Turkey, Indonesia, Mexico and the Philippines are emerging as
the new global growth leaders, replacing the BRIC countries
Brazil, Russia, India and China, says Bob Turner.
The chairman and chief investment officer of Turner
Investments of Berwyn, Pa., calls them the TIMPs. Here's a look
that track each of those countries on the
, their returns and Turner's investment thesis published in a
research paper this month.
IShares MSCI Turkey (
Year-to-date return: 4% vs. -4% for
MSCI Emerging Markets Index (
One-year return: 32% vs. -2% for EEM.
IBD Relative Strength Rating: 78
IBD Accumulation/Distribution Rating: E
The Turkey ETF led all global markets last year, returning a
whopping 66%. It now sports an IBD Relative Strength Rating of
78, indicating that it has outpaced more than three-quarters of
the market in the past 12 months. However, its
Accumulation/Distribution Rating of E, on an A-to-E scale,
indicates heavy institutional selling. After such a robust rally
last year, it's normal to see
"Turkey should remain hot, due partly to an enviable
demographic profile: More than half of Turkey's population of 75
million is under the age of 30," Turner wrote.
Young people are entering their prime spending as they form
families and households. More young people mean more workers
supporting the country's retired.
"And young people in Turkey are becoming more educated, with
the number of college graduates soaring by 155% between 2000 and
2010, according to Business Insider. Also, Turkey has developed a
robust tourist industry, generating revenue of more than $22
billion annually, and a major automotive industry, the world's
16th largest, producing 1.1 million vehicles last year," Turner
Market Vectors Indonesia Index ETF (
Year-to-date return: 11%
One-year return: 8%
IBD Relative Strength Rating: 61
IBD Accumulation/Distribution Rating: B-
"President Susilo Bambang Yudhoyono increases infrastructure
spending to more than $21 billion in the hopes of meeting his
GDP-growth goal: an average of 6.6% by 2014. Indonesia's trump
card is that its economy is propelled by domestic consumption to
a greater degree than the economies of its Pacific Rim
neighbors," Turner wrote. "Private consumption accounted for
about 47% of Indonesia's 6.2% rate of GDP growth in the fourth
quarter, led by Indonesia's rising middle class of 130 million
"Foreign direct investment in Indonesia reached a new high in
the fourth quarter: $5.9 billion, a 22.9% increase from a year
earlier. For the entire year, foreign direct investment was $22.8
billion, a 26.7% increase from 2011.
"In our opinion, investment should remain strong, given that
the country's credit rating was recently elevated to investment
IShares MSCI Mexico (
Year-to-date return: 5%
One-year return: 19%
IBD Relative Strength Rating: 63
IBD Accumulation/Distribution Rating: B
Mexico could become the world's fifth-largest economy by 2050,
Goldman Sachs forecasts.
"Like Turkey, Mexico enjoys a central trading location, with
the U.S. and Canada to the north and swiftly growing South
America below," Turner wrote. "International trade contributes
60% of Mexico's GDP (gross domestic product). Mexico has also
morphed into something of a manufacturing powerhouse, the world
leader in the production of flat-screen televisions.
"The nation's entire manufacturing market was $300 billion in
2012, and we think it should continue growing at annual rates in
the high single digits or more in this decade."
Enrique Pena Nieto, Mexico's new president, is trying to
reform the country's energy sector.
"Emilio Lozoya, chief executive officer of Pemex, the
state-owned oil company, called Mexico the 'new Middle East' in
light of its long-term prospects as an energy producer," Turner
IShares MSCI Philippines (
Year-to-date return: 18%
One-year return: 43%
IBD Relative Strength Rating: 84
IBD Accumulation/Distribution Rating: E
Two key drivers in the island nation's economy are Filipinos
living abroad and sending money back home, and customer-service
"About 10% of Filipinos working abroad send payments home ($20
billion of payments in 2011, up from $7.5 billion in 2003),"
Turner wrote. "And offshore call centers in the Philippines
generated about $11 billion in revenue in 2011.
"The Filipino government is hoping to raise that $11 billion
number to $25 billion by 2016, in part by taking jobs away from
India. In fact, last year the Philippines captured 70,000
call-center jobs formerly based in India."
Owing to exceptionally high birth rates, the country's
population is projected to jump 51% by 2040 to 142 million. A
little more than 61% of the population would be working. By
contrast, only 53% of Japan's population is expected to work.
Follow Trang Ho on Twitter