laying the groundwork: an emerging markets overview

Laying the Groundwork:An Emerging Markets Overview

CMAG 42 at Cisco in San JoseMarch 5, 2009

Joe Gatto and Jeff [email protected] | [email protected]

International Planning & Researchwww.iprcorp.com

Agenda and Summary of Highlights

• Market Characteristics- Market characteristics and economic measures can be used to prioritize/rank the huge

number of emerging markets. The BRIC are near the top, but others surface as well

• Economic Updates- BRIC countries are all being impacted by the worldwide recession, but there are key

differences that need to be comprehended in their assessment; these differences can be tracked with timely data available from a variety of country/international sources

• Early Warning System - An early warning system “dashboard” with a common look and feel can help to

summarize and make digestible the vast amount of country-level tracking data for those who need to know but don't have the time to take the deep dive

- Beyond a “headlights” capability, statistical modeling of the relationship between IT spending and underlying economic conditions leads to better business planning

• Appendix

What Makes an Emerging Market?

Sufficient SizeLevel of

Economic Development

EmergingMarket

GrowthRate

?

0%

2%

4%

6%

8%

10%

12%

$0 $2,000 $4,000 $6,000 $8,000 $10,000

Emerging Markets at a Glance: GDP

GDP per Capita (2008)

20

00

-20

08

C

AG

R

China$2.4T

Size of circle reflects size of economy in 2000 $USD at market rates

Argentina

SaudiArabia

Libya

CzechRepublic

Chile

Mexico

Venezuela

HungaryPoland

MalaysiaSouthAfrica

Brazil

Turkey

Russia

Peru

India

Thailand

Romania

ColombiaAlgeria

IranEgypt

Philippines

Ukraine

Indonesia

Pakistan

N = NigeriaB = Bangladesh

Vietnam

N

B

Source: IPR Worldwide Economics/Demographics Database

0 10 20 30 40 50 60 70 80 90

VenezuelaNigeriaRussia

PakistanI ran

BangladeshAlgeria

PeruIndonesia

UkraineLibya

PhilippinesMexico

ColombiaVietnam

ArgentinaChinaBrazil

RomaniaEgypt

ThailandTurkey

IndiaSouth AfricaSaudi Arabia

PolandMalaysiaHungary

Czech RepublicChile

Governance Indicators: Rule of LawPercentile Rank

Source: World Bank Governance Indicators

Based on 77 individual variables from 26 sources. Measures perceptions of the extent to which agents have confidence in and abide by the rules of society, and in particular the quality ofcontract enforcement, property rights, the police, and the courts, as well as the likelihood of crime and violence.

0 10 20 30 40 50 60

ColombiaBrazil

South AfricaChilePeru

ArgentinaMexico

MalaysiaPhilippines

ChinaVenezuela

NigeriaTurkey

I ranThailand

RussiaVietnam

AlgeriaPolandEgypt

I ndonesiaI ndia

BangladeshRomaniaPakistanUkraine

HungaryCzech Rep.

Gini Coefficients

Source: World Bank

Measure of income inequality. Coefficient of zero means that everyone in the country has exactly the same income; coefficient of 100 means that one person has all the income, and no one else in the country has any.

Cell Phone Subscribers vs. GDP

Source: International Telecommunications Union, IPR Worldwide Economics/Demographics Database

0

20

40

60

80

100

120

140

$0 $2,000 $4,000 $6,000 $8,000 $10,000


Ce

ll P

ho

ne

Su

bs

cri

be

rs 1

00

In

ha

bit

an

ts (

20

07

)

Argentina

SaudiArabia

Libya

CzechRepublic

Chile

Mexico

Venezuela

HungaryPoland

MalaysiaSouthAfrica

Brazil

Turkey

Russia

Peru

Thailand

Romania

Colombia

Algeria

IranEgypt

China

Philippines

Ukraine

Indonesia

IndiaVietnam

Pakistan

Nigeria

Bangladesh

Internet Users vs. GDP

Sources: International Telecommunications Union, IPR Worldwide Economics/Demographics Database

0

10

20

30

40

50

60

$0 $2,000 $4,000 $6,000 $8,000 $10,000


Inte

rne

t U

se

rs p

er

10

0 I

nh

ab

ita

nts

(2

00

7)

