When we talk about emerging markets, we cannot stop talking about India. The Asian country has made a promising start that has piqued the interest of investors. Can India become the new China? John Ewart, investment fund manager at Aubrey Capital, tells us
After 3 years of pandemic, China reopened to the world. The Chinese government last year introduced measures to boost the real estate sector and loosened regulatory controls on tech companies while maintaining ambitious growth targets. Is the country in a strong and stable enough position to achieve a strong recovery?
After 3 years of pandemic, China is strong and stable enough to make a strong recovery. We’ve seen it in big cities where people get back to normal very quickly, and in other smaller cities it’s more sensible. Savings rates increased significantly during the Covid era, and Chinese citizens are looking forward to traveling and visiting bars and restaurants again.
When we talk about emerging markets, we cannot stop talking about India. The Asian country has made a promising start that has piqued the interest of investors. Can India become the new China?
India may become the new China, but the Indian government still has a lot of work to do in terms of infrastructure and opportunities for citizens, housing, education and healthcare. The reforms undertaken by Prime Minister Modi since his election in 2014 are achieving very encouraging results and many companies are now investing in the country, which is very encouraging from an employment perspective, but India wants to see that. The products they consume are also produced locally. In addition, Indian companies are investing in wind and solar technology, which is very beneficial to the economy and reducing carbon emissions.
Another issue that is particularly relevant when talking about emerging markets is the use of ESG criteria. Investing under ESG criteria is steadily growing around the world, but the reality is that European regulatory developments clash with a lack of regulation elsewhere. However, your background Essay 8, What are the keys to differentiating your ESG process?
Key to our ESG process lies in the commitment we establish directly with companies. Since we launched the strategy, 10 years ago, we have been discussing ESG factors and operational or financial issues with companies, and we are getting more information. Companies are increasingly aware of the importance of providing information that they have but simply do not disclose. During our conversations with companies, we get a clear idea of where they see investment opportunities to improve corporate governance, their social practices and environmental factors such as solar energy and recycling initiatives.
Many companies are developing good information that allows them to evaluate their ESG initiatives. In our conversations with them, we highlighted the benefits that the release of this information would bring to us as shareholders and to other stakeholders. Many organizations have adopted international best practices that encourage national organizations that can benchmark their international peers.
Can you give us an example?
We recently had a conversation with a Chinese consumer company that was interested in providing more information on ESG, and they were very interested in our work around the 17 UN Sustainable Development Goals. Our work encourages companies to consider international ventures and provides investors with more useful information.
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