Inflation threatens emerging investments, expert warns

Mon, 04 Aug 2008

Those with investments in emerging markets would do well to keep an eye on inflation, one expert believes.

According to Chris Palmer, head of global emerging markets at Gartmore, the rising cost of food and energy in such countries could mean that their economies are facing testing times.

He said: "This environment makes it critical for investors to identify the companies that are better-placed within their industries to manage price pressures."

Those with investments should also look to see which nations are best positioned to absorb the rising cost of commodities without having to suffer a deterioration in their balance of payments, Mr Palmer added.

He highlighted Brazil and Russia as two countries which could perform better than their rivals in coming months.

Meanwhile, Julian Cane, manager of the F&C UK Equity Income Fund, believes that the forthcoming interim reporting season will provide vital information for those looking to invest in UK banks.
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