Emerging Markets

Emerging markets are the new category or group of countries which are selling their debt and different types of bonds in financial markets worldwide and are always open to implement the reforms that are demanded by investors. This is generally done to increase the inflow of foreign investment in their country as this helps in creating a more favorable environment for the foreign investors thus boosting confidence to invest.

None of the emerging countries can be declared safe from the potential consequences of instability that is mainly characterized by the international flow of financial capital and its effects are on the weakest links in the system.

Countries will have to direct their policies to reduce their vulnerability to financial crises. As one after another most of the emerging markets have starting opting for the unilateral solutions as it not feasible to make changes in the international financial system.

Dozens of countries can be considered as emerging economies, although they are being developing at their own pace and they particularly suffer setbacks in this process. Now, as many emerging markets show signs of having a strong middle class and which is growing in number at a great pace, thus analysts wonder whether the term has lost some of its meaning.

At first the phrase developing countries applied to Asian economies with a rapid rate of growth as well as the countries of Eastern Europe whose economies started expanding after the fall of the Berlin Wall. As interest grew in market economies investors began looking to Latin America in search of emerging markets and finally to countries like Indonesia, Thailand, China, India and Russia.

We understand that emerging markets does not seem a bad option to invest, however it is not easy to go directly to these markets and set up shops, because the information available about Chinese companies listed in Hong Kong or New York is not particularly clear. These conditions suggests that possibly the best option for individual investors is to go through managed funds.

Some of the direct indications that can be deduced about these markets is that the emerging markets of developing countries have high growth but with high risks in the financial and monetary sector. The economic indicators are emerging markets GDP, inflation and foreign direct investment (FDI) describe the analysis. On the current status of emerging markets, being hit by the global crisis facing the macroeconomic effects of the crisis, being one of the signs that unemployment is growing every day in the global context. The forecasts for 2009 are not very encouraging because the global crisis is one of the challenge that the market economies of developing countries have to face.