ArgentinaSaudi Arabia

Libya

Czech Republic

Chile

MexicoVenezuela

HungaryPoland

Malaysia

South Africa

Brazil

TurkeyRussia

Peru

Thailand

Romania

Colombia

Algeria

Iran

EgyptChina

Philippines

Ukraine

Indonesia

India

Vietnam

Pakistan

Nigeria

Bangladesh

Emerging Markets ScorecardRank in Parentheses

WeightedRank

Weight 100%China 2,390 (1) 1,796 (22) 10.1% (1) 42 (14) 45 (19) 41 (24) 16 (20) 1India 811 (2) 707 (26) 7.2% (3) 56 (8) 33 (7) 20 (30) 7 (25) 2Russia 434 (5) 3,083 (14) 6.6% (5) 17 (28) 40 (13) 115 (4) 21 (15) 3Saudi Arabia 260 (8) 9,217 (2) 3.8% (27) 59 (6) NA 115 (3) 25 (11) 4Argentina 391 (6) 9,622 (1) 4.1% (26) 39 (15) 53 (23) 102 (8) 24 (12) 5Turkey 288 (7) 4,005 (13) 4.6% (19) 53 (9) 44 (16) 83 (13) 20 (19) 6Brazil 785 (3) 4,089 (12) 3.5% (28) 43 (13) 58 (27) 63 (19) 26 (10) 7Poland 231 (10) 5,992 (9) 4.1% (25) 59 (5) 35 (10) 109 (6) 42 (4) 8Mexico 701 (4) 6,375 (6) 2.4% (30) 34 (18) 50 (22) 64 (18) 21 (14) 9Thailand 181 (12) 2,759 (16) 5.0% (15) 53 (10) 42 (14) 80 (15) 21 (16) 10Malaysia 135 (16) 5,343 (10) 5.1% (14) 65 (4) 49 (21) 88 (9) 60 (1) 11Indonesia 247 (9) 1,041 (25) 5.2% (13) 27 (22) 34 (8) 35 (26) 6 (28) 12South Africa 184 (11) 4,204 (11) 4.1% (24) 57 (7) 58 (26) 87 (10) 8 (24) 13Venezuela 167 (13) 6,313 (7) 4.5% (21) 3 (30) 44 (18) 86 (11) 21 (17) 14Iran 147 (15) 2,224 (20) 5.7% (11) 21 (26) 43 (15) 42 (23) 32 (7) 15Czech Republic 86 (21) 8,436 (4) 4.5% (22) 74 (2) 25 (1) 128 (1) 43 (3) 16Egypt 151 (14) 1,848 (21) 4.8% (17) 52 (11) 34 (9) 40 (25) 11 (21) 17Chile 106 (20) 6,436 (5) 4.3% (23) 88 (1) 57 (25) 84 (12) 33 (6) 18Colombia 120 (17) 2,673 (18) 4.6% (18) 36 (17) 59 (28) 74 (16) 26 (9) 19Pakistan 112 (18) 667 (27) 5.2% (12) 20 (27) 31 (4) 48 (22) 11 (22) 20Peru 84 (22) 2,871 (15) 5.8% (9) 27 (23) 55 (24) 55 (21) 27 (8) 21Romania 60 (27) 2,708 (17) 6.3% (8) 50 (12) 31 (5) 107 (7) 56 (2) 22Philippines 111 (19) 1,201 (23) 4.9% (16) 34 (19) 46 (20) 59 (20) 6 (27) 23Libya 56 (28) 9,063 (3) 6.5% (7) 32 (20) NA 73 (17) 5 (29) 24Ukraine 54 (30) 1,180 (24) 7.1% (4) 28 (21) 28 (3) 120 (2) 22 (13) 25Hungary 63 (26) 6,308 (8) 3.5% (29) 73 (3) 27 (2) 110 (5) 42 (5) 26Algeria 78 (23) 2,314 (19) 4.5% (20) 26 (24) 35 (11) 81 (14) 10 (23) 27Nigeria 77 (24) 555 (29) 6.6% (6) 9 (29) 44 (17) 27 (27) 7 (26) 28Vietnam 56 (29) 647 (28) 7.5% (2) 39 (16) 37 (12) 27 (28) 20 (18) 29Bangladesh 74 (25) 480 (30) 5.8% (10) 25 (25) 32 (6) 22 (29) 0 (30) 30

Rule of Law5%

Cell PhoneSubscribers

5%

Gini

5%Coefficient

InternetUsage

5%

2000-08CAGR

50% 10% 20%

GDP $B(2008) GDP/Capita

Stock Market Index Performance52-Week Change as of March 1, 2009: Local Currency

-46%

-51% -51%-53% -53%

-57%-58%

-72%

-45% -43% -45%

-40% -41%

-75%

-50%

-25%

0%China

SaudiArabiaThailand ArgentinaIndiaTurkeyBrazilMexico RussiaPoland

Sources: bloomberg.com (Saudi Arabia - TASI), MSCI Barra (Others)

U.S.WesternEurope Japan

Anatomy of a MeltdownChanges in Forecast of 2009 GDP Growth between September 2008 and February 2009

0.8% 1.0%

1.8%

-2.6%

1.1%

-0.7%

0.0%

-1.5%

-0.3%

-1.6%

5.1%

6.7%

-2.0%-2.5%

0.0%

2.5%

5.0%

7.5%

10.0%

China SaudiArabia

ThailandArgentina

India

Turkey

Brazil

MexicoRussia

Poland

Sources: IMF, IPR

U.S.

September to OctoberOctober to NovemberNovember to DecemberDecember to JanuaryJanuary to February

September Forecast 9.4%9.4%

7.4%

6.3%5.8%

5.1%

4.1% 4.0% 4.0%3.6%

2.1%

0.4%

February Forecast 6.7%

ForecastReductions

0.6% 0.8%

WesternEurope Japan

Spotlight on…ChinaGDP, CPI and Industrial Production Expressed as Change vs. Year-Ago

6%

8%

10%

12%

1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q084%

6%

8%

10%

12%

2007 2008 2009 2010 2011 2012

GDP Quarterly History

Source: China National Bureau of Statistics

GDP Annual Forecast

Source: IPR WW Economics/Demographics Database

0%

5%

10%

Jan-07 Jan-08 Jan-09

Consumer Price Index


5%

10%

15%

20%

25%


Industrial Production


U.S.

Hong Kong

Japan

S. Korea

Largest Export MarketsExports = 35% of GDP (2008)

Source: CIA World Factbook (2008)

Spotlight on…IndiaGDP, CPI and Industrial Production Expressed as Change vs. Year-Ago

4%

6%

8%

10%

1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q084%

6%

8%

10%

12%

2007 2008 2009 2010 2011 2012


Source :India National Informatics Centre

GDP Annual Forecast


5%

10%

15%



Source: CSO- India

-5%

0%

5%

10%

15%



Source: CSO - India

U.S.

China

U.A.E.

U.K.



Spotlight on…RussiaGDP, CPI and Industrial Production Expressed as Change vs. Year-Ago

4%

6%

8%

10%

1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 -2%

0%

2%

4%

6%

8%

2007 2008 2009 2010 2011 2012


Source: Russian Federation on Statistics

GDP Annual Forecast


7.5%

12.5%

17.5%



-15%

-10%

-5%

0%

5%

10%

15%





Source: Russian Federation on Statistics Source: Russian Federation on Statistics

Italy

Germany

Turkey

Netherlands

Spotlight on…BrazilGDP, CPI and Industrial Production Expressed as Change vs. Year-Ago

3%

5%

7%

9%

1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q080%

2%

4%

6%

8%

2007 2008 2009 2010 2011 2012


Source: Brazilian Institute of Geography and Statistics

GDP Annual Forecast


0%

5%

10%



-15%

-10%

-5%

0%

5%

10%



U.S.

