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The BRIC Economies

Hey, I am trying to find out more info on the future (1-3 year) outlook for the BRIC (Brazil, Russia, Inida, and China) economies. For anybody that is into the markets, or just aware of any of the goin-ons of any of these economies, can you please help me find out more info, as Im trying to sift through just a mass of information right now, trying to get a clear picture.

Please spell *India* correctly. Until then, no advice from the guru of inaccurancy.

Brazil, Russia, India and China are tomorrow�s major economies. According to Goldman Sachs, these four countries will be the main sector of growth in the world economy for the next 40 years, increasing by an average 8% year-on-year from 2005-2050. By 2040, the BRIC economies together will have a GDP larger than today�s G8 combined and, by 2050, only the US and Japan will remain in the top six of the world�s economies. The other four will be the BRICs.


As part of this revolution, we see the next billion consumers arising in these countries. From now to 2015, the consumer's spending power in emerging economies will increase from $4 trillion to more than $9 trillion, nearly the current spending power of Western Europe. More market potential will stimulate more competition giving more choice.


To fuel such growth, the BRICs are opening their borders to foreign competition, allowing increased Foreign Direct Investment and increasingly exporting goods and services to Europe and America. As a result, to facilitate the whole of this competitive landscape, the BRICs are transforming their banking services.


This is a one to four day workshop, covering each of these emerging economies, their history and their future. Specifically, the workshops focus upon the banking landscape in each country, how its being deregulated and liberalized, the key players and the new competitors, the technologies being deployed and how they are being used. The outcome is a clear picture of the likely implications of the BRIC community on tomorrow�s banking.

Since you are looking short term, I see a overheating on its way in China, the Russian bubble going burst as soon as oil prices declines (well, they dont really have a lot more right now), India is a safer card but don't excpect any huge China like increases in GDP, and Brazil has its problem with sluggish growth and a president (who will probably get reelected) who don't really have any great reforms in mind...

All those are of course in the very short run... In the long run I'd go for India and China (India before China because I think China's social/democracy reform will be necessary and messy) and maybe Brazil, but not Russia.

My very proffesional view

Metal get off my nuts, it was a typo, but thanks for the info. I actually stumbled upon the very good Goldman Sachs report earlier today when researching, so I have a much clearer picture now. After going through the resaerch I have done so far, I personally would like to put a 7-10 year investment on this new ETF that offers a reflection of only the BRIV economies, but Im part of this investment group at school where they only think relatively short term, so I will probably have to narrow that time frame down to 3-5 years.

Anyways, to respond to your posts... Metal, I read the Goldman report, but thanks anyways.

St. Andrew, I don't know if you are saying Russia doesn't have much oil left (which Im not sure), but oil prices have plummeted as I hope you are aware (as you say you're a professional, or maybe you were being sarcastic) and the Russian Index while it has taken a hit, has not fallen apart completely. I do realize, however, that Russia is the riskiest part of the portfolio here.

I would like to see some actual figures or at least professional research on the overheating of China. I do see your point in that. As for Brazil's political problems, the Goldman Sachs report had that in there too as a potential risk. If you guys have any follow up, or anyone else for that matter, I am still going to be actively researching this. Also, if you want me to post whatever I find here, in case you too are interested I can do that. Thanks

quote:

Originally posted by kush paintings Metal get off my nuts, it was a typo, but thanks for the info. I actually stumbled upon the very good Goldman Sachs report earlier today when researching, so I have a much clearer picture now. After going through the resaerch I have done so far, I personally would like to put a 7-10 year investment on this new ETF that offers a reflection of only the BRIV economies, but Im part of this investment group at school where they only think relatively short term, so I will probably have to narrow that time frame down to 3-5 years.

Thanks anyway? and get off my nuts? Since when has it been plural for you?

Ok, think about this.

China's economy alone will, in 50yrs, be the worlds biggest. They will consume more concrete, oil, coal, natural gas, than the rest of the world combined! I've read and was talking to my older brother, who works for GMS. He told me China's economy alone will be reason enough to raise prices for most natural resources and Russia in turn will benefit. They have a lot of resources that have not yet been explored. But you see the connection right?

