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Turkey and Egypt lead the CIVETS pack

The Wall Street Journal has recently reported on the positive economic outlook for the rapidly expanding ‘CIVETS’ nations. The group of emerging nations have effectively replaced the BRIC economies, caught the eye of investors, attracted large funds and experienced significant property investment.

The performance of the CIVETS is already exceeding the BRIC nations as represented on the stock market. Standard and Poor’s CIVETS 60 index established in 2007 is ahead of two other funds, the Standard and Poor’s BRIC 40 and the Standard and Poor’s Emerging BMI over one and three years.

Two major players in the CIVETS grouping are Egypt and Turkey, who have both received considerable attention this year.

Firstly there is Egypt. A country that recently underwent a popular revolution, Egypt’s initial growth prospects have slowed for obvious reasons. However the effects of the regime change have already put the nation in a stronger position than before. While growth has been revised down to just 1% analysts have highlighted Egypt’s now stronger economic footing and expect the country to continue with its previous growth trajectory as early as next year.

Egypt possesses a large, young population as do all the CIVETS, and therefore is expected to benefit from a quickly rising domestic consumption over the next few years. Uniquely, however, Egypt does also occupy key ports with access to the Suez Cannal and possesses a vast, untapped natural gas resource further boosting its credentials.

Turkey on the other hand exhibits more obvious growth indicators such as its geographically central location between Europe, the Middle East and Russia to the North. As a result, Turkey plays host to a major natural gas pipeline network that make it an important energy corridor between Europe and Asia.

That aside, Turkey’s thriving tourism industry is set to see it become one of the world’s most visited countries within the decade while its economy was the fastest growing in the world during the first part of the year; the only country in the world to gain double digit growth outpacing China by over 2%!

Phil Poole of HSBC Global Asset Management explained the growth is because “Turkey is a dynamic economy that has trading links with the European Union but without the constraints of the euro-zone or EU membership,”

Both Egypt and Turkey have experienced significant property investment this year and prices have increased as a result. Domestic demand has naturally pushed up prices as the populations of both countries have become more affluent, however international investors have been quick to indentify opportunity and both nations have also witnessed high levels of foreign investment.

Source: The Wall Street Journal

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