AMMA Private Equity looks at Global Emerging Markets
Two of AMMA Private Equity’s introduced investments, TAPP Commerce and Guvera, have made strategic decisions to focus solely on growth in regions known as Emerging Markets.
Emerging markets are defined in simple terms as individual nations and economies where living standards need to improve and access to resources is challenging and limited. These are economies that are considered by the rest of the world to still be developing – and most of which are currently experiencing rapid growth and industrialisation. These are countries that are progressing toward, but have not yet reached, the typically accepted standards of other ‘developed’ nations.
Around 70% of the world’s economic growth over the next few years is likely to come from what are considered to be the top ‘Emerging Markets’ – with China and India accounting for 40% of that growth.
Morgan Stanleys lists the Emerging Markets as currently including Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Qatar, Russia, South Africa, Taiwan, Thailand, Turkey and the United Arab Emirates.
A disturbingly large majority of the population in each of the emerging nations remains either uneducated, or without any means to source an education. This would typically be attributed to their remote locations and lack of access to transportation, or to the internet that may afford them some educational opportunity.
A typical emerging economy may also see a large portion of their inhabitants living in impoverished conditions, which could include unclean or unsafe dwellings, no access to clean running water or adequate medical resources. Populations in these nations are typically too large for the available resources often leading to lower life expectancy than in western cultures.
It’s a vicious cycle where lack of education leads to a lack of employment which leads to lack of money for basic food and resources. The needs are great and understanding the opportunities contained within these markets - and why these opportunities exist - is an important part of considering a big global economic picture.
The level of population alone makes investing in emerging markets a smart move – it places efforts at the heart of where economic growth is required and where it is occurring at a rapid rate. Emerging economies are expected to grow two to three times faster than other developing nations like the US!
Powerhouses like Facebook are currently investing serious funding into emerging markets where user growth is soaring. Currently two-thirds of its 1.7 billion users live outside the developing world and researchers estimate that India alone will surpass the US next year as the country with the most Facebook users. It ranks India, Indonesia, Mexico and the Philippines as the top four countries to see the fastest Facebook user growth until 2020.
Founder of Facebook, Mark Zuckerberg is adamant that ‘the internet belongs to everyone’ and is in the throes of investing heavily to provide the internet to even the remotest parts of the planet through a purpose driven organisation they have formed called internet.org.
A recent article from CNBC highlights five reasons why it’s a good time to invest in emerging markets but in short: emerging markets are a hotpot of opportunity due to a large population who want access to technologies and resources that will make their lives easier and promote rapid growth in their economies.
TAPP Commerce, one of AMMAs introduced investments, is a classic example of a start-up company filling a need and finding success in an emerging market. This digital currency solution for a predominately cash society is currently growing at a rapid pace. The Philippines alone saw staggering growth of 100% between July and August of this year!
Emerging markets have outperformed within the currency market in 2016 where the Brazilian real, Russian ruble, and South African rand have topped the global rankings versus the U.S. dollar.
In a nutshell, emerging markets are showing no signs of slowing in the immediate future, and thus
the prudent investor might want to explore potential niche markets and other opportunities within these developing economies.
AMMA Private Equity is well aware of the opportunities to be found within these markets and several of their investments are leveraged to take advantage of these opportunities.
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