September 1, 2014

CIVETS

The term CIVETS is commonly used by HSBC and was most recently utilised with the launch of its CIVETS fund. It refers to the countries of Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa.

A number of analysts believes that CIVETS offer the next ‘big area of growth’ in the emerging markets sector and could follow on from the BRICs. Some of the reasons for positive sentiment surrounding CIVETS are highlighted below:

  • Columbia: The government are fully supporting the economic growth of the country. For example it has assisted in investing in oil revenues for the infrastructure and job creation of the country. Therefore it is becoming a key destination for foreign investment.
  • Indonesia: It features a large pool of educated manpower and the lowest labour unit costs in the Asia-Pacific  region. Indonesia is expected to evolve into as a very valid manufacturing hub.
  • Vietnam: Competitive country in terms of labour cost advantage and wage determination flexibility. Another prospect for a very attractive manufacturing hub in Asia.
  • Egypt: Uncertainty does remain surrounding Egypt because of the recent political unrest. However, this is felt to impact growth for the short term period only. Analysts from HSBC believe that Egypt will resume its growth trajectory and benefit from a large young population as well as a focus on vast amounted of untapped natural gas resources. Similarly it has a number of ports which could emerge as trade hubs, connecting Europe and Africa.
  • Turkey:  Mimics a ‘bridge’ between EU and energy supplies from the likes of Russia and Middle East. Features a dynamic domestic market and benefits from an EU association agreement.
  • South Africa: The country is already the most developed country on its respective content, and is also blessed with plenty of gold and platinum resources.