Eastern Europe offers cheap stocks and fast growth

Eastern Europe offers cheap stocks and fast growth - at Moneyweek.co.uk - the best of the week's international financial media.

Eastern European markets look unstoppable, says FAZ.net. The Czech and Polish benchmark indices have gained about 35% and 26% respectively this year. And fund manager Odeniyaz Japarov - whose Nestor Osteuropa fund is the second-best German eastern European fund over the past three years with a gain of 126% - believes the region should have little trouble outperforming its Western counterparts over the next two years.

Reforms in the new EU entrants' economies to bring them into line with the EU have underpinned rapid growth, and the convergence process is set to continue, spurring further growth and stockmarket gains. The best bet is Poland, where GDP growth - set to outstrip most of its neighbours' growth this year - is giving profits a "significant lift". The Polish market offers "a broad range" of attractive stocks, including Telekom Polska and Bank Pekao. Andreas Schiller of the Raiffeisen Zentralbank is also a Poland fan, citing the comparatively cheap p/e of 12.5 and the impending privatisation of a state-owned bank as further positive signs.

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