Turn to foreign investment in emerging markets for long-term returns

Emerging market economies are the top destinations for global expansion, according to the latest Grant Thornton International Business Report. But South Africa hasn't been keeping pace with its fellow emerging market economies due to fears that ongoing strike action and rising prices will cause inflation to rise. That's why as an investor, you'll do better investing offshore than you will by investing here at home. Here's how reap long-term returns from the findings…

The latest Grant Thornton International Business Report showed 57% of international business leaders considering global expansion were looking at the five biggest emerging market economies of China, India, Russia, Brazil and Mexico, compared with 38% looking at Western Europe, and 33% at North America, writes Evan Pickworth on Business Day’s BDLive website.

But South Africa’s not keeping pace.

The survey has revealed that South Africa urgently needs to become more attractive for foreign investment if it wants to be a viable contender as a global investment hotspot, adds Moneyweb.

Here’s why top investors turn to other emerging markets

That’s because while South Africa is an investment hotspot, it’s not keeping up with other emerging market economies as an attractive destination for foreign investments, Jeanette Hern, partner and head of corporate finance at Grant Thornton Johannesburg confirms on Business Day’s BDLive website.

And new fears regarding rising prices, labour instability and wage bills will further fuel inflation in South Africa, driving foreign investment elsewhere.

That’s why “it’s imperative to have money invested in offshore markets,” confirms Gavin Fourie, editor of Unconventional Millionaire.

Leading emerging market economies will continue to drive global growth, adds Fourie, as the International Monetary Fund estimates that around 70% of world’s growth will come from emerging market economies in the next two years.

Invest in the BRIC nations to take advantage of these foreign investment findings

The BRIC nations of Brazil, Russia, India and China are a sure bet, and Indonesia will be an emerging market economies superstar, according to Fourie.

But remember that investing in these emerging market economies isn’t a short-term thing. You shouldn’t invest in them for less than three to five years.

These countries are set to soar as investors realise their growth potential. Invest in them today and you’re sure to see great long-term returns.

Tags: emerging market economies, investment hotspot, foreign investment, bric nations