China

Netherlands

Argentina



Source: Brazilian Institute of Geography and Statistics Source: Brazilian Institute of Geography and Statistics

Spotlight on…United StatesGDP, CPI and Industrial Production Expressed as Change vs. Year-Ago

-2%

0%

2%

4%

1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08

-3%

-1%

1%

3%

5%

2007 2008 2009 2010 2011 2012


Source: U.S. Bureau of Economic Analysis

GDP Annual Forecast


-2.5%

2.5%

7.5%



Source: U.S. Bureau of Labor Statistics

-15%

-10%

-5%

0%

5%

10%



Source: U.S. Federal Reserve

Canada

Mexico

China

J apan



Decomposing Changes in U.S. GDP

• GDP increased by $109B in 1H08 but declined by $219B in 2H08 – a swing of $328B• Net exports accounted for almost all the gain in GDP for 1H08, but were practically flat in 2H08• Contraction in economy for 2H08 due to collapse in final private domestic demand (primarily

personal consumption and non-residential investment), which dropped even more than GDP• Residential investment was actually less of a drag in 2H08 (-$37B) than it was in 1H08 (-$42B)• Involuntary inventory buildup contributed to economic output in 2H08 (after being a drag in

1H08) but as this unwinds in 1H09 it will further depress GDP

Change vs. Prior Period ($B) 1H08 2H08 Delta Personal Consumption 43 -171 -214+ Non-Residential Investment 17 -88 -105+ Residential Investment -42 -37 5+ State/Local Government 7 0 -7= Final Private Domestic Demand 25 -297 -322+ Federal Government 23 39 16+ Change in Inventories -43 31 74+ Net Exports 103 8 -95= GDP 109 -219 -328Source: U.S. Bureau of Economic Analysis (Chained 2000 Dollars)

Early Warning SystemsFor Mature and Emerging Markets

• Early Warning Systems (EWS) provide “market alerts” and “headlights” capabilities that anticipate likely changes in market growth dynamics and enable responses “ahead of the curve”

• EWS provide surveillance and monitoring of key high-frequency economic and market-related leading indicators expected to most accurately reflect the market landscape in the short-term

• EWS focus on identifying and tracking the key high-frequency economic and market-related series determined to be the most robust indicators of future growth in both mature and emerging markets

– One advantage of leveraging the high-frequency economic and market-related leading indicators is that they are generally publicly available and published well before data sources which cover the technology markets

• Once a subset of key indicators is identified, predictive modeling techniques can be employed to quantify the relationships between the high-frequency leading indicators and historical market growth to assess the likely impacts of changes in the indicators on market growth over the next several quarters

• Monthly EWS “market alerts” reports provide country-specific “dashboards” that focus on the most important high-frequency leading indicators so that the growth dynamics of the relevant markets can be visually monitored and evaluated

• EWS also generally enable “headlights” capabilities that identify the likely implications of recent movements in the leading indicators on existing market growth forecasts

US Industrial ProductionFederal Reserve Bank, monthly

Dec 2008 Jan 2009 IT Implication-8.2% -10.0%

Y/Y% Change Y/Y% Change

United StatesComputers & Peripheral Equipment Investment

US BEA, quarterly

-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

1998 | Jan

1998 | Jul

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2009 | Jan

2009 | Jul

US Industrial Production,Y/ Y % chg USComputers & Peripheral Equipment Investment, Y/ Y % chg

US Industrial Production year-to-year growth ppears to be a strong positive indicator of year-to-year growth in US Computers & Peripheral Equipment Investment. The relationship appears to be strongest when compared to Computers & Peripheral Equipment growth two quarters ahead.

IndustrialProduction continued to slow in January, shrinking at a rate of -10.0% year-over-year, following a -8.2% contraction in December. This latest sharp decline marks the 11th consecutive

month of negative year-to-year growth in the indicator, suggesting the likelihood of strongly decelerating Computers & Peripheral Equipmentgrowth thru at least the first half of 2009.

Series DescriptionUS Industrial Production refers to the goods produced in mining (including oil extraction), manufacturing, and production of electricity, gas and water (ISIC Categories C, D, and E, Sectors 10 to 40) in the US. The Index is published by the Federal Reserve Bank on a monthly basis.

EWS Market Alerts

Country Dashboard: US Computers & Peripheral Equipment Investment

EWS Market Alerts

Country Dashboard: US Computers & Peripheral Equipment Investment

US Purchasing Managers Index, Manuf.Institute for Supply Management (ISM), monthly

Dec 2008 Jan 2009 IT Implication32.9 35.6

Index Level Index Level

United StatesComputers & Peripheral Equipment Investment

US BEA, quarterly

-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

20

25

30

35

40

45

50

55

60

65

70

1998 | Jan

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2009 | Jul

US Purchasing Managers Index Level US Computers & Peripheral Equipment Investment, Y/ Y % chg

The US Purchasing Managers Index appears to be a strong positive indicator of year-to-year growth in US Computers & Peripheral Equipment Investment. The relationship appears to be strongest when compared to Computers & Peripherals Equipment growth two quarters ahead.

The Purchasing Managers Index rose just under three points to a levelof 35.6 in January, marking the first upward movement in six months. However, since a level of 50 is the threshold for whether the sector is expanding or contracting, a reading in the mid-30s indicates the manufacturing economy is contracting significantly. This

continued weakness suggests the likelihood of strongly decelerating US Computers & Peripheral Equipment growth thru the first half of 2009. However, if the trend in the Index continues to improve, it could be signaling the start of a recovery in US Computers & Peripheral Equipment growth in 3Q09.

Series DescriptionAn indicator of the economic health of the manufacturing sector, the US Purchasing ManagersIndex (PMI) is based on five major indicators: new orders, inventory levels, production, supplier deliveries and the employment environment. The Institute for Supply Management (ISM) produces the PMI on a monthly basis. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.

US Headlights: Predictive Model ForecastsComputers & Peripheral Equipment

-35-30-25-20-15-10

-505

101520253035

19

95

Q1

19

95

Q3

19

96

Q1

19

96

Q3

19

97

Q1

19

97

Q3

19

98

Q1

19

98

Q3

19

99

Q1

19

99

Q3

20

00

Q1

20

00

Q3

20

01

Q1

20

01

Q3

20

02

Q1

20

02

Q3

20

03

Q1

20

03

Q3

20

04

Q1

20

04

Q3

20

05

Q1

20

05

Q3

20

06

Q1

20

06

Q3

20

07

Q1

20

07

Q3

20

08

Q1

20

08

Q3

20

09

Q1

20

09

Q3

20

10

Q1

(Y/Y % Growth)

US Computers & Peripheral Equipment Forecasts 1997q1 - 2010q1

BEA Computers & Peripheral Equipment Pessimistic Forecast Optimistic Forecast

Brazil Real Gross Domestic Product IndexIBGE, quarterly

2Q 2008 3Q 2008 IT Implication7.0% 7.1%

Y/Y % Chg Y/Y % Chg

Brazil

Office Machinery & Data Processing Eqpt Ind Prod IndexIBGE, monthly, SA

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

0%

1%

2%

3%

4%

5%

6%

7%

8%

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Office Machinery & Data Processing Eqpt Ind Prod Index, Y/ Y % chgBrazil Index of RealGross Deomestic Product, Y/ Y % chg

Brazil Real Gross Domestic Product Index year-to-yeargrowth is a moderate positive indicator of year-to-year growth in Brazil Office Machinery & Data Processing Equipment. The relationship appears to be strongest when compared one quarter ahead.