But you have to look at society and see what MIGHT happen. Russia's pop at current trend will be HALF of that it is now. Also, India's AID epidemic will be a lot worse if they don't educate. India's continues to have more and more eng and same with China.

More people from IRC are getting college education and they are being heavily invested in b/c of size of ppl or nat resources.
Brazil, without a doubt will continue to grow. They produce most of teh worlds chocalate and us americans and europeans are getting fatter so expect for choc prices to raise.

But really should you expect Brazil not to be a powerhouse? Good argiculture(yes its true) compare to most of Africa.

How does your brother like GMS, I am looking for an internship in the finance field this summer and am trying to compile a list of companies to put in the resume to?

Anyways, you make a solid point about Russia's population woes, however they are having unemployment problems, so perhaps this could be an answer? I don't know Im just guessing. And yes I know a shrinking population is never good.

As for the AIDS problem in India, I think unlike Russia population growth will not be a problem, especially as more development comes to their country and their greatest minds stay within its borders.

I was trying to find the price of crude oil at the open of September and at the close to cross-compare them to the Russian Index, to analyze the possible effects of oil on the counrty, as I do believe it represents about a quarter of their economy. If anybody had those prices of crude I would really appreciate it.

EDIT* I got about 69 and change for the open of crude on the month of September, if this is the same as anybody else knows, I'd appreciate it.

Using the crude prices I found, I see that with about a 9% drop of crude prices, Russia's Index fell 4%. I do realize of course there are other factors that can be at play here.

quote:

Originally posted by kush paintings St. Andrew, I don't know if you are saying Russia doesn't have much oil left (which Im not sure), but oil prices have plummeted as I hope you are aware (as you say you're a professional, or maybe you were being sarcastic) and the Russian Index while it has taken a hit, has not fallen apart completely. I do realize, however, that Russia is the riskiest part of the portfolio here.

I was being sarcastic about being a proffesional, but thanks anyway

What I meant about Russia is that as soon as Gas/Oil depand/prices drop, they will be in serious problem since almost all their growth has been concentrated in the oil/gas buisness, though that is a problem in most oil countries it is very significant in Russia (compared with other more developed countries).

And oil price hasn't really plummeted, if you compare it with a few years back it is still high (that said I don't think it will go down *a lot* more unless China or the US gets into some kind of depression, which I don't think will happen).

quote:

I would like to see some actual figures or at least professional research on the overheating of China. I do see your point in that.

From the economist (without having to read 20 billion articles, I think this sums it up):

"And just as more cracks appear in the engine, the boiler seems to be in danger of burning itself out. Figures released this month show that China�s economy grew by 11.3% compared with the year before in the second quarter. After three years of 10% annual growth, this news is less welcome than one might think. On Wednesday Wen Jibao, China�s prime minister, called for �forceful measures� to stop the economy overheating. Chinese officials�and many analysts�are worried that the boom could be out of control. If not carefully managed, the current frantic pace of investment and expansion could spark inflation and asset bubbles. The hangover could leave industry with unused capacity, banks burdened with bad loans and the government threatened by enormous levels of unemployment.

Unfortunately, the Chinese government has few tools at its disposal to manage the pace of growth. Its attempts to tighten monetary policy have been feeble, hampered by its policy of keeping the yuan artificially cheap. Though the government has tried to �sterilise� its foreign currency operations by issuing more government securities to mop up the resulting excess yuan, its efforts are constrained by the shaky banking system.

China has tried to bolster its weak macroeconomic controls with microeconomic interventions, placing administrative restrictions on investment in specific industries it considers to be growing too fast. China�s economy may now be too big for such policies to do much good but the government is fearful of choking off export-led growth when so many Chinese are desperate for jobs. And the relatively primitive state of China�s financial system makes it hard to fine-tune either micro or macroeconomic policies�particularly since so much investment is driven by political considerations at all levels of government."

quote:

As for Brazil's political problems, the Goldman Sachs report had that in there too as a potential risk.

Not only that, but I think they have huge problems with a bad school systems for example, and that is a much more serious long term problem.

Again I'm not a professional so don't take my word for granted, my best tip for you is to read different economic magazines/newspapers if you want to keep up to date with what's happening to those countries and form your own opninion.

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