‘U.S., rather than China, is where the ac­tion is’

Weekend Witness - - Money -

CHINA is where all the in­vest­ment ac­tion is, right? Well, not en­tirely, and at least one South African as­set man­ager leans in­creas­ingly to­wards an­other “emerg­ing mar­ket” — the U.S.

Chris Botha, se­nior fund man­ager at Jo­han­nes­burg-based Imara As­set Man­age­ment South Africa, be­lieves that over the next 25 years, the U.S has the po­ten­tial to emerge as a much more vi­brant econ­omy on the back of mas­sive oil and gas dis­cov­er­ies and prod­uct in­no­va­tion by U.S. cor­po­rates.

“Some de­vel­op­ments that will play out over the next two decades are heav­ily in favour of the U.S. For in­stance, its so-called rust belt, once the home of ag­ing heavy in- dus­try, is be­ing re­vi­talised, thanks to new en­ergy sources.

“China may have to set­tle for be­ing the num­ber-two eco­nomic su­per­power for much longer than once thought,” says Botha.

The dis­cov­ery and ex­ploita­tion of sub­stan­tial shale gas de­posits are not the only fac­tors that could lower U.S. en­ergy costs. U.S. in­vest­ment in re­new­ables has been ris­ing and may pay off. “The im- pact of U.S. en­ergy self-suf­fi­ciency will be con­sid­er­able. Petro-dollars will stay in the U.S., con­tribut­ing to a stronger dol­lar,” says Botha.

He thinks a new wave of tech­nol­ogy in­no­va­tion by ma­jor U.S. com­pa­nies will also con­trib­ute to a resur­gence.

“Chi­nese growth will con­tinue, but chal­lenges can be ex­pected as it tries to man­age the tran­si­tion to a con­sumer econ­omy. The longterm im­pli­ca­tions of China’s onebaby pol­icy will also have to be ad­dressed.”

Amer­i­can con­sumer goods com­pa­nies are well-placed to take ad­van­tage of the grow­ing ap­petite for con­sumer brands, he said.

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