The Y/Y growth of the Brazil Gross DomesticProduct Index was 7.1% in the third quarter in 2008, following 7.0% in the second quarter. The growth rate of the index was reported at 7.0% in the first quarter. The high momentum in the GDP

growth has gradually cooled down in the second half of 2008. The recent movements of the indicator suggest a stable growth trend Office Machinery & Data Processing Equipment Industrial Production thru 4Q08.

Series DescriptionBrazil Real Gross Domestic Product Index measures Brazil's national income and output. This seasonally adjusted series is reported by IBGE on a quarterly basis. The indicator is set to 100 in the base year of 1995.

EWS Market Alerts Country Dashboard: Brazil Office Machinery & Data Processing Equipment

Although GDP is an important indicator of growth, for Brazil Office Machinery & Data Processing Equipment the relationship is only moderate


Brazil Composite Leading IndicatorOECD, monthly

Nov 2008 Dec 2008 IT Implication0.6% -1.0%

Y/Y % Chg Y/Y % Chg

Brazil

IBGE, monthly, SA

Office Machinery & Data Processing Eqpt Ind Prod Index

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

2003 | Jan

2003 | Apr

2003 | Jul

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2009 | Oct

Office Machinery & Data Processing Eqpt Ind Prod Index, Y/ Y % chgBrazil CompositeLeading Indicator, Y/ Y % chg

Brazil Composite Leading Indicator year-to-year growth is a strong positive indicator of year-to-year growth in Brazil Office Machinery & Data Processing Equipment. The relationship appears to be strongest when compared one to two quarters ahead.

The Y/Y growth of the Brazil Composite Leading Indicator fell to -1.0% in December after growing at 0.6% in November. The indicator peaked at 5.1% in June 2008, followed by 5.0% in July, and slid to 4.5% in August. The growth rate was 3.5% in September

before it decelerated further to 2.1% in October. The collective movements of the indicator suggest strongly decelerating growth for Brazil Office Machinery & Data Processing Equipment Industrial Production thru at least 2Q09.

Series DescriptionComposite Leading Indicators (CLIs) are designed to predict cyclical turning points in aggregate economic activity. The OECD CLIs published monthly are comprised of a set of component series from a wide range of economic indicators.

This indicator signaled a significant slowdown in Brazil Office Machinery & Data Processing Equipment growth was on the horizon in the third quarter of 2008


US Total Retail Trade Volume Index OECD, monthly, SA

Nov 2008 Dec 2008 IT Implication-6.1% -8.0%

Y/Y % Chg Y/Y % Chg

BrazilOffice Machinery & Data Processing Eqpt Ind Prod Index

IBGE, monthly, SA

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

-8%

-7%

-6%

-5%

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

2003 | Jan

2003 | Apr

2003 | Jul

2003 | Oct

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Office Machinery & Data Processing EqptInd Prod Index, Y/ Y % chgUS Total Retail Trade Volume Index, Y/ Y % chg

US Total Retail Trade Volume Index year-to-year growth is a strong positive indicator of year-to-year growth in Brazil Office Machinery & Data Processing Equipment Industrial Production. The relationship appears to be strongest when compared to one to two quarters ahead.

The Y/Y growth of US Total Retail Trade Volume Index reported a sharp deceleration of -8.0% in December from -6.1% in November. The growth rate of the index has been in negative territory for 11 months, since February 2008, and has been accelerating in the negative direction over the past 5 months. The growth rate in August was -

1.5%, before falling to -3.4% in September ,and then exhibiting another decline to -4.2% in October. The recent movements of the indicator suggest strongly decelerating growth for Brazil Office Machinery & Data Processing EquipmentIndustrial Production thru at least 2Q09.

Series DescriptionThe US Total Retail Trade Volume Index comprises all retail spending, and is deflated by OECD using an appropriate consumer price index. The indicator is reported by OECD on a monthly basis. The index has a value of 100 in 2000.

For the BRIC countries, US and other G-7 series are often better indicators of technology market growth than country-specific ones

Brazil Real Value-Added Tax IndexIBGE, quarterly, SA

2Q 2008 3Q 2008 IT Implication6.8% 6.5%

Y/Y % Chg Y/Y % Chg

BrazilOffice Machinery & Data Processing Eqpt Ind Prod Index

IBGE, monthly, SA

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0% -40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

2003 | Jan

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2008 | Jan

2008 | Apr

2008 | Jul

2008 | Oct

2009 | Jan

2009 | Apr

2009 | Jul

2009 | Oct

Brazil Real VAT Index, Y/ Y % chg Office Machinery & Data Processing Eqpt Ind Prod Index, Y/ Y % chg

The Brazil Real Value-Added Tax Index in the third quarter of 2008 reported a Y/Y growth rate of 6.5%, slightly lowered by 0.3 points from the growth rate of 6.8% in 2Q08. Earlier in the year, the growth rate posted 6.5% in 1Q08, following 5.4% in 4Q07. The

inverse relationship between the series and Office Machinery & Data Processing Equipment Industrial Production suggests the likelihood of moderately decelerating for Office Machinery & Data Processing Equipment through 2Q09.

Series DescriptionThe Real Value-Added Tax (VAT) Index is seasonally adjusted with a base of 100 in year 1995. IBGE publlishes the series quarterly. It measures the value-added taxes imposed on producers collected by the government. It is also recorded as a deductible in producers' prices resulting in negative impact on industrial production.

Brazil Real Value-Added Tax Index year-to-year growth is a strong negative indicator of year-to-year growth in Brazil Office Machinery & Data Processing Equipment Industrial Production. The relationship appears to be strongest when compared two to three quarters ahead.


