EMERGING ECONOMIESFocusing on India- Nov 2016

New Delhi | Noida | Gurgaon | Mumbai - India www.sandmartin.com 1

SandMartin Consultants

Introduction

“Emerging market country is a society transitioning from a dictatorship to a free-market-oriented-economy, with increasing economic freedom, gradual integration with the Global Marketplace and with other members of the GEM (Global Emerging Market), an expanding middle class, improving standards of living, social stability and tolerance, as well as an increase in cooperation with multilateral institutions.” Dr Kvint

Characteristics of Emerging Market Economies are:

EMEs are fastest growing economies in terms of growth rate & GDP.

EMEs are considered transactional i.e. moving from closed to an open economy.

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EMEs embark upon reforms that lead to a stronger, reliable and transparent economy.3

They attract both local and foreign investment in high quantities.4

EMEs are looking to strengthen their local currency by reforming its exchange rates.5

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Emerging Market Economies (EMEs) are countries that have some characteristics of a developed market but are not yet a fully developed market.

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Growth Differentials between Emerging and Developed Economies:

Growth Rate Comparison* MSCI Index Comparison*

Share of World’s Total GDP*

Investment as a % of GDP*

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Emerging VS Developed Economies

*SOURCE: BLOOMBERG

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Investing in Emerging MarketsMacro Economic Perspective on Why to Invest in Emerging Market Economies

The pace of growth in Emerging Market Economies is expected to be about double that of Developed Markets.

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Emerging countries have younger populations which help drive domestic consumption and fuel growth.

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Booming demand for commodities and rising export revenues have further strengthened EMEs over the recent years.

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The adoption of prudent fiscal and monetary policies by EMEs has fostered stability and growth, boosting their economic fundamentals.

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Emerging Market Economies are under-owned, they account for 80% of the world’s population and 50% of GDP but just 7% of world equity capitalization.

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Navigating Risks before Investing in EMsThere are significant misperceptions about the challenges and rewards of investing in Emerging Market Economies, the risks are either highly understated or grossly overstated. The same is true with opportunities.

The first critical step to exploit opportunities arising from the EMEs is to be well-versed about the customers, partners, stakeholders and particularly the government with which your business is being carried out. Due diligence by different types of lenses and techniques through verifiable sources is essential.

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Carrying out due diligence is challenging in the EMEs as their institutions are nascent and information frameworks under developed. Relying on self-proclaimed experts of the local economies can be a big mistake. It is essential to hire someone who has experience of working in the challenging parts of the world and can recognize similar problems when they crop up. Someone who is independent to the transaction and mutually trusted by both the parties.

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India- the most promising EME

Demographic advantage: Half of India’s 1.25 billion population is under 25.

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India is an entrepreneurial place with tremendous focus on education.

India is a democratic nation with a stable government and open economy.

The stock market has been steadily growing and the rupee is firm.

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India is the fastest growing economy at 7.8%, surpassing China recently.

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Facts & Figures about the Indian Economy GDP growth forecasts for EMEs

The above graph shows India growing at the fastest rate for 2015-16 and 2016-17.

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SandMartin believes Indian Economy will continue to remain strong, as inflation is declining and wages increasing it will raise private consumption hence boosting the economy. The reforms in doing business under Modi government has made India an attractive destination for investment .

We at SandMartin with 30+ years of experience in the market understand the Indian economy like no other firm. We have presence in major metropolitan cities of India. Our 250+ workforce have the knowledge, experience, education and skills to guide your business get the edge in this competitive market.

Our thoughts….

About - SandMartin

Services we provide

Audit & Assurance Services

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Tax Advisory Services

Foreign Investment Advisory Services

Transaction Advisory Services

Business Advisory

Management Consultancy

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We are Located in: New Delhi | Noida | Gurgaon | Mumbai - India

Emerging Economies

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