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"A good opportunity for discriminating investors" |
BAM, which manages more than £2.4 billion-worth ($4.8 billion) of equities in emerging Europe, says that although there is more pain to come in the US, strong macroeconomic and microeconomic fundamentals in central and eastern Europe are supportive of stock valuations in the face of global market bearishness. Tim Scholefield, head of equities at BAM, says: "Investor confidence can be slow to develop and yet quick to evaporate. A rapid loss in market confidence, such as we have seen in recent weeks, can often result in share prices diverging sharply from their fundamental worth. A sudden fall in market confidence can therefore be a good opportunity for discriminating investors." He adds that there are plenty of examples of well-capitalized companies whose revenues are driven by rapid economic growth in the developing world and that there is no legitimate reason why the distressed sub-prime market in the US should drag down the share price of such companies. As examples of this phenomenon, Scholefield cites such companies as Immoest, a Wiener Börse-listed real estate developer with a long track record of successful developments in Romania.