2014 Stock Market Forecast
“Unlike the past, new investments are being made for advanced nations such as the US and Northern Europe. Shale gas, weakened competition in cheap labor, and changes in innovation will make significant differences in the Korean economy, too.”
Founder and former chairman of Emerging Market Management Antoine van Agtmael attended the “2014 Stock Market Forecast” forum hosted by Daishin Securities at the Seoul Yeoido Conrad Hotel on November 12. He gave a lecture titled “Game Changers in Global Investing - Is the competitive edge shifting again?”
Agtmael, who coined the term “emerging market,” and emphasized investments in them, is now suggesting advanced nations as promising investments.
He claimed, “Unlike the US and Southern and Northern European nations recovering from the long economic recession, China and other emerging markets continue to show slow growth.” Regarding this trend, he said, “It is because the competition moved to advanced nations with game changers such as shale gas, which is a new energy source, weakened competition for cheap labor, with the reduction of cost differences and automation, and changes in innovation called ‘brainfacturing.’”
The fact that advanced nations are ahead in innovations, which is the core of future economic knowledge, is another cause of the shifting paradigm. Agtmael said, “Manufacturing businesses in the US and Europe are expected to come back on track after the economic recession, because they have found new ways of innovation,” and added, “Brainfacturing, which allows combinations of current manufacturing technologies with IT, sensors, and new materials, will become more important.”
He especially pointed out that these changes will have big impacts in the Korean economy. He said, “Globalization hit its peak ten years ago,” and added, “In another ten years, the global shipping trade will decrease, with more new materials being manufactured locally than being imported from foreign countries.” He expected a decline in the raw materials manufacturing, shipbuilding, and shipping businesses.
However, Agtmael mentioned that although the expectations for emerging markets will continue to die out, these markets are still promising for investment. He said, “Emerging markets, such as BRICs, Brazil-Russia-India-China, are in their maturing phases, currently facing internal problems such as energy, government, and infrastructure,” and added, “However, the number of consumers of emerging markets will be double the amount of advanced nations, having the strongest purchasing power in the near future.”