Denmark and Sweden were among a number of European countries highlighted as hotspots for new investment by the Milken Institute.
According Global Opportunity Index 2024: Attracting Foreign Investment, Europe as a whole showed “cohesive investment conditions”. Overall, Denmark led the report’s rankings, followed by Sweden and Finland. The US was placed fourth, followed immediately by the UK, the Netherlands, Germany, Switzerland, Norway and Ireland.
The ‘GOI’ rankings, explained the Milken Institute, were based on five categories: business perception, economic fundamentals, financial services, institutional framework and international standards and policy.
“Focusing on the top five GOI nations, Sweden and Denmark stand out in their Economic Fundamentals, with the latter also leading in Business Perception (along with Finland),” noted the report’s authors. “The largest discrepancies across the five highly performing nations arise in Financial Services.
“The US and the UK are the clear leaders in this category of the GOI, scoring particularly high in the Financial Access subcategory. In contrast, Finland lags behind its peer top-ranked economies in Financial Services, scoring below the overall [Advanced Economy] average in the Financial Size and Condition subcategory of the GOI.”
The attractiveness of these nations, added the report, was underlined by the fact the 20 with the best scores captured 81.2% of investments flowing to advanced economies between 2020 and 2022.
‘Pockets of growth’
Alliance Bernstein has meanwhile released a note seeking to advise investors on finding equity growth within Europe, entitled Finding Pockets of Growth in Europe’s Overlooked Equity Market.
Its authors, CIO Thorsten Winkelmann and portfolio manager Marcus Morris-Eyton wrote: “Europe offers attractive pockets of growth for investors who know how to find them. Several European industries – including industrials, semiconductors and electrical equipment – are forecast to deliver robust earnings growth through 2026, according to consensus estimates. These industries are poised to expand well above the region’s meagre GDP growth forecasts.”
They added: “Quality companies in Europe might lack the star power of the US ‘mega-caps’ – but that means investors can find European companies with impressive growth rates at relatively attractive valuations. In our view, buying durable growth at attractive share valuations adds to the compounding power of these businesses for equity investors with long-time horizons. Select companies in Europe have generated highly competitive returns in a global perspective that transcend the regional market environment.”
