From booze to bulldozers, analysts scour for emerging market data
By Carolyn Cohn ,ReutersLONDON -- From phone bills in Lagos to bulldozers in Beijing, analysts are looking creatively at ways to measure the strength of emerging market economies where official data sometimes comes up short.
February 2, 2013, 12:05 am TWN
How much Guinness are Nigerians drinking? How full are hotels in the Gulf? What about enrolment in international schools?
All are methods being used to track the ups and downs of economies where timeliness, transparency and accuracy do not always meet develop market standards.
The explosion of interest in emerging markets — Lipper data shows US$90 billion in fund inflows last year — has drawn in many investors who are less familiar with analyzing risky assets and need help.
Quarterly economic growth data, for example, is the most comprehensive and complete set of statistics on any developed economy's economic health.
Yet the availability of even this most-basic economic speedometer is fraught with caveats when it comes to emerging markets.
It is released too late to be of much use in the case of many African countries, or not at all in many Middle Eastern countries. In China, meanwhile, this key release arrives unsettlingly early for some.
So some analysts have started looking at other data or even creating their own datasets to assess how investible such markets are.
“In emerging markets it's more difficult (to get good data) than in developed markets, because it's expensive to run a good statistics office — it does not tend to be a priority,” said Graham Stock, strategist at frontier fund Insparo, adding: “You have to use proxies.”
Proxies that Stock and others look at to judge the strength of the growing consumer class in Africa — cited frequently by investors as one of the huge attractions of the continent — include quarterly consumption data from local breweries such as Guinness Nigeria and Zimbabwe's Delta.
Investment in financial services stocks in Nigeria were boosted by an examination of mobile phone subscriptions.