Why The Emerging Market Countries Matter – Introduction

If you follow the finance world closely, then the term Emerging Markets (EM) is one that you regularly hear. The term was developed a few years ago to refer to countries which were less developed than the Western countries of Europe, United States, and Japan but those that were growing at an accelerated pace. The remaining developing countries were referred to as frontier markets.

Examples of the Emerging Market countries are China, India, Brazil, South Africa, and Russia. These belong to a group known as BRICS. Other EM countries are Malaysia, Indonesia, and Turkey.

The question among many traders is on the reason why the emerging market economies matter and why they should focus on them when trading. Before I explain this, I will have a caveat. EM countries currencies are available at multiple trading platforms including the Ppo8. However, because they are not as liquid as those from the developed countries, new traders should avoid them.

The first reason is the size of the EM economies. The total world economy is worth more than $100 trillion. The total value of the EM economies is almost 35% of the total world economy. The picture was different 30 years ago when there were just 10 countries in the EM category. Today, the number of the EM countries has surged to 24.

Second, the growth of these economies make them ideal for investors. For example, 20 years ago, the Chinese economy was worth $1.9 trillion. Today, the country has a GDP of more than $11 trillion. It has achieved this by having double digit economic growth. On the other hand, the United States has remained largely stagnant. In 2000, it had a GDP of $10 trillion and today, its GDP is more than $18 trillion. This means that the Chinese economy has grown faster than the US, which means that more opportunities have been created in China. During this time, many Chinese have been exited the poverty line.

This means that the EM countries are where companies from the developed countries are getting their growth. In fact, if you read all financial statements from leading companies in the US and Europe, a common theme will be about their focus on China.

Third, the EM countries are some of the biggest producers in the world. Saudi Arabia is the biggest oil exporter, South Africa is the biggest gold and platinum producer, Chile is the biggest producer, while Brazil is the biggest agricultural country. Therefore, when the supplies from these countries is disrupted, the world economy can be halted. For example, last year, workers at a Chilean mine known as Escondida went on strike. This led to the significant gains in the price of copper. This year, the US and China are engaged in a trade conflict. This has led to disruption of trade worldwide because of the significant role the two countries have.

Therefore, regardless of what financial securities you trade, you should always pay a close attention to the emerging markets. You can do this by following local news of those countries. You can also do this by following prominent people from the EM countries on social media. Doing this will help you stay ahead and identify opportunities when they arise.

Why The Emerging Market Countries Matter – UsefulTips

 

 

Ready to make money?

The first step is to sign up

Contact us

If you have a question, we have an answer. If you need something, we'll help you. Contact us anytime.

Chat with an Expert, call +1-800-416-6858, or send an email.

Accepted Payment Methods:  Payments accepted from DTTW™

© 1997-2019 Day Trade The World™ All rights reserved. Day Trade the World™ is a trademark of Select Vantage Inc.

Your privacy is extremely important to us. Check our Privacy Policy. View Sitemap.

Your ability to open a DTTW trading office or join one of our trading offices is subject to the laws and regulations in force in your jurisdiction. Due to current legal and regulatory requirements, United States citizens or residents are kindly asked to leave this website.

Get your free e-Book.

And learn why over 3,200 professional traders choose DTTW.
Welcome Screen

This form collects your name, phone number and email address so that our team can communicate with you and provide assistance. Please check our Privacy Policy or contact us directly for any request about your submitted data.

close-link