Business Times - 06 Jul 2009
By OH BOON PING
LONG-TERM trends seldom change and, therefore, sustainable structural factors will continue to drive market returns over the longer term, according to fund manager Schroder Investment Management. In particular, the fund house said that the major investment themes that should dominate in the next 10 to 15 years are social demographics, climate change and a capital investment 'super cycle'.
'It helps us to understand what will come into focus a few years later and stay ahead of the market,' said Adam Farstrup from the firm's global equities team.
In terms of social demographics, the global population is forecast to grow from the present six billion to nine billion by 2050 - 86 per cent of whom will live in emerging markets, Mr Farstrup said.
More importantly, China has an ageing population problem due to its one-child policy, while Japan's population could shrink by half in 2100 - meaning the healthcare sector provides interesting opportunities going forward.
In addition, Asian consumers now have the spending power to drive healthcare demand as wealth capital appears to be shifting away from the West to this region.
As for climate change, Schroders sees a concerted effort worldwide to develop fuel-efficient technologies, especially in Asia where economies could be hit hard by changes in weather conditions. Based on estimates, the total cost of climate change may reach some 6.7 per cent of GDP in major South-east Asian countries by the end of this century.
This is set to provide new investment opportunities, and Schroders is positive about the wind power segment, compared with other sources of clean energy, due to its lower cost of power generation. Auto companies and property developers with fuel-efficient technologies should also benefit from the 'green' movement.
Meanwhile, the strong growth seen in newly industrialising countries and the urgent need to replace ageing infrastructure in developed markets will translate into a dramatic increase in capital investments and spending. Coupled with strong population growth and urbanisation, this will benefit players in the utilities, transportation and energy space.
By OH BOON PING
LONG-TERM trends seldom change and, therefore, sustainable structural factors will continue to drive market returns over the longer term, according to fund manager Schroder Investment Management. In particular, the fund house said that the major investment themes that should dominate in the next 10 to 15 years are social demographics, climate change and a capital investment 'super cycle'.
'It helps us to understand what will come into focus a few years later and stay ahead of the market,' said Adam Farstrup from the firm's global equities team.
In terms of social demographics, the global population is forecast to grow from the present six billion to nine billion by 2050 - 86 per cent of whom will live in emerging markets, Mr Farstrup said.
More importantly, China has an ageing population problem due to its one-child policy, while Japan's population could shrink by half in 2100 - meaning the healthcare sector provides interesting opportunities going forward.
In addition, Asian consumers now have the spending power to drive healthcare demand as wealth capital appears to be shifting away from the West to this region.
As for climate change, Schroders sees a concerted effort worldwide to develop fuel-efficient technologies, especially in Asia where economies could be hit hard by changes in weather conditions. Based on estimates, the total cost of climate change may reach some 6.7 per cent of GDP in major South-east Asian countries by the end of this century.
This is set to provide new investment opportunities, and Schroders is positive about the wind power segment, compared with other sources of clean energy, due to its lower cost of power generation. Auto companies and property developers with fuel-efficient technologies should also benefit from the 'green' movement.
Meanwhile, the strong growth seen in newly industrialising countries and the urgent need to replace ageing infrastructure in developed markets will translate into a dramatic increase in capital investments and spending. Coupled with strong population growth and urbanisation, this will benefit players in the utilities, transportation and energy space.
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