We are in a super-cycle, again
Section 1: Current Situation
The world is growingNominal world GDP since 1990USD billions                                                     World GDP...
The world is growing (2)Nominal world GDP since 1990                         World nominal GDP current cycleUSD trn       ...
State, 201070% of global growth this year is coming from EMs(% of world total)                                      US    ...
Asian trade has already recovered past pre-recession peak….Export volumes(indexed to pre-crisis peak, April 2008)         ...
Appreciating currenciesStrong appreciations: Thai baht, Indonesian rupiah, Brazilian real, South African rand             ...
Section 2: The super-cycle
The third super-cycleReal world GDP growth since 1820%                     Actual world GDP growth                        ...
The shift in the balance of powerNominal GDP 2010, USD 62trn                        Nominal GDP 2030, USD 308trn% of globa...
The New World Order        1990    USD trn    2000     USD trn    2010     USD trn     2020       USD trn      2030       ...
The world is more open than ever…Export to GDP ratio%     35     30     25     20 %     15     10      5      0          1...
….and South-South trade likely to continue boomingMajor trade corridors 2009 - 2030                                       ...
World population is growing…..Population in 2009 and prediction for 2030                                             Sourc...
….and moving to cities…..Urbanisation in 2010 and prediction for 2030                                               Source...
….and getting richerReal GDP/capita 2000 – 2030 at market exchange ratesUSD                                               ...
Middle class now and in 2030Size of the middle class in 2009 and prediction for 2030                                      ...
A Chinese luxury wedding                           Source: OMG 19
Creativity is keyDistribution of tertiary educated population             Number of patents filed by countryby 2030 (%)   ...
InnovationInnovation clusters momentum and diversity between 1997 to 2006                                                 ...
What does the world want?
What does the world want next?     Spending habits at different per-capita income levels                             35,00...
Commodities: Winners and Losers                                                                                           ...
Commodities: Winners and Losers                                                                                           ...
Commodities: Winners and Losers                                                    Wheat harvests likely to               ...
Where next to invest?Global equity-market capitalisation, 2009                                         Global equity-marke...
Section 4: Risks
Known unknowns - policy mistakes in the west                                       Financial Markets Symposium Dinner - 21...
Known unknowns – political instability                   70                             Population (m illion)             ...
Known unknowns - the environment                           Physical Water Scarcity   Little or No Water Scarcity          ...
Global Disclaimer (page 1 of 2)                                                                  SCB is not a legal or tax...
REMEMBER TO UPDATE APPROVER/RELEASE TIME…Global Disclaimer (page 2 of 2)                                                  ...
Standard Chartered Bank BeyondBRIC
Upcoming SlideShare
Loading in...5
×

Standard Chartered Bank BeyondBRIC

1,510

Published on

Published in: Economy & Finance, Business
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
1,510
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
110
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