Indicators that have shown a strong negative relationship to technology growth are also valuable to monitor

US Industrial Production Index Federal Reserve Bank, monthly, SA


Y/Y % Chg Y/Y % Chg

Brazil

IBGE, monthly, SA

Office Machinery & Data Processing Eqpt Ind Prod Index

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

-11%

-10%

-9%

-8%

-7%

-6%

-5%

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

2003 | Jan

2003 | Apr

2003 | Jul

2003 | Oct

2004 | Jan

2004 | Apr

2004 | Jul

2004 | Oct

2005 | Jan

2005 | Apr

2005 | Jul

2005 | Oct

2006 | Jan

2006 | Apr

2006 | Jul

2006 | Oct

2007 | Jan

2007 | Apr

2007 | Jul

2007 | Oct

2008 | Jan

2008 | Apr

2008 | Jul

2008 | Oct

2009 | Jan

2009 | Apr

2009 | Jul

2009 | Oct

Office Machinery & Data Processing Eqpt Ind Prod Index, Y/ Y % chgUS Industrial Production Index, Y/ Y % chg

US Industrial Production Index year-to-year growth is a strong positive indicator of year-to-year growth in Brazil Office Machinery & Data Processing Equipment. The relationship appears to be strongest when compared one to two quarters ahead.

The Y/Y growth of the US Industrial Production Index continued to show accelerating rates of decline in December 2008 and January 2009, falling -7.8% and -9.6%, respectively. The recent declines followed a drop of -5.5% in November. The recent growth trend of the US

Industrial Production Index suggests strongly decelerating growth for Brazil Office Machinery & Data Processing Equipment Industrial Production is likely thru 3Q09.

Series DescriptionIndustrial Production refers to the goods produced in mining (including oil extraction), manufacturing, and production of electricity, gas and water (ISIC Categories C, D, and E, Sectors 10 to 40). The series shown is published by the Federal Reserve Bank on a monthly basis and is seasonally adjusted.



Brazil Headlights: Predictive Model ForecastsOffice Machinery & Data Processing Equipment

-70%

-50%

-30%

-10%

10%

30%

50%

70%

2003

Q1

2003

Q3

2004

Q1

2004

Q3

2005

Q1

2005

Q3

2006

Q1

2006

Q3

2007

Q1

2007

Q3

2008

Q1

2008

Q3

2009

Q1

2009

Q3

2010

Q1

Brazil Office Machinery & Data Processing Equipment2003Q1-2010Q1

BR_IND_PRO_OFFICE_Y Pessimistic View Optimistic View

(Y/Y Growth)

EWS Market Alerts Country Dashboard: China High-Technology Product Exports

China Statistics Information Service Center, monthly


Y/Y % Chg Y/Y % Chg

China Customs Statistics, monthly, SA

ChinaHigh-Technology Product ExportsChina Wholesale & Retail Sales-Consumer Goods

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

-5%

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

06 | | | 07 | | | 08 | | | 09 | | |

High-Technology Product Exports Y/ Y % chgChina Wholesale& RetailSales-Consumer Goods, Y/ Y % chg

China Wholesale and Retail Sales-Consumer Goods year-to-year growth is a strong positive indicator of year-to-year growth in China High-Technology Product Exports. The relationship appears to be strongest when compared two quarters ahead.

The Y/Y growth of the Wholesale and Retail Sales of Consumer Goods in China plunged to -4.3% in January 2009, marking the fourth month of negative growth. Starting in the second half of 2008, the Y/Y growth of the indicator gradually decelerated, reporting Y/Y growth of 1.5% in July, 0.4% in August, and 0.3% in September. However, the growth rates fell into the

negative territory in October, when the index reported a slowdown in growth to -0.4%, and then in November the growth dropped again to -1.5%. The collective movements of the indicator suggest strongly decelerating growth for China High-Technology Product Exports thru the first half of 2009, at least.

Series DescriptionThe China Statistics Information and Service Center provides the Wholesale and Retail Sales-Consumer Goods index on a monthly basis. This index covers all Wholesale and Retail Sales of Consumer Goods, which are goods or services that are used without further transformation in production. The series is indexed at 100.

As far back as early in the second quarter of 2008 , this indicator foreshadowed that a significant slowdown in China High-Technology Product Exports was on the horizon


China Energy & Electricity ProductionOECD, monthly

Oct 2008 Nov 2008 IT Implication-3.0% -7.8%

Y/Y % Chg Y/Y % Chg

ChinaHigh-Technology Product Exports


-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

-10%

-5%

0%

5%

10%

15%

20%

25%

06 | | | 07 | | | 08 | | | 09 | | |

High-Technology Product Exports Y/ Y % chgChina Energy & Electricity Production, Y/ Y % chg

China Energy & Electricity Production is a strong positive indicator of year-to-year growth in China High-Technology Product Exports. The relationship appears to be strongest when compared two quarters ahead.

The growth of Energy & Electricity Production in China plunged to -7.8% in November 2008, following negative growth of -3.0% in October. The indicator reported a Y/Y growth rate of 8.1% in June and 9.6% in July earlier last year. However, the growth started to

decelerate to 5.7% in August, and then to 4.8% in September. The collective movements of the growth trend of this indicator suggest strongly decelerating growth for China High-Technology Product Exports thru the second quarter 0f 2009, at least.

Series DescriptionOECD publishes the Energy & Electricity Prodution series in total thousand Gigawatt hours (GWh) on a monthly basis.

This indicator foreshadowed that a significant slowdown in China High-Technology Product Exports was on the horizon in the second quarter of 2008


US Retail Sales excluding Autos & GasolineUS Census Bureau, monthly


Y/Y % Chg Y/Y % Chg


High-Technology Product ExportsChina

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

06 | | | 07 | | | 08 | | | 09 | | |

High-Technology Product Exports Y/ Y % chgUS RetailSales exc. Autos & Gas, Y/ Y % chg

US Retail Sales excluding Autos & Gas Index year-to-year growth is a strong positive indicator of year-to-year growth in China High-Technology Prodcuct Exports. The relationship appears to ibe strongest when compared one to two quarters ahead.

US Retail Sales excluding Autos & Gas exhibited a year-over-year growth rate of -1.4% in December 2008, following negative Y/Y growth of -0.4% in November. The series reached Y/Y growth of 3.8% in June, and it slid to 3.1% in July. The growth of the indicator continued to decelerate to 2.5% in

August, 1.7% in September and 0.5% in October. Combined with the recent drastic decline in the growth rates, the indicator is suggesting strongly decelerating for China High-Technology Product Exports thru the first half of 2009.

