Tom: Ayesha, 2017 was a great year for emerging markets, how do you think 2018 will be?
Ayesha: 2017 was a fantastic year for emerging markets; I think 2018 will be a continuation of that in some respects.
The things we look out for when we’re looking at emerging markets performance are pretty much still in play: global growth is still strong, inflation is still low, China is doing all right and interest rates are unlikely to rise very quickly. So all in all, it’s not looking too bad for emerging markets in 2018.
Tom: Clearly you can’t generalise about emerging markets, so which particular area of the world are you finding the best opportunities?
Ayesha: We still think emerging Asia looks pretty good. China could slow a little bit but growth should be very strong. India as well is undertaking a lot of reforms that should prove to be very worthwhile in the medium term, so emerging markets in Asia still look very good.
Other areas could do well especially if commodity prices rise but we still think Asia remains the long term winner.
Tom: It is sometimes said that emerging markets are the factory of the world, so what’s going on in the developed world, and America in particular, is obviously very important. How do you think that will play out in 2018?
Ayesha: I think that’s a very good question. So one country that is very much affected by America is Mexico, which is its neighbour. Now Mexico produces a lot of the components for things such as American cars and as we know the Trump administration isn’t quite so keen on trade as previous administrations, so if any trade restrictions were to happen that would really disrupt the supply of parts for American cars. And it's a good example of how emerging markets and developed markets are becoming much more dependent on each other.