“Among the medium and long-term considerations, the emerging markets and Germany, in particular, are exhibiting an above-average risk-reward ratio,” says Dr.Peter Fischer, member of the board at GAMAX Management AG. “A considerably lower debt than in the industrial nations, among other things, speaks in favour of Asia.”
Currently, the emerging markets are lacking monetary tailwind due to the inflation-related interest increases and minimum reserve increases of the central banks there.
At the same time, the offering of stock is also increasing due to many initial public offerings in Asia, which has the tendency to reduce the indexes. However, this environment can be exploited by investors for the selective purchase of fundamentally solid and attractively valued individual papers, which now have a strong exchange rate again. In particular, high-yielding Chinese consumer papers are of interest, which are being benefitted by the growing domestic demand in the country. This includes, for example, Kingboard Chemicals, which works in the electronics and chemical industry and Texwinca Holding, which works in the textile retail trade.
Germany stands out positively in Europe
Among the European share markets, Germany will stand out positively in the medium-term. “TheGerman industry is competitive and focussed on Asia early on,” explains Fischer. In addition, the improved demand in the field of investment goods is ensuring imagination among the investors. In particular, Fischer has his eye on the construction and investment goods industry together with exporting companies. As examples, he mentions Bilfinger & Berger, Aurubis, Linde and BASF. “In general, we consider value papers, such as Fresenius and Deutsche Telekom, to be interesting,” says Fischer.
No sustainable upturn in the USA
The $600 billion “Quantitative Easing 2 (QE2)” buy-out programme has circulated largely on the US share market and has driven the prices up. However, success on a real economic level in the USA has failed to appear yet. The US economy is still far from a sustainable upturn. “The US central bank will presumably try to stimulate the economy monetarily again, which will drive up prices again. However, such a liquidity-drive boom is not healthy,” points out Fischer.
Shares are the better choice in the long-term
According to Fischer, clear trends are currently difficult to make out on the world stock exchange. On one hand, growing debts and worsening early indicators in the western industrial nations and, particularly, in the USA are providing reasons to buy shares. On the other hand, interest-bearing investments barely seem worth it due to the artificially low interest rates caused by the central banks. For this reason, this alternative would not be wise, especially for investors striving for capital growth. Even government securities are currently providing virtually no return. Many government bonds are riskier than shares. “Good material assets in the form of fundamentally favourable shares are a possibility for long-term investors to navigate through this currently difficult water of the capital markets,” says Fischer.