Series DescriptionRetail Sales, or sales of nondurable and durable goods consumer goods, are reported by the US Commerce Department's Bureau of the Census between the 11th and 15th of each month after being compiled based on surveys of a wide range of establishments across the country. The focus is on the Retail Sales & Food Services excluding Motor Vehicles & Parts Dealers and Gasoline Stations figure, as this series enables an assessment of the underlying spending habits of consumers by excluding the highly volatile automobile sales and gasoline price components.


China Headlights: Predictive Model ForecastsHigh-Technology Product Exports

EWS Market Alerts Country Dashboard: India Total Desktop PC Shipments

Reserve Bank of India, Monthly

Oct 2008 Nov 2008 IT Implication13.2% -0.9%

Y/Y % Chg Y/Y % Chg

IndiaTotal Desktop PC Shipments

MAIT, quarterlyIndia Aggregate Demand Deposits:Money and Banking Commercial Banks

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

55%

2002 | Dec

2003 | Mar

2003 | Jun

2003 | Sep

2003 | Dec

2004 | Mar

2004 | Jun

2004 | Sep

2004 | Dec

2005 | Mar

2005 | Jun

2005 | Sep

2005 | Dec

2006 | Mar

2006 | Jun

2006 | Sep

2006 | Dec

2007 | Mar

2007 | Jun

2007 | Sep

2007 | Dec

2008 | Mar

2008 | Jun

2008 | Sep

2008 | Dec

2009 | Mar

2009 | Jun

2009 | Sep

2009 | Dec

TotalDesktop PC Shipments, Y/ Y % chgIndia Aggregate Demand Deposits, Y/ Y % chg

India Aggregate Demand Deposits year-to-year growth is a moderate-to-strong positive indicator of year-to-year growth in India Total Desktop PC Shipments. The relationship appears to be strongest when compared two to three quarters ahead.

After the India Aggregate Demand Deposits year-to-year growth rate reached a record-high rate of 51.2% in January 2008, it has been exhibiting a decelerating trend due to the worsening global financial crisis. After decelerating to 13.2% in October 2008, the indicator recorded a negative growth rate of -0.9% in November 2008, the

lowest rate over the past ten years. The rapiddecline in the growth trend, and the recentnegative growth rate, are now suggesting strongly decelerating growth for India Total Desktop PC Shipments starting in 4Q08 and continuing into 3Q09.

Series DescriptionIndia Aggregate Demand Deposits of Money and Banking Commercial Banks is provided monthly by Reserve Bank of India. Since demand deposits constitute one of the most important segments of the nation's money supply, the financial community closely monitors their size.



US Profits from Current ProductionUS BEA, quarterly

3Q 2008 4Q 2008 IT Implication-9.2% -8.3%

Y/Y % Chg Y/Y % Chg

India

MAIT, quarterly

Total Desktop PC Shipments

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

2003 | Q1

2003 | Q2

2003 | Q3

2003 | Q4

2004 | Q1

2004 | Q2

2004 | Q3

2004 | Q4

2005 | Q1

2005 | Q2

2005 | Q3

2005 | Q4

2006 | Q1

2006 | Q2

2006 | Q3

2006 | Q4

2007 | Q1

2007 | Q2

2007 | Q3

2007 | Q4

2008 | Q1

2008 | Q2

2008 | Q3

2008 | Q4

2009 | Q1

2009 | Q2

2009 | Q3

2009 | Q4

TotalDesktop PC Shipments, Y/ Y % chgUS Profits from Current Production, Y/ Y % chg

US Profits from Current Production year-to-year growth is a moderate-to-strong positive indicator of year-to-year growth in India Total Desktop PC Shipments. The relationship appears to be strongest when compared two to three quarters ahead.

In the first quarter of 2007, US Corporate Profits year-to-year growth dropped sharply, and fell into negative territory to -1.0% from 6.9% in 4Q06, and has now exhibited negative growth for 8 consecutive quarters. In 2Q08, the indicator decelerated by 6.8 points from -1.5% in 1Q08 to -8.3%, followed by another deceleration to -9.2%

in 3Q08, which was the lowest rate since 2001 Q3. Although it slightly accelerated to -8.3% in 4Q08, the negative year-to-year growth rates and decelerating growth trend now suggest strongly decelerating growth for India Desktop PC Shipments starting in 1Q09 thru at least 3Q09.

Series DescriptionUS Profits from Current Production (called “Corporate Profits with IVA and CCAdj”) is provided by the US Bureau of Economic Analysis (BEA) on a quarterly basis. This indicator is a measure of income earned by corporations from current production before tax liability. Also, it excludes financing flows and capital gains and losses.

India Headlights: Predictive Model ForecastTotal Desktop PC Shipments

-15-10-505

1015202530354045(Y/Y % Growth) India Total Desktop PC Shipments

Headlights Forecast

MAIT_DT PC Predictive Model

EWS Market Alerts Country Dashboard: Russia Total Information & Communications Technology Spending

IFO World Economic Survey, quarterly

4Q 2008 1Q 2009 IT Implication2.60 2.10

INDEX LEVEL INDEX LEVEL

RussiaRussia Economic Situation Over Next 6 Months Index Total Information & Communications Technology

Spending WITSA , yearly

0%

5%

10%

15%

20%

25%

30%

35%

1

2

3

4

5

6

7

8

9

1997 | Q1

1997 | Q3

1998 | Q1

1998 | Q3

1999 | Q1

1999 | Q3

2000 | Q1

2000 | Q3

2001 | Q1

2001 | Q3

2002 | Q1

2002 | Q3

2003 | Q1

2003 | Q3

2004 | Q1

2004 | Q3

2005 | Q1

2005 | Q3

2006 | Q1

2006 | Q3

2007 | Q1

2007 | Q3

2008 | Q1

2008 | Q3

2009 | Q1

2009 | Q3

ICT SpendingY/ Y % chgRussia Economic Situation Over Next 6 Months, Index level Graphis scaled to reflect the Russian Rouble Crisis

The Russia Economi Situation Over the Next Six Months Index is a moderate-to-strong positive indicator of year-to-year growth in Russia Total ICT spending. The relationship appears to ibe strongest when compared unlagged or six months ahead.

