Bermudians need have no fear that their supply of electricity will be threatened by developments in the oil industry in South America, according to a top economist with HSBC.

Most of Bermuda?s oil, which becomes its electricity, is bought from Venezuela, which is one of a number of South American countries where politicians are using oil as an economic weapon.

Philip Poole is global head of emerging markets research and chief emerging markets economist at HSBC. He is based in London, but travels extensively for the bank, talking to institutional investors, such pension funds and insurance companies. He had been ?on the road? for a month when he arrived in Bermuda for the third time in ten years this week.

Mr. Poole was on the Island to speak at the first in a series of forums Bank of Bermuda will be putting on to showcase its products and services. This week?s subject was emerging markets, a field in which HSBC?s funds are the market leader. Those invited to the presentation were representatives of corporate clients of the bank, both reinsurance and management companies.

Mr. Poole spoke with on a range of topics. He explained that emerging markets that are of interest to investors are those that promise high yield, or high returns.

?So, today, that means countries such as Brazil, Turkey, Mexico, Argentina, and the Philippines,? he explained. Such economies have been doing well, on a relative basis, because globalisation shifts capital around the world to take advantage of perceived opportunities.

Along with the traditional investors in emerging funds markets, hedge funds have lately been paying attention, driven as they are by a seemingly ever-increasing pool of capital. ?Increasingly, retail investors in Asia, Europe, the USA, and US-based investors, particularly in Latin America, are getting involved,? Mr. Poole said, adding: ?investors right across the board, really.?

Some emerging markets have proved to be risky investments in the past, which is the attraction for some investors, since greater risk suggests the possibility of greater reward.

?Emerging markets are one element of a balance portfolio,? Mr. Poole said.

Twenty-five years ago, when he began his career as an economist, what were the emerging markets then, and have any now ?emerged?? (Such economies were called developing markets back then, a politically unacceptable term today.)

?The world has changed a lot since then,? Mr. Poole said. ?Some of the markets considered emerging now, such as parts of the Soviet Union, and parts of the ComEcon bloc, which at that point were part of the ?Second World?, were well-positioned, but now the Second World has disappeared. It is mostly lumped in with the Third World, which became ?emerging economies?.?

Bermudian companies looking to broaden their portfolios into emerging markets should approach their regular stockbrokers and advisors. Individuals can do the same, or buy units in HSBC funds through the Bank of Bermuda?s investment centre at its head office branch on Front Street. They, too, should consult their advisors first.

Emerging markets are not just accessible through stocks, but also via bonds and currencies. ?One approach has been local currency investment in debt rather than equity,? Mr. Poole said. He cited Mexican government and corporate debt as examples of a way of investing in currencies as well as the debt instrument itself.

?Recent dollar volatility does upset the markets generally, including emerging markets, many of which are dollar-linked in one way or the other, Mr. Poole said. ?The interesting angle on that for us has been to try and pick currencies that are undervalued, depending on the investor base that we?re talking to.?

The conversation worked its way through Brazil, bouts of instability and institutional improvements in emerging markets, contagion from other markets, external financing shocks and risks, fixed and floating exchange rates, Argentina and Mexico?s crises, the Asian crisis in 1997, and Russia?s in 1998.

?On top of that, we?ve seen stronger balance sheets in emerging markets, debt has been repaid and a significant building of reserves has also taken place,? Mr. Poole said.

The tour ended at Venezuela. Should Bermudians be worried about oil market interruptions there? ?No, I don?t think you should be worried,? Mr. Poole replied. ?Venezuelans need to export oil, obviously. They don?t like the dependence on the US, but Bermuda doesn?t fit into that. They are looking to diversify their markets. So, Bermuda shouldn?t worry about that.?

Reassuring news, with which Mr. Poole set off for his presentation.