Emerging markets new drivers of global economic growth

Emerging markets are on the rise as the new drivers of global economic growth, showcasing early signs of a rotation away from developed economies. The shift is fueled by a combination of factors such as political risks, low profit margins, undervalued currencies, and attractive valuations. On CNBC Africa, Sinnobisong Trumalo, the co-head of Omix Global Emerging Markets, shed light on this emerging trend, emphasizing the potential of emerging markets in the current global landscape. Trumalo highlighted the resilience of emerging markets in the face of political uncertainties, contrasting them with the heightened risks in developed economies post events like Brexit and the Trump administration. As political risks continue to plague developed markets, emerging markets are increasingly becoming a beacon of stability and growth. The combination of favorable demographics, low valuations, and promising growth prospects positions emerging markets as lucrative investment opportunities for long-term investors. Trumalo pointed out that countries such as China, Brazil, Russia, India, and South Africa are at the forefront of this economic transformation, offering untapped potential for investors. Despite the challenges posed by political instabilities, Trumalo sees them as opportunities rather than deterrents. He cited examples of Brazil and Russia, where political turmoil led to a significant decrease in asset prices, presenting investors with attractive entry points. Trumalo emphasized that while short-term political noise may impact market sentiments, strong businesses in these regions continue to thrive and generate returns for investors. The key, he noted, is to identify resilient companies that can withstand political turbulence and capitalize on growth opportunities. The long-term investment horizon adopted by Trumalo's team enables them to navigate through short-term fluctuations and focus on the underlying fundamentals of emerging markets. By leveraging the current market conditions of low profit margins, undervalued currencies, and depressed earnings, investors can capitalize on the growth potential of emerging markets and diversify their portfolios effectively. Trumalo's insights underscore the importance of looking beyond the political noise and focusing on the intrinsic value of companies operating in emerging markets. As the global economic landscape continues to evolve, emerging markets stand out as the new frontier of growth and opportunity, offering investors a compelling proposition for long-term prosperity and wealth accumulation.