The IFO World Economic Survey's Index of the Economic Situation Over the Next Six Months in Russia has been in steady decline since 3Q07. Over the last two quarters the index has plummeted to the lowest levels observed since the economic meltdown following the collapse of the communist system in the early 1990's. In the first quarter of 2009 the index declined to reach a level of 2.10, after falling

precipitously to 2.60 in 4Q08 from a value of 5.6 in 3Q08. By contrast, the lowest level reached during the Rouble crisis in 1998 was 2.30. The severity of the downward trajectory points toward strongly decelerating IT growth, which is likely to continue thru most of 2009.

Series DescriptionThe German based Instiut Fuer Wirtschaftsforschung (IFO) provides a quarterly index score based on a survey for economic expectations over the next six months. The survey is administered to 1000 econmists from international and national organizations worldwide on current economic developments in their respective countries. For this index surveys pretaining to Russia are included. The index is based on a 9 point scale where a range of 5 to 9 points indicated a positive economic outlook, and a score of 1 to 5 indicate a negative trend.


For Russia, EMU and Euro Area series are often better indicators of technology market growth than country-specific ones

EMU, Total Retail Trade VolumeEuroStat, monthly


Y/Y % Chg Y/Y % Chg

Russia

WITSA , yearly

Total Information & Communications Technology Spending

0%

5%

10%

15%

20%

25%

30%

35%

-3%

-2%

-1%

0%

1%

2%

3%

4%

1998 | Jan

1998 |

Apr

1998 | Jul

1998 |

Oct

1999 | Jan

1999 |

Apr

1999 | Jul

1999 |

Oct

2000 | Jan

2000 |

Apr

2000 | Jul

2000 |

Oct

2001 | Jan

2001 |

Apr

2001 | Jul

2001 |

Oct

2002 | Jan

2002 |

Apr

2002 | Jul

2002 |

Oct

2003 | Jan

2003 |

Apr

2003 | Jul

2003 |

Oct

2004 | Jan

2004 |

Apr

2004 | Jul

2004 |

Oct

2005 | Jan

2005 |

Apr

2005 | Jul

2005 |

Oct

2006 | Jan

2006 |

Apr

2006 | Jul

2006 |

Oct

2007 | Jan

2007 |

Apr

2007 | Jul

2007 |

Oct

2008 | Jan

2008 |

Apr

2008 | Jul

2008 |

Oct

2009 | Jan

2009 |

Apr

ICT Spending Y/ Y % chgEMU TotalRetail Trade Volume, Y/ Y % chg 3MMA Graphis scaled to reflect the Russian Rouble Crisis

EMU Total Retail Trade Volume year-to-year growth is a strong positive indicator of year-to-year growth in RussiaInformation & Communications Technology Spending.

The 3MMA rate of the annual growth of Retail Trade in the European Monetary Union has been in almost uninterrupted decline since 3Q07. The negative growth territory was reached at the start of 2008 and the latest numbers are the lowest level observed in the last ten years. This well-pronounced steep

negative growth trajectory points toward strongly decelerating Total ICT Spending in Russia, which will likely continue through the end of 2009.

Series DescriptionThis EuroStat series measures the total retail trade by volume for European Monetary Union (EMU) countries. The series is seasonally adjusted, and available monthly.

Russia Headlights: Predictive Model ForecastsTotal Information & Communications Technology Spending

-10

-5

0

5

10

15

20

25

30

35

2002 2003 2004 2005 2006 2007 2008 2009 2010

(Y/Y % Growth)

Russia - Total ICT Spending2002-2010

WITSA TOTAL ICT MODEL 1 MODEL 2

Appendices

• Supplemental Market Characteristics

• Supplemental EWS Dashboards

Employment Mix by Industry (2008)

47%

31%25% 22% 22%

18% 17% 16%9%

10%12%

15%

19%

14% 18% 20%

17%13%

6%

10%

5%

5% 5%7%

12%

9% 8% 21%

22%

22%28% 18%

18%

21%

19% 24%

5%

7%

6%10%

8%

8%9%

4%

7%15%

10%9%

10%16%

16%

18%

7% 9% 7%12% 11% 10% 14% 17% 17%

32%

17%

59% 55%

7%

5%5%

4% 4%

3%

17%

5%

9%

4%3%

3%

India China Thailand Turkey Brazil Mexico Poland Russia Argentina SaudiArabia

U.S.Source: IPR Worldwide Economics/Demographics Database

Ag / Mining /Construction

Manufacturing

Transportation /Comm / Utilities

Wholesale /Retail Trade

Fin / Real Est / Ins / Bus Svcs

Personal / Social Svcs

Gov / Ed

499M 777M 37M 24M 90M 44M 15M 70M 15M 7M 154M Employment

Business Employment by Enterprise Size (2008)

81% 80% 78% 75% 75% 73%63%

54%

39%

7% 7%11% 11% 13% 15% 14% 15%

23%

21%

19%

5% 6% 8% 9% 10% 10% 12% 12% 14%24%

43%

87%88%

India China Brazil Turkey Mexico Thailand SaudiArabia

Argentina Poland Russia U.S.

Source: IPR Worldwide Economics/Demographics Database

1-99

100-999

1000+

21% 24% 41% 34% 34% 24% 42% 42% 44% 42% 60% % White Collar

FX Trends: U.S. Dollars per Currency UnitChange from August 2008 to February 2009 – Monthly Averages

-4%

-13% -13%

-29%-30% -30%

-32%

-40%-40%

-30%

-20%

-10%

0%China

SaudiArabia Thailand Argentina India Turkey Brazil Mexico Russia Poland

Source: oanda.com


Japan Composite Leading IndicatorOECD, monthly


Y/Y % Chg Y/Y % Chg

ChinaHigh-Technology Product Exports


-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

06 | | | 07 | | | 08 | | | 09 | | |

High-Technology Product ExportsY/ Y % chgJapanComposite Leading Indicator, Y/ Y % chg

The Japan Composite Leading Indicator exhibited -6.9% Y/Y growth in December, following -5.2% in November. The growth rate of the indicator has been in negative territory for 20 months starting with May 2007. Earlier this year, the growth rate was -0.9% in June and July, and dropped to -1.3% in August. The deceleration

continued and the growth rate slowed further down to -2.2% in September while it was -3.6% in October. The collective movements and the prolonged months of negative growth suggest strongly decelerating growth of China High-Technology Product Exports through at least the second quarter of 2009,.

