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INTRODUCTION

TO EMERGING

MARKETS

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Agenda

BRIC

BRIC Growth since 2001

Brazil

India

China

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Certainly, Mexico, the four BRIC countries and

Korea should not be really thought of as emerging

markets in the class ical sense, as we regard

these countries as a critical part of the modern

globalised economy

BRIC

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http://buddingmarkets.com/

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Brazil 369%

Russia 630%

India 499%

China 201%using the A-share market

BRIC Growth Since 2001

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Worlds fifth largest country

President Dilma Rousseff

Lagging behind growth estimations

Brazil

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In order for Brazil to raise its growth rates and

converge towards its peers in the BRICs, [it] will

have to focus on f iscal po l icy, trade po l icy,

educat ion and modernizing ins t i tu t ions .

Growth

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1. Improve savings and investments2. Lower trade barriers

3. Improve quality of education

4. Introduce structural reforms

Brazils Underperformance

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2. Lower trade barriers

Brazils trade share = 25% of GDP

Russians trade share: 41% of GDPChinas trade share: almost two-thirds of GDP

Importance of Trade

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Worlds second largest population

President Pratibha Devisingh Patil

India

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6 Major Factors1.Lowering trade barriers

2.Rise of financial sector

3.Rise of IT sector4.Golden Quadrilateral Highway

5.Urbanization

6.Land factor

Change in India

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4. Golden Quadrilateral

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3,625 milesFour/Six lanes

Connects four largest cities:

Delhi (N), Kolkata (E),Chennai (S), Mumbai (W)

Almost completed

4. Golden Quadrilateral

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10 of 30 fastest growing cities worldwide

Urbanization in India

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Segments in India

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Segments in India

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Consumption in India

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Share-of-Wallet

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Income Pyramid

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Consumption Categories

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Attract, educate new consumers.Retain brand loyalty with rising tastes.

Offer high-value at accessible (low)

price.

New Challenges

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Worlds largest population over 1.3billion

Governed by CPC (Communist

Party)

China

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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 9.6% from 1978 to 2004Reference point: Brazils unattained forecast was 5.0%

Chinas Growth

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Will China grow old before getting rich?

Chinas Aging

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Chinas Aging

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1978

Chinas One-Child Policy

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Economy should continue to grow.Renewed opportunities for Chinas

neighbors.

Aging benefits specific factors(Insurance, pharmaceuticals,

biotech).

Implications

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Forecast

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Some Numbers

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1. Beijing2. Shanghai

3. Tianjin

4. Shenzhen5. Wuhan

6. Chongqing

7. Chengdu

8. Guangzhou

6 New Megacities

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Migration

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Growth based on industrial development andexports; unsteady, unstable, unsustainable

Increasing private consumption will not onlyboost GDP, but insulate itself from volatility

imported from overseas

Boosting Private Consumption

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% of GDP accounted for by private

consumption

United States: 71%

Japan: 55%

South Korea: 48%

China: 36%

Boosting Private Consumption

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Threemajor strategies

1.Expanding availability of products

2.Improving quality of products3.Increasing availability of consumer credit

Boosting Private Consumption

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Threeminor strategies

1. Improved social safety-netwould boost health-care and retirement spending

2. Structural reformswould increase household income

3. Shift towards serviceswould boost employment, economic growth, consumption

Boosting Private Consumption

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By 2015, China will hold the worlds fourth-largest

concentration of wealthy people.

-Estimated by McKinsey Quarterly

In 2007, there were 421,100 Chinese students

(15% worldwide) enrolled in higher educational

institutions in overseas countries.

- UNESCO Global Education Digest 2009

China

BRIC

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Brazil

Russia

India

China

BRIC

S

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Summary

BRIC

BRIC Growth since 2001

Brazil

India

China

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Recommended Reading

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