Standard Chartered Bank BeyondBRIC

  1. 1. We are in a super-cycle, again
  2. 2. Section 1: Current Situation
  3. 3. The world is growingNominal world GDP since 1990USD billions World GDP (Nominal) 308,285300,000260,000220,000180,000 133,676140,000100,000 62,346 60,000 32,061 22,856 20,000 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 Sources: IMF, Standard Chartered Research 4
  4. 4. The world is growing (2)Nominal world GDP since 1990 World nominal GDP current cycleUSD trn USd trn World nominal GDP World nominal GDP (USD trn)65 70 64.7 61.160 60 57.755 505045 40 32.140 3035 2030 102520 0 1990 1995 2000 2005 2010 2000 2008 2009 2011 Sources: IMF, Standard Chartered Research 5
  5. 5. State, 201070% of global growth this year is coming from EMs(% of world total) US EU 18% 8% Japan 4% CIS RoW 4% 7% Latam 11% MENA 4% Africa 2% Asia 42% Sources: IMF, Standard Chartered Research 6
  6. 6. Asian trade has already recovered past pre-recession peak….Export volumes(indexed to pre-crisis peak, April 2008) World exports Asian exports Advanced economies exports 120 110 Indexed, April 2008 = 100 100 90 80 70 Apr-08 Jun-08 Aug-08 Oct-08 Dec-08 Feb-09 Apr-09 Jun-09 Aug-09 Oct-09 Dec-09 Feb-10 Apr-10 Jun-10 Jul-10 Sources: IMF, Standard Chartered Research 7
  7. 7. Appreciating currenciesStrong appreciations: Thai baht, Indonesian rupiah, Brazilian real, South African rand THB IDR BRL ZAR 115 105 95 Sep-09 Oct-09 Nov-09 Jan-10 Feb-10 Apr-10 May-10 Jul-10 Aug-10 Sep-10 Sources: Bloomberg, Standard Chartered Research 8
  8. 8. Section 2: The super-cycle
  9. 9. The third super-cycleReal world GDP growth since 1820% Actual world GDP growth Average world GDP growth 10% 1946-1973: 5.0% 8% 6% 1870-1913: 2.7% 2000-2030: 3.6% 4% 1820-1870: 1.7% 2% 0% 1973-1999: 2.8% -2% -4% 1913-1946: 1.7% -6% -8%-10% 1820 1840 1860 1880 1900 1920 1940 1960 1980 2000 2020 Sources: Maddison, IMF, Standard Chartered Research 10
  10. 10. The shift in the balance of powerNominal GDP 2010, USD 62trn Nominal GDP 2030, USD 308trn% of global % of global ROW China Japan ROW 6% 10% 3% 5% Japan India 10% 3% China Asia ex CIJ EU-27 23% 6% 14% SSA 2% MENA 3% Latam US EU-27 6% 12% India 27% CIS 10% 3% CIS 5% Asia ex CIJ 8% US Latam SSA 24% 9% MENA 5% 6% Sources: IMF, Standard Chartered Research 11
  11. 11. The New World Order 1990 USD trn 2000 USD trn 2010 USD trn 2020 USD trn 2030 USD trn 1 US 5.8 US 10.0 US 14.6 China 24.6 China 73.5 2 Japan 3.0 Japan 4.7 China 5.9 US 23.3 US 38.2 3 Germany 1.5 Germany 1.9 Japan 5.6 India 9.6 India 30.3 4 France 1.2 UK 1.5 Germany 3.3 Japan 6.0 Brazil 12.2 5 Italy 1.1 France 1.3 France 2.6 Brazil 5.1 Indonesia 9.3 6 UK 1.0 China 1.2 UK 2.3 Germany 5.0 Japan 8.4 7 Canada 0.6 Italy 1.1 Italy 2.0 France 3.9 Germany 8.2 8 Spain 0.5 Canada 0.7 Brazil 2.0 Russia 3.5 Mexico 6.6 9 Brazil 0.5 Brazil 0.6 Canada 1.6 UK 3.4 France 6.4 10 China 0.4 Mexico 0.6 Russia 1.5 Indonesia 3.2 UK 5.6 Source: Standard Chartered Research
  12. 12. The world is more open than ever…Export to GDP ratio% 35 30 25 20 % 15 10 5 0 1820 1870 1913 1929 1950 1962 1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2030 Sources: Madisson, IMF WEO, Standard Chartered Research 13
  13. 13. ….and South-South trade likely to continue boomingMajor trade corridors 2009 - 2030 EU-27 United States China MENA India Asia ex CIJ LATAM Sub-Saharan Africa USD trn 6 13 0 2008 2030 Sources: Madisson, IMF WEO, Standard Chartered Research 14
  14. 14. World population is growing…..Population in 2009 and prediction for 2030 Sources: UN, Standard Chartered Research 15
  15. 15. ….and moving to cities…..Urbanisation in 2010 and prediction for 2030 Sources: UN, Standard Chartered Research 16
  16. 16. ….and getting richerReal GDP/capita 2000 – 2030 at market exchange ratesUSD Sources: OECD, Standard Chartered Research 17
  17. 17. Middle class now and in 2030Size of the middle class in 2009 and prediction for 2030 Sources: Mckinsey, World Economic Forum 18
  18. 18. A Chinese luxury wedding Source: OMG 19
  19. 19. Creativity is keyDistribution of tertiary educated population Number of patents filed by countryby 2030 (%) Japan US Europe (incl UK) Latam China South Korea India 9% 16% 600,000 Africa 7% 500,000 China 400,000 13% Developed economies 13% 300,000 United 200,000 States EM Europe 9% + ME 100,000 Japan 10% 5% EM Asia 0 18% 1995 1997 1999 2001 2003 2005 2007 Sources: WDI, WIPO, Standard Chartered Research 20
  20. 20. InnovationInnovation clusters momentum and diversity between 1997 to 2006 Sources: UN, Standard Chartered Research 21
  21. 21. What does the world want?
  22. 22. What does the world want next? Spending habits at different per-capita income levels 35,000 30,000 25,000 Per capita income 20,000 15,000 10,000 5,000 0 TV Motor-cycle Cell phone Car Tourism University Financial education services Source: IAFM (International Academy of Financial Management)
  23. 23. Commodities: Winners and Losers Norway Net oil exporter with sizeable reserves Net oil exporter Relies heavily on coal & oil Russia & CIS imports, despite significant investment in nuclear and Currently largest oil producer. Holds renewable energy Expected to remain net importer of coal and oil 9.2% of global oil reserves and 19% of Canada global coal reserves. Well placed to Holds 14% global coal reserves, but export to both China and Europe imports are preserving future domestic EU-27 supply. Fourth-largest crude oil producer, but imports 55% of oil needs. Holds 7% of global coal Investment in nuclear and renewables reserves but infrastructure United States is curbing future needs, but likely to must improve to reduce remain dependent on fossil fuels dependence on imports. Holds 30% of global coal High dependency on crude reserves. Third-largest oil producer, but dependent on Holds 60% of global oil imports China Japan imports for over 60% of proven oil reserves, MENA equivalent to 78 years of crude oil demand India current production Rest of Asia (ex Japan) Sub-Saharan Africa Vietnam and Indonesia Net oil-exporting region. Brazil is South Africa a large exporter of coal. dominate thermal coal one of the most prospective non- Region expected to remain a net oil export market, although OPEC countries and on the cusp exporter domestic demand growth is LATAM likely to limit Indonesia’s Australia of becoming a significant net crude oil exporter. Region holds exportable surplus 9% of global coal reserves 2% of global coal reserves – Colombia is key exporter ▼Coal ▼Oil ▼Oil ▲Coal ▼Oil ▲Coal ▲Oil ▲Coal ▲Oil Source: Standard Chartered Research
  24. 24. Commodities: Winners and Losers Large metal consumer. Limited domestic mine Will need to import raw production exposes it to high materials