Series DescriptionComposite Leading Indicators (CLIs) are designed to predict cyclical turning points in aggregate economic activity. The OECD publishes CLIs monthly and they are comprised of a set of component series from a wide range of economic indicators.

Japan Composite Leading Indicator year-to-year growth is a moderate positive indicator of year-to-year growth in China High-Technology Product Exports. The relationship appears to be strongest when compared two quarters ahead.


India International Liquidity IMF International Financial Statistics, monthly


Y/Y % Chg Y/Y % Chg

IndiaTotal Desktop PC Shipments

MAIT, quarterly

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

-10%

0%

10%

20%

30%

40%

50%

60%

2002 | Dec

2003 | Mar

2003 | Jun

2003 | Sep

2003 | Dec

2004 | Mar

2004 | Jun

2004 | Sep

2004 | Dec

2005 | Mar

2005 | Jun

2005 | Sep

2005 | Dec

2006 | Mar

2006 | Jun

2006 | Sep

2006 | Dec

2007 | Mar

2007 | Jun

2007 | Sep

2007 | Dec

2008 | Mar

2008 | Jun

2008 | Sep

2008 | Dec

2009 | Mar

2009 | Jun

2009 | Sep

2009 | Dec

TotalDesktop PC Shipments, Y/ Y % chgIndia International Liquidity, Y/ Y % chg

India International Liquidity year-to-year growth is a moderate-to-strong positive indicator of year-to-year growth in India Total Desktop PC Shipments. The relationship appears to be strongest when compared two quarters ahead.

Since April 2008, the India International Liquidity year-to-year growth rate has been declining, initially from 44.8% to 26.0% in August 2008. After a consecutive four-month deceleration, it dropped sharply by 10.5 points to 15.5% in September 2008, and again by 15 points to 0.5% in October 2008. Thereafter, in November 2008, the growth rate decelerated into negative

territory -3.4%, which is the lowest rate since August 1998. The rapid decline in the growth trend, and the recent negative growth rate, are now suggesting strongly decelerating growth for India Total Desktop PC Shipments starting in 4Q08 thru at least 2Q09.

Series DescriptionIndia International Liquidity is provided monthly by the International Monetary Fund (IMF). After Breton Woods and the advent of the dollar-gold exchange standard, liquidity came to mean access to dollars, either held as reserves or as credit lines, or the SDR system maintained by the International Monetary Fund.


IMF, monthly

Oct 2008 Nov 2008 IT Implication14.3% 4.6%

Y/Y % Chg Y/Y % Chg

Russia Total Information & Communications Technology

Spending WITSA , yearly

Russia International Liquidity, Excluding Gold

0%

5%

10%

15%

20%

25%

30%

35%

40%

-60%

-40%

-20%

0%

20%

40%

60%

80%

1998 | Jan

1998 | Jun

1998 | Nov

1999 | Apr

1999 | Sep

2000 | Feb

2000 | Jul

2000 | Dec

2001 | May

2001 | Oct

2002 | Mar

2002 | Aug

2003 | Jan

2003 | Jun

2003 | Nov

2004 | Apr

2004 | Sep

2005 | Feb

2005 | Jul

2005 | Dec

2006 | May

2006 | Oct

2007 | Mar

2007 | Aug

2008 | Jan

2008 | Jun

2008 | Nov

2009 | Apr

ICT Spending Y/ Y % chgRussia International Liquidity, Y/ Y % chg

Russia International Liquidity year-to-year growth is a strong positive indicator of year-to-year growth in RussiaInformation & Communications Technology Spending.

The Y/Y growth in International Lquidity has been in general decline in Russia since mid 2006. While the decline has not been as pronounced as other indicators it is significant as the rate of growth has slowed to its lowest rate since the end of the Russian Rouble crisis. The future growth of Internatioinal

Liquidity will depend in large part on a healthly demand for oil. As a result of the global financial crisis, and the deceleration in the world economy, International Liquidity is likely to worsen through 2009 suggesting strongly decelerating growth for Russia ICT Spending in 2009.

Series DescriptionThe IMF Intrenational Financial Statistic series measures total foreign reserves excluding gold in Russia on on monthly basis in the IMF measure of SDRS., which represents a basket of currencies including the dollar, Japanese yen, the sterling pound, and the Euro.

Graphis scaled to reflect the Russian Rouble Crisis


Euro Area ExportsEuroStat, monthly


Y/Y % Chg Y/Y % Chg

Russia

WITSA , yearly

Total Information & Communications Technology Spending

0%

5%

10%

15%

20%

25%

30%

35%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

2000 | Jan

2000 | Jul

2001 | Jan

2001 | Jul

2002 | Jan

2002 | Jul

2003 | Jan

2003 | Jul

2004 | Jan

2004 | Jul

2005 | Jan

2005 | Jul

2006 | Jan

2006 | Jul

2007 | Jan

2007 | Jul

2008 | Jan

2008 | Jul

2009 | Jan

2009 | Jul

ICT Spending Y/ Y % chgEuro AreaExports, Y/ Y % chg 3MMA

EuroArea exports year-to-year growth is a moderate-to-strong positive indicator of year-to-year growth in RussiaInformation & Communications Technology spending.

The year-to-year growth of Euro Area Exports has been in general decline since 2006. Though the negative trend has been interrupted by short-term upward corrections on a couple of occasions during that period, the 3MMA rate of growth has decelerated from the peak of 12.2% recorded in 4Q06 down to -0.7% in November 2008. This general downward trajectory ,and especially the

dramatic deceleration to negtive growth of -6.6% in the month of November, suggests the build-up of negative pressures for IT growth in Russia. Thisdeccelerations is likely to worsen through 2009 given the economic outlook for the Euro Area countries, suggesting strongly decelerating growth for Russia ICT Spending for most of 2009.

Series DescriptionThis Eurostat monthly series measures the seasonally adjusted Exports from Euro Area (EA13) countries to non EA13 countries in millions of Euros. The Euro Area (EA12) consists of 12 Member States up to 31 December 2006: Belgium, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal and Finland. From 1 January 2007 the euro area (EA13) also includes Slovenia.

For Russia, EMU and Euro Area series are often better indicators of technology market growth than country-specific ones

laying the groundwork: an emerging markets overview

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