempted to think that they used to be commodities driven, that they used to be cyclical, but their service sector is growing very fast,” he said. “You could say South Africa is a mining country, but if you look at South Africa’s stock exchange, it’s basically a services index. The service sector is growing fast in all emerging economies.”
Stensrud said they’re also pursuing investments in South Africa and in Chinese Internet companies.
“Two years ahead, we think we are in a huge paradigm shift globally to what you might call a non-material economy,” he said. That means “less and less goods and energy produce services, so we are looking a good deal into global e- commerce.”