Wednesday, September 8, 2010

FUND VIEW-Beer, tyres and luxury key to emerging markets

LONDON: European companies selling beer, luxury watches and winter tyres are among those best placed to benefit from exposure to fast-growing emerging markets, the manager of a Blackrock fund said on Wednesday, Sept 8.

Russia is seeing a very strong recovery after a sharp recession in 2009, Alister Hibbert, manager of the 400 million pound ($618 million) Blackrock European Dynamic fund said at a press briefing.

He said Finnish winter tyre maker Nokian Renkaat was an example of a company that would be able to benefit from a fast-recovering market for foreign-produced cars.

"Russian banks have been starting to extend credit to showrooms again, and that is leading to new models being brought in, and demand is up strongly," said Hibbert, who highlighted a 40 percent year-on-year growth in demand for sales of foreign branded cars in Russia.

Another company benefiting from the improved economic situation in Russia is Danish brewer Carlsberg, the he said.

In the year to end-August, the fund returned 17.72 percent, which was 28.3 percentage points above its peers, according to data from Lipper, a Thomson Reuters company.

Hibbert said companies with exposure to China also offered interesting opportunities.

"Industrialisation is a one-off opportunity, and Chinese consumption as a percentage of GDP is increasing," he said.

Denmark's Novo Nordisk, the world's biggest maker of insulin, is set to benefit from the creation of a welfare state in the world's most populous country, he said.

The world's largest watch maker Swatch Group, which has "amazing pricing power", also looks set to benefit from a rapidly growing appetite for luxury goods in China and other Asian markets, Hibbert said, adding that the fund was overweight the luxury goods sector.

The fund has a heavy overweight in industrials, and Hibbert said compressor and machinery maker Atlas Copco was an "outstanding" company. - Reuters

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