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Market fatigue sends investors to basics

Wednesday, February 06 11:12:46

For Irish investors in 2013, volatile stock markets, inflation worries and historically low interest rates are posing challenges for both corporate and personal financial decision making, an investment conference in Dublin was told this morning.

However, Irish investors are being advised to plan accordingly and explore the emerging markets of Africa and the opportunities arising from outward foreign direct investment by China in Ireland and Europe.

Speaking this morning at Investec Ireland's 3rd annual investment conference, "Unconventional: Breaking Convention at the Irish Convention Centre", Michael Cullen, CEO, Investec Ireland, said: "Market fatigue is still a major concern for Irish investors as the survival of the Euro and the U.S. fiscal cliff still dominate headlines. We are seeing a return to basic investment strategies for many investors, who are increasingly risk conscious and are looking for stable income returns. The challenge is balancing the desire for return with the potential for risk."

Jonathan Fourie, Specialist Corporate Capital, Investec UK, and recently located to Investec Ireland, said, "Enabling entrepreneurial owners and managers to build their businesses is what Investec is all about. Investec has made significant investments in our platforms in London, Johannesburg and Sydney and we are doing the same here in Dublin. We are enthusiastic about operating in Ireland, we know how to operate in twin speed economies. It was true in South Africa, highly evident in the UK and even in Australia which never went into recession, and yet it's been one of toughest markets to make a difference in. Because of this global exposure to diverse economies and issues, we are confident that this year's conference addresses many of the issues that Irish investors face concerning today's real world investment issues by providing world class expertise from international investment specialists."

This year's conference was opened by Minister Brian Hayes, Minister of State at the Department of Public Expenditure and Reform with special responsibility for Public Service Reform and the Office of Public Works and was attended by more than 400 guests from leading Irish and Irish based companies from the international investment and financial banking community.

Speakers included Antoon de Klerk, Portfolio Manager, Emerging Markets, Investec Asset Management, on "Africa: Economic performance and investment opportunities"; Jacque de Vos, Beijing Representative, Investec Asia, on "China's Outbound Foreign Investment: a Temple of Heaven"; Philip O' Sullivan, Chief Economist, NCB, an Investec Group company, on "Ireland: 'Lucky 13': an Economic perspective." In addition, Nick Train, co-founder of Lindsell Train, UK, on "Protecting Wealth, Client Concerns and Real Returns, an Equity perspective" and Gian Luca Giurlani, Executive Vice President, PIMCO, on "Protecting Wealth, Client Concerns & Real Returns, a Fixed Income perspective" also presented to the invited audience.

Speaking on China, Jacque de Vos, said, "China is set to become an exporter of capital rather than an exporter of goods. Investment opportunities abroad are increasingly critical elements in the survival of their state economy and integration into the global economic system is a matter of pride. For Ireland, there are increasing opportunities to harvest this capital inflow from the Chinese, especially in ICT, renewable energy, bio-pharma and the agri-business. The privatisation of state assets in fiscally troubled countries provides and attractive opportunity for Chinese buyers, with Bord Gais Energy and others proving attractive investment opportunities. China has invested $44 million in Ireland in recent years; a drop in the ocean, considering China's net international investment position reached $1.9 trillion by June 2012. High on the Chinese agenda are reliable quality food suppliers, as well as looking to satisfy their need to acquire high end agri-technology, an area that Ireland performs very well in. Ireland is seen as a smart location to invest in at present and we need to capitalise on this. In addition, Ireland is the only English-speaking member of the Eurozone, and the fair visa regime for Chinese passports is well documented. There have also been a number of high-level bilateral visits recently as well as the establishment of joint Investment Promotion Working Groups between China and Ireland, all of which bode well for Ireland to maximise the investment opportunities with Chinese companies who are investing abroad."