Tag Archive for 'BRIC'

BRICs at 10

Published on November 30, 2011 in Emerging Markets. 0 Comments Tags: , , , , , .

So, was he right? Ten years ago Jim O’Neill of Goldman Sachs looked at four growth economies – Brazil, China, India and Russia – put their first letters into an acronym, and the Brics (as a concept) were born.

So how have they fared? What if you invested in the Brics ten years ago – where would you be now? Chart of the week finds out. There are a myriad of ways of looking at this, but beyondbrics is going to be hard-headed and stick to equities and GDP.

A quick look at the MSCI indices for the four Brics since 2001 shows that they have comfortably outperformed the S&P 500. If you invested $100 at the time of O’Neill’s report in November 2001 in each of the four Brics, you would now have $674 from Brazil, $451 from China, $459 from India and $414 from Russia. Your 100 S&P bucks? Worth $112 [Read more].

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].

Emergence of a New Global Business Player

Published on September 2, 2010 in Global Strategy and International Business. 1 Comment Tags: , , , .

Burger King agreed on Thursday to sell itself to the investment firm 3G Capital for about $4 billion, including the assumption of debt, marking the second time in eight years that the fast-food giant has taken itself private. The agreement on Thursday for Burger King Holdings to be acquired by a Brazilian-backed investment firm, like a deal two years ago for Anheuser-Busch that involved some of the same investors, is one of those emblematic transactions that seem to herald the emergence of a new global business player.

The growth of the Brazilian economy in recent years has created a whole new class of wealthy entrepreneurs who are looking for opportunities to invest their fortunes and are not daunted by the idea of trying their luck beyond Brazil’s borders. Traditionally, Brazilian business has been dominated by an often cautious elite based in São Paulo, the country’s industrial and financial hub. But the economic surge of the last decade has changed that.

One thing is clear, though: Brazil’s dominance in all phases of the global beef industry. The country is already the leading beef exporter and now, thanks to the Burger King deal on Thursday, it has another outlet to encourage consumption globally [Source].

Investors Explore the Frontier Markets

Published on April 15, 2010 in Emerging Markets. 0 Comments Tags: , , , .

This year the real action for risk-tolerant global investors is on the frontier.

The MSCI Barra Frontier Markets index tracks equities of 25 countries, including six in the Middle East that account for 55% of the index’s total market capitalization. Year-to-date as of Apr. 12, the Frontier Markets index was up 13.66% compared with a 4.09% gain by the BRIC countries (Brazil, India, China, and Russia) in aggregate and a 5.25% increase for the emerging markets overall.

The distinction between emerging and frontier markets mostly concerns size and how far along they are in developing legal and regulatory systems, critical elements for international investors [Source].

More on Frontier Markets van be found here:
Frontier Markets: To boldly go where few investors have gone before!

MSCI Frontier Markets Indices.

First summit for Emerging Giants

Published on June 16, 2009 in Emerging Markets. 0 Comments Tags: , , , .

bric

Leaders of Brazil, Russia, India and China, known collectively as the BRIC countries, will gather for their first official summit in Yekaterinburg, Russia, on Tuesday June 16th.

China and India have continued to grow reasonably quickly despite the global downturn, and although Brazil is in recession many expect it to recover soon. Of the four economies Russia, which is heavily dependent on oil exports, has been the worst affected.

The leaders may discuss long-term plans to find an alternative to the dollar as a global currency. Another possible topic for consideration is trade in commodities: China and India are heavy importers of many commodities such as oil; Russia and Brazil are big exporters of raw materials. [Source FT] [Source BBC]

A brigther future for the car industry?

Published on June 5, 2009 in Emerging Markets. 0 Comments Tags: , , .

Car ShoppingEven as they struggle through the economic meltdown, car makers can look ahead to a high-growth, flexible, global future according to “strategy+business”.

Research conducted by Booz & Company shows that the global customer base for cars over the next 10 years falls into three broad categories, based primarily on which countries customers live in.

  1. The rapidly emerging economies (REEs) consist of the so-called BRIC nations (Brazil, Russia, India, and China) and a group of other relatively wealthy developing nations, such as Malaysia, Argentina, Mexico, Turkey, Thailand, Iran, and Indonesia. Millions of families in these countries are making or contemplating the purchase of their first car.
  2. The lower-growth economies (compared to the REEs) consist of about 100 nations with relatively impoverished populations and poor economic prospects. However, their political leaders are interested in building up the middle class and see personal mobility as a major stepping stone. These countries may become markets for motorised transportation after 2020.
  3. The mature economies include the established industrialized nations in North America and Europe, and Japan. Population growth and vehicle replacement, rather than economic growth, will determine the market for cars there.

Together, these three groups add up to an enormous amount of market potential. Estimates suggest that more than 370 million additional vehicles could be sold by 2013 and more than 715 million by 2018. Please click here to download the complete article.

Investment Outlook 2009

Published on December 8, 2008 in International Finance. 1 Comment Tags: , , , .

The highlights of Reuter’s Investment 2009 summit can be found here.

As the financial crisis continues to roil credit and stock markets around the globe, it seems that no country or continent is being spared the consequences. Brazil, Russia, India and China — the BRIC countries — are no exception. Knowledge @ Wharton covered this topic here (Feeling the Pain: How the Financial Crisis Is Affecting Brazil, Russia, India and China).

Diversification @ Vodafone

Published on April 12, 2008 in Global Strategy. 0 Comments Tags: , , .

Vodafone HQIn an interview with the BBC, the boss of the world’s largest mobile phone company (by revenue) Britain’s Vodafone Group plc was upbeat about his company’s prospects at weathering the credit crunch clouds hovering over businesses in Europe and the US.

Under oversight of Arun Sarin (CEO), Vodafone has successfully repositioned the company to counter global forces for the upcoming years. It can be characterised as a textbook example of a diversification strategy in terms of market segments (offered products and services) and geographical areas (geographic spread).

Yesterday it was a mobile telecom company and tomorrow it wil be a mobile telecom, internet, broadband, and financial service company. Furthermore, Vodafone used be very OECD developed market centric and now they have added an emerging markets portfolio with strong presence in the BRIC countries and further pushing into the Next Eleven (n-11) countries. The entire interview with Arun Sarin can be found here.

Happy 50th Anniversary!

Published on January 29, 2008 in International Business and Social Media. 0 Comments Tags: , , , .

LEGO LogoHappy 50th Anniversary for LEGO! Hearing or reading the name LEGO always brings up good memories and puts a smile on my face! During my childhood LEGO was my favourite toy! I could literally play all day with it! Yesterday was the official 50th anniversary of LEGO.

From a business perspective LEGO is a text-book example of a company that successfully transformed itself for the 21st century. Late 90s LEGO seemed to have had its best time. However it managed to blend in and fully adapt internet in its business model. Resulting in the fact that you now can first build your very own artwork online and have it delivered at your house in the famous interlocking bricks!

Furthermore, if you do a really good work in making your own LEGO artwork it can even be put in mass production by LEGO and put up in stores worldwide. LEGO gives you royalties of 5%, which in turn can make you a good living. Building and ordering LEGO bricks online now accounts for 10% of sales. So still loads of potential especially if you take in account the long tail. Building and ordering your very own LEGO artwork online is basically an unlimited supply of LEGO artwork variety.

The new radar screen of VCs

Published on June 17, 2007 in Emerging Markets and International Finance. 0 Comments Tags: , , , , , , , .

What’s currently on the radar screen of Venture Capitalists (VCs)? In short, finally, they are starting to look beyond China and India respectively: Central and Eastern Europe.

At the very moment, first, there is Central and Eastern Europe. At least $500 million is sitting in fund targeting the Central and Eastern European region and much more is foreseen. This growth is enabled by a few success stories such as Skype and Last.fm, and in turn, this has triggered a new wave of fresh and new European entrepreneurial spirit. Furthermore, the accession of ten new European Union members from Central and Easter European countries has spurred investments across the region. The previous locked up energetic talent in this region has now gained equal access – as their Western European counterparts – to European capital markets and legislative protection.

In addition, as BusinessWeek pointed out earlier VCs are even having their eyesight beyond the traditional BRIC and Next Eleven (N-11) countries for example out of all places, Colombia, Latin-America. A multitude of young, bright and entrepreneurial minded people is ready to take the country up on the economic ladder. BusinessWeek typified Colombia as an extreme emerging market. It take guts and political sensitivity to start investing there but it can reap endless possibilities.

Here you can find a list of the top 500 European hot growth companies. Another listing can be found here. The latest and greatest news on European Private Equity & venture capital can be found here.

Some more great webpages to keep you updated on any activity at the European VC front can be found here. European Venture Capital & Private Equity Journal; FT European Venture Capital Report; Venture Capital in Europe (Book); and Profitability of venture capital investment in Europe and the US (Research Paper).