In continuing with our 2008 investment knowledge series, as requested by some readers, I want to take a look at the top eight ways to play emerging markets in 2008. An emerging market can be defined as a country that are in transition and are becoming more industrialized. These countries are generally not very stable, but are growing very quickly. Because of the nature of these types of markets, both the risk and reward of investing in them is very high.
In this list of eight ways to play emerging markets in 2008, we will look at stocks that trade in the United States. Some of them will trade as ADR's.
The Top 8 Emerging Market Plays in 2008
- Banco Bradesco S.A. (NYSE:BBD) Banco Bradesco is benefiting from a fast growing economy in Brazil. The company is very large, with almost 82,000 employees, but is growing its bottom line quickly. Estimates continue to rise on this stock and the valuation here is still quite reasonable.
- American Movil (NYSE:AMX) AMX provides wireless communication services in Latin America. The company has very little competition in an area that is seeing tremendous growth. This company has already established its leadership position and is extremely profitable.
- Brazil Petroleum Corporation (NYSE:PBR) This combines two areas that I am very high about, energy and Brazil. The oil and gas production in Brazil is growing, and the way to play that is through PBR.
- China Mobile (NYSE:CHL) The growth in China is truly amazing, so there will clearly be some companies that continue to benefit. CHL is likely to be one of them. Mobile communications in China is certainly an area that is growing like wildfires right now, and CHL is the biggest beneficiary.
- Posco (NYSE:PKX) Posco is an integrated steel producer in South Korea. Steel producers have a much improved outlook and much better pricing power than they have had in past years. Posco is also a stock that Warren Buffett likes, which certainly doesn't hurt.
- Cisco Systems (Nasdaq:CSCO) This one comes from a little bit of a different category, but I still believe it belongs on this list. Cisco is a big beneficiary of emerging markets and the enterprising and networking that is taking place there. While there may be temporary slowdowns, I believe this business has real staying power.
- Mobile Telesystems (NYSE:MBT) Given the boom in valuations in emerging market plays, MBT looks like a good value. It is the largest cellular operator in Eastern Europe with over 50 million subscribers and the company has already started showing very positive steps on its bottom line.
- China Life Insurance (NYSE:LFC) As China becomes more prosperous, it is very likely that LFC will benefit. The company is already in a strong position financially, and the stock has sold back down to a fairly reasonable valuation. This is a good way to play China's growth.
Please always remember that emerging markets are very risky, and while things have been going very well for most of these types of markets, they can also fall hard and fast. These eight stocks are ways to play emerging markets if you believe that emerging market stocks will continue to be strong in 2008.
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*Disclaimer* Please do all your stock research yourself, and simply use this list as a tool to help you in your own research.
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