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Investment Opportunities In Eastern Europe

Jul. 17, 2017 11:38 AM ETTUR, TKF, EGFEY, RAIFY, OTPGF, GUR, FRN8 Comments
Elliott R. Morss profile picture
Elliott R. Morss


  • The US stock market is high.
  • Alternatives should be considered.
  • In this article, possible investments in Eastern Europe are considered.



For the last five years, US stock markets have been a good place to invest. Over that period, the S&P 500 is up 77%. And in the last year, it is up 20%. But there are worrying clouds on the horizon: the price/earnings ratios are creeping up - the S&P 500 is now at 24. And nobody knows whether Trump will be able to follow through on any of his promises to spur economic growth. With the US stock markets so high and considerable economic uncertainty over what Trump will do, it is worth considering options.

In this piece, I examine a selection of Eastern European countries (EEU) targeted on the southern part of the region. FocusEconomics provides the data and I am assisted by Ken Lefkowitz, a managing partner at New Europe Corporate Advisory. Ken, an economist, has been living in Bulgaria and covering the region for more than 20 years.

Countries Worth Considering for Investments

Elliott: The countries listed in Table 1 all have stock exchanges. Turkey is by far the largest while Croatia has the highest per capita income by a large margin. Should these countries be investment targets for individual or institutional investors from the West?

Ken: As you point out, size is an important criterion. Therefore Turkey and Romania merit the most attention. They are respectively the second and third largest countries after Poland in terms of population in Eastern Europe excluding the Commonwealth of Independent States (CIS). Turkey is well established as an emerging market, while Romania, long considered a frontier market, is on the cusp of achieving emerging market status - it may be worthwhile to get in early.

Croatia's economy looks much larger than it actually is due to significant remittances. Bulgaria is worth considering due to its macro stability - more on that

This article was written by

Elliott R. Morss profile picture
Elliott Morss has spent most of his career teaching and working as an economic consultant to developing countries on issues of trade, finance, and environmental preservation. Dr. Morss received a B.A. from Williams College in 1960 and a Ph.D. in political economy from The Johns Hopkins University in 1963. He has taught at the University of Michigan, Harvard, Boston University, Brandeis, and most recently at the University of Palermo in Buenos Aires. For several years, he worked in the Fiscal Affairs Department of the International Monetary Fund. He later helped establish Development Alternatives, Inc. (dai.com), a firm that became the largest contractor to the U.S. foreign assistance program (AID). Since his first IMF assignment in Ghana in 1966, he has worked in 45 countries. He has been the President of the Asia-Pacific Group, a British Virgin Islands for profit company with investments in Cambodia, China, and Myanmar. With Dr. Zhu Jia-Ming, he established Green China, an American NGO with the mission to increase the dialogue in China on the trade-offs between economic growth and environmental preservation. Dr. Morss has co-authored six books and published more than 50 articles in professional journals. He is currently available for consulting assignments.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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