Nestle SA (NESN), General Electric Co (GE:US) and Berkshire Hathaway Inc (A:US) are among firms poised to benefit from a consumer-lead “revival” in emerging markets, said Abbas Zuaiter, co-founder of Zuaiter Capital Holdings and former chief operating officer of George Soros’s family office.
“There is a real vibrant middle class in countries like Brazil, in countries like India, in countries like China --there was real wealth that was created,” Zuaiter, 45, said today at a conference in Doha, Qatar. “The combination should lead a consumer-led, rather than investment-led resurgence.”
Excess capacity has reduced demand for commodities in some emerging markets such as China, Zuaiter said. Credit isn’t as available as it used to be because banks are focused more on their home countries than interbank trade, he said.
Investors should focus on companies that provide consumer goods, health care, agriculture and financial services and avoid commodities and manufacturing, he said.
Nestle, General Electric, Standard Chartered Plc (STAN) and Berkshire Hathaway “all have significant EM exposure,” Zuaiter said. “Owning a developed stock with significant EM exposure is a good way to invest in emerging markets today.”
Zuaiter said he is “very much negative” on the so-called BRICS countries: Brazil, Russia, India, China and South Africa. An exception would be India, he said.
“I think India is an exception to the rule,” he said. “Seventy five percent of Indian GDP is the Indian consumer, and if the Indians can control inflation -- I think they are working very hard at it -- I think you could have a resurgence of the bull market in India.”
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