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Cape Town - While emerging markets would continue to offer good investment opportunities, investors would have to be more choosy about where they place their money.
Brazil, Russia, India and China, collectively known as the Bric countries, need to be treated on their own merits and can no longer be lumped together as a basket of growth opportunities.
"I would avoid India for the next six months but would be buying Russia," said Bobby Rakhit, an analyst at international research house FactSet, who felt that India was expensive.
He added he would be cautious on China but would consider using investment in Brazil as a proxy for Chinese investment, as China was now the biggest trading partner of the South American powerhouse.
Other emerging markets which excited Rakhit included the Middle East, specifically Oman and the United Arab Emirates.
Africa received mixed views during a panelist discussion on emerging markets at the African Cup of Investment Management on Thursday.
Glen Baker of Rand Merchant Bank said while opportunities exist, the lack of developed exchanges made it difficult to invest and expensive to invest in the region.
He also said that while India had come in for some stick from Rakhit, the country still managed to save between $300bn and $400bn in retail savings each year.
He added that Africa's track record was "not particularly good" when it came to strong corporate governance, specifically if South Africa was excluded.
Raymond Ndlovu, CEO of Noah Financial Innovation, added that opportunities on listed exchanges were also limited.
"If I was given $100m today, I would have a significant portion of that looking for opportunities in the private equity space aimed at Africa," he said, adding that the unlisted sector would provide more opportunities than the listed one in the next few years.
He identified the telecommunications, construction and property sectors as areas he would consider for investment.
Liston Meintjes, portfolio manager at Abercrombie Investment Management, said there were unfriendly tax regimes between, for instance, South Africa and Egypt or South Africa and Morocco, and this made it difficult for capital to be deployed here.
- Fin24.com