Emerging markets offer the best growth opportunities despite challenges and volatility: Citibank

Emerging markets continue to offer some of the highest percentages of growth opportunities despite volatility and some challenges, according to Ebru Pakcan, Head of Emerging Markets EMEA region at Citibank.

“In this part of the world, we’ve also seen a lot of resilience as well as a great ability to bounce back, and continue to provide this growth opportunity to many multinationals around the world in various different industries, we’re actually looking at. more untapped markets, in terms of the marketing of goods, services and products, ”she added.

Pakcan’s remarks came during an emerging market outlook panel on the sidelines of Citibank’s media summit, which takes place on Wednesday and Thursday.

Besides Pakcan, the main speakers of the session are: Grant Carson, head of the Turkey, Russia, Ukraine and Kazakhstan cluster, EMEA manager for countries not present, responsible for the EMEA Consumer Banking franchise; Joyce-Ann Wainaina, Head of the Global Subsidiaries Group-Sub-Saharan Africa; and Rizwan Shaikh, Head of Corporate Banking Services for Emerging Markets EMEA.

During his speech, Pakcan noted that the impact of the novel coronavirus (COVID-19) pandemic has been a global phenomenon, no single market in the world is spared from the impact.

“Each of the markets has thought about the stimulus that needs to be injected into the market, a lot of these markets have a lot of liquidity, just like what we see in the United States and Europe, supported by central banks and government attempts to stay afloat, ”she said,“ The reality is, unfortunately, in some of these markets, at least vaccination levels are still lower than what we are seeing in the United States or parts of it. Asia or Europe, which will continue to be a challenge for the markets.

Pakcan continued that looking beyond that, emerging markets continue to offer some of the highest percentages of growth opportunities despite volatility and some challenges.

She also noted that when it comes to COVID-19, many multinationals around the world are rethinking their supply chain strategies. Instead, they focus on resilience and ESG themes, and in doing so, some supply chains are leaving China.

While the markets in South Asia have benefited from the changes in the supply chain, the opportunity for the emerging markets in this part of the world to also benefit and to truly position themselves for these changes in the supply chain must not be not be underestimated.

For his part, Shaikh highlighted the macro aspects impacting emerging markets. From a market point of view, it is the global recovery that we are currently seeing.

“We are seeing what we call a bit of a double boom as commodities are booming,” he added. this is reflected in some of the market activity that we have seen so far.

Shaikh noted that the market should expect Special Purpose Acquisition Companies (SPACs) to make purchases and seek opportunities in emerging markets.

“I think we have already seen a few PSPCs done in Russia, and we expect to see more activities outside the Gulf Cooperation Council (GCC) in this space,” he noted, “We are therefore expect to see more in the coming month and quarters.

Shaikh added that development finance institutions also play a role in emerging markets to facilitate the inflow of private capital for countries or clients who may not have direct access to trade credit. In this context, trade plays a very essential role, in particular in providing support at the height of the crisis last year in terms of mobilizing capital and facilitating trade flows.

In this context, he said that Citibank is partnering with many development finance institutions (DFIs) in emerging markets to facilitate this flow of capital to those who do not have direct access to it.

For his part, Carson said that many governments, especially those that have based their economies on hydrocarbons, have realized that there is an urgent need to diversify the economy and diversify. This awareness has been accelerated by the pandemic of the novel coronavirus (COVID-19).

This is in addition to the recognition that outdated and highly manual policies, processes and systems make countries vulnerable to disruption and sudden shock events similar to the current pandemic.

“What we’re starting to see now is that it’s accelerated thinking about how to diversify your economy, how to digitally transform your economy and your institutions, and how you then align that with ESG initiatives,” Carson said. .

Carson thinks there is a real realization that the diversification of the economy that comes with ESG is a good roadmap for countries to start thinking about how best to recover from the pandemic quickly, and then reap the benefits.

For his part, Wainaina highlighted the events of the past 18 months for multinationals. She said some have had a very good experience throughout the COVID-19 crisis, while others have been challenged.

She said that during this period Africa has focused on areas such as communication and healthcare technology for obvious reasons. The entire continent is about to enter this digital universe.

There is significant demand in the communications landscape, and governments need to ensure they have better developed communications networks, Wainaina said. This included ensuring that there are appropriate technological, energy and electrical capacities.

“The areas in which we have seen rapid growth in the multinational landscape have been particularly in recent months in healthcare and communication,” she said.