Monthly Archive for December, 2010

The Emerging Emerging Markets

Published on December 23, 2010 in Emerging Markets. 0 Comments Tags: , , , .

The “new” emerging markets come in two varieties: “overlooked” countries that can rival the BRICs in terms of prosperity; and “frontier” countries that are only just beginning to emerge from their chrysalises.

The biggest concentration of overlooked markets is in Africa (which is in many ways an overlooked continent). Africa’s star performers are South Africa, Egypt, Algeria, Botswana, Libya, Mauritius, Morocco and Tunisia. Collectively these countries match the average GDP per head of the BRICs. Basically there are greatly overlooked emerging giants in every corner of the world. For example in the Middle East, Turkey and Saudi Arabia will attract a lot of attention. But the biggest praise will be for Indonesia: it will be the emerging-market star of 2011, with analysts lauding its innovative companies, growing middle class and relative political stability [Source].

The frontier markets are poorer and riskier than the overlooked ones. They include Sri Lanka, Bangladesh and Pakistan in Asia, as well as Kenya, Nigeria and Rwanda in sub-Saharan Africa. You will hear a great deal about the unexpected merits of frontier economies in 2011. Nigeria, home to the tenth-largest oil reserves in the world, has stabilised its politics. The World Bank listed Rwanda as its champion pro-business reformer in 2010. Analysts will develop a special enthusiasm for Vietnam, which is well-placed to steal outsourcing jobs from China [Investors Explore the Frontier Markets].

Israel and the Innovative Impulse

Published on December 21, 2010 in High Tech & Media. 0 Comments Tags: , , , .

Despite its small size and geopolitical isolation, Israel has developed a global reputation for its cutting-edge high-tech industry.

Knowledge @ Wharton’s special report on Israel explores the drivers behind Israel’s innovative impulse, looks at the partnerships Israeli firms have forged with U.S. companies and the reasons why the Israeli venture capital business is undergoing a painful period of adjustment [Source].

VCs say they’ll invest, hire and sell more in 2011

Published on December 20, 2010 in International Business. 0 Comments Tags: , .

Venture capitalists say they will invest more in 2011 as hiring in the sector heats up and selling begins to shake off the lingering woes of the financial crisis, according to a study released today by the National Venture Capital Association (NVCA) and Dow Jones VentureSource.

Still, despite the initial upbeat nature of the report, it is clear that many venture capitalists remain worried about a bubble developing in Silicon Valley and are divided about how fundraising will shape up over 2011 [Source].

Chinese I.P.O. Bubble?

Published on December 14, 2010 in International Finance. 0 Comments Tags: , .

China-based companies have gone public on the U.S. market in record numbers in 2010. Last week, shares of Youku, called the YouTube of China, rose 161 percent in the first day of trading on the New York Stock Exchange. E-commerce China Dangdang, an online retailer heralded as the Chinese Amazon.com, popped 87 percent after its initial public offering the same day.

Amid a sluggish I.P.O. market, companies from China are finding a home in the United States. Last week, six Chinese stocks started trading on the New York Stock Exchange and Nasdaq, the most ever in a single week. The 35 Chinese offerings so far this year have accounted for 23 percent of I.P.O.’s in the United States, up from 1 percent in 2000, according to Thomson Reuters.

The trick for investors— as in the late 1990s dot-com bubble — is separating the future Amazons from the Pets.coms. While I.P.O.’s can make investment bankers and founders rich, regular investors who do not get the initial price rarely make the same returns.

[Source 1] [Source 2]

Private Equity is shifting focus to Asia

Published on December 13, 2010 in Emerging Markets. 0 Comments Tags: , .

Blackstone Group named Michael Chae, one of its most senior deal makers in the United States, to head the firm’s private equity business in Asia. He will be based in Hong Kong. The move underscores the private equity industry’s shifting focus to regions outside the United States, particularly Asia.

Blackstone’s president, Hamilton James, has said that he expects roughly half the firm’s deals to be in Asia next year. And Stephen Schwarzman, the firm’s co-founder and chief executive, is relocating to Europe for three to four months next year, in part to oversee the firm’s international portfolio and be close to Asia, where he spends much of his time.

“Michael is one of our leaders and most senior partners in our private equity business, and his move to lead our business in Asia reflects our growing commitment to the region,” Mr. Schwarzman said in a statement. “As our business continues to globalize, Asia is becoming ever more central to the firm.”