Next pit stop for nearshoring - Central and Eastern Europe
STOXX 600 up 0.3%
FTSE 100 -0.1%, FTSE 250 +1.2%
Labour wins big majority
Payrolls in focus
S&P futures steady
Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com
NEXT PIT STOP FOR NEARSHORING - CENTRAL AND EASTERN EUROPE
Central and eastern European economies are poised to be top picks for multinational corporations looking to reduce their global footprint and streamline their supply chains closer to home.
Having learned from their mistakes during the pandemic, companies mainly based out of western Europe, but also out of the U.S., are looking to Poland, Czech Republic, Romania and Hungary as options when setting up new operations, analysts say.
Furthermore, the prolonged Ukraine-Russia conflict has inclined the region to look to the west as relatively friendly, and away from China and Russia. The only exception might be Hungary.
"We are beginning to see signs of nearshoring. The proximity to Western markets are very important and clearly eastern Europe does have a very good advantage," said Jakob Ekholdt Christensen, senior EM strategist at BankInvest.
Nearshoring and friendshoring in the recent past stemmed from U.S. companies moving investments to Latin America and the Caribbean from Asia.
But why CEE?
ING analysts believe that in addition to proximity, these four economies have an advantage in terms of cheaper costs of production, improved infrastructure, skilled workforce and government support.
For instance, hourly labour costs in 2023 in the four countries stood lower than the wider European Union average, according to Eurostat as quoted by ING.
However, they still remain higher than Mexico and China.
Still, Padhraic Garvey, regional head of research for the Americas at ING Financial Markets said "gone are the days where it was a no-brainer to locate in China. A combination of the pandemic and the Russian-Ukraine war has just caused many corporates on a global scale to pause for thought when it comes to the location of manufacturing plants."
Sectors that are expected to have been beneficiaries include technology, manufacturing and business process out-sourcing with several MNC's such as Microsoft MSFT.O, Alphabet's GOOGL.O Google and LG Energy Solution 373220.KS expanding their operations or looking to set up new units.
Further, governments across these region have played a vital role in incentivising the presence of large MNC's by offering tax breaks, grants for capital investment and subsidies for R&D activities.
Local equity indexes of Poland .WIG, Czech .PX, Romania .BETI and Hungary .BUX have risen between 11% and 20% year-to-date, compared with MSCI's eastern European equity index's .MIEM00000PUS 6.5% increase.
Currencies in the region have come under pressure as most local central banks have kicked off their policy easing cycles, however a recent Reuters poll showed analysts expect the Polish zloty EURPLN= and Hungarian forint EURHUF= to recoup recent losses over the next six months.
(Johann M Cherian, Siddarth S)
*****
FRIDAY'S OTHER LIVE MARKETS POSTS
NEXT UP: PAYROLLS CLICK HERE
UK LABOUR'S WIN: A BURDEN FOR DIVERSIFIED FINANCIALS AND INSURANCE, A RELIEF FOR UTILITIES CLICK HERE
THE RISE OF THE MODERATES, EYES ON FRANCE CLICK HERE
EUROPEAN STOCKS HIGHER, BRITAIN'S MID-CAPS HIGHEST SINCE APRIL 2022 CLICK HERE
EUROPEAN STOCK FUTURES HIGHER; ELECTIONS, PAYROLLS IN FOCUS CLICK HERE
STARMER'S STEADY START CLICK HERE
The pound has outperformed peers against the dollar in 2024 https://reut.rs/4eDwESq
European shares rise after Labour victory https://reut.rs/3xMBkFi
Selected forecasts for Nonfarm Payrolls https://reut.rs/3Wawpan
Ativos relacionados
Últimas notícias
Isenção de Responsabilidade: As entidades do XM Group proporcionam serviço de apenas-execução e acesso à nossa plataforma online de negociação, permitindo a visualização e/ou uso do conteúdo disponível no website ou através deste, o que não se destina a alterar ou a expandir o supracitado. Tal acesso e uso estão sempre sujeitos a: (i) Termos e Condições; (ii) Avisos de Risco; e (iii) Termos de Responsabilidade. Este, é desta forma, fornecido como informação generalizada. Particularmente, por favor esteja ciente que os conteúdos da nossa plataforma online de negociação não constituem solicitação ou oferta para iniciar qualquer transação nos mercados financeiros. Negociar em qualquer mercado financeiro envolve um nível de risco significativo de perda do capital.
Todo o material publicado na nossa plataforma de negociação online tem apenas objetivos educacionais/informativos e não contém — e não deve ser considerado conter — conselhos e recomendações financeiras, de negociação ou fiscalidade de investimentos, registo de preços de negociação, oferta e solicitação de transação em qualquer instrumento financeiro ou promoção financeira não solicitada direcionadas a si.
Qual conteúdo obtido por uma terceira parte, assim como o conteúdo preparado pela XM, tais como, opiniões, pesquisa, análises, preços, outra informação ou links para websites de terceiras partes contidos neste website são prestados "no estado em que se encontram", como um comentário de mercado generalizado e não constitui conselho de investimento. Na medida em que qualquer conteúdo é construído como pesquisa de investimento, deve considerar e aceitar que este não tem como objetivo e nem foi preparado de acordo com os requisitos legais concebidos para promover a independência da pesquisa de investimento, desta forma, deve ser considerado material de marketing sob as leis e regulações relevantes. Por favor, certifique-se que leu e compreendeu a nossa Notificação sobre Pesquisa de Investimento não-independente e o Aviso de Risco, relativos à informação supracitada, os quais podem ser acedidos aqui.
