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INTRODUCTION TO EMERGING MARKETS

Agenda
BRIC BRIC Growth since 2001 Brazil India

China

BRIC
Brazil

Russia
India

China

BRIC
“Certainly, Mexico, the four BRIC countries and
Korea should not be really thought of as emerging markets in the classical sense, as …we regard these countries as a critical part of the modern globalised economy…”

BRIC .

BRIC Growth Since 2001 Brazil Russia 369% 630% India China 499% 201% using the A-share market .

Brazil • World’s fifth largest country • President Dilma Rousseff • Lagging behind growth estimations .

[it] will have to focus on fiscal policy. trade policy.” . education and modernizing institutions.Growth “In order for Brazil to raise its growth rates and converge towards its peers in the BRICs.

Brazil’s Underperformance 1. Introduce structural reforms . Lower trade barriers 3. Improve savings and investments 2. Improve quality of education 4.

Importance of Trade 2. Lower trade barriers Brazil’s trade share = 25% of GDP Russian’s trade share: 41% of GDP China’s trade share: almost two-thirds of GDP .

India • World’s second largest population • President Pratibha Devisingh Patil .

Lowering trade barriers 2.Land factor .Change in India 6 Major Factors 1.Urbanization 6.Rise of financial sector 3.Golden Quadrilateral Highway 5.Rise of IT sector 4.

Golden Quadrilateral .4.

Mumbai (W) Almost completed… . Chennai (S).4. Golden Quadrilateral 3.625 miles Four/Six lanes Connects four largest cities: Delhi (N). Kolkata (E).

Urbanization in India 10 of 30 fastest growing cities worldwide .

Segments in India .

Segments in India .

Consumption in India .

“Share-of-Wallet” .

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Income Pyramid .

Consumption Categories .

• Offer high-value at accessible (low) price.New Challenges • Attract. • Retain brand loyalty with rising tastes. . educate new consumers.

China • World’s largest population over 1.3 billion • Governed by CPC (Communist Party) .

China’s Growth “China’s unrivalled economic growth over the past quarter-century has surpassed all records and created a new standard in the history of economic development.” Annual real GDP growth rate Average of 9.0% .6% from 1978 to 2004 Reference point: Brazil’s unattained forecast was 5.

China’s Aging Will China grow old before getting rich? .

China’s Aging .

China’s One-Child Policy 1978 .

Implications • Economy should continue to grow. • Aging benefits specific factors • (Insurance. biotech…). . • Renewed opportunities for China’s neighbors. pharmaceuticals.

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Forecast .

Some Numbers .

3. 5. 2. 6. 4. Beijing Shanghai Tianjin Shenzhen Wuhan Chongqing Chengdu Guangzhou .6 New Megacities 1. 7. 8.

Migration .

unsustainable… Increasing private consumption will not only boost GDP.Boosting Private Consumption Growth based on industrial development and exports. but “insulate itself from volatility imported from overseas” . unstable. unsteady.

Boosting Private Consumption % of GDP accounted for by private consumption United States: 71% Japan: 55% South Korea: 48% China: 36% .

Improving quality of products 3.Boosting Private Consumption Three major strategies 1.Increasing availability of consumer credit .Expanding availability of products 2.

Boosting Private Consumption Three minor strategies 1. Improved social safety-net  would boost health-care and retirement spending 2. Structural reforms  would increase household income would boost employment. consumption 3. Shift towards services  . economic growth.

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China By 2015. China will hold the world’s fourth-largest concentration of wealthy people.UNESCO Global Education Digest 2009 . . -Estimated by McKinsey Quarterly In 2007. there were 421.100 Chinese students (15% worldwide) enrolled in higher educational institutions in overseas countries.

BRIC Brazil Russia India China .

Summary BRIC BRIC Growth since 2001 Brazil India China .

Recommended Reading .

facebook.com http://www.com/ Sameer Mathur BuddingMarkets .BuddingMarkets.com/BuddingMarkets/ .000 views from more than 100 countries http://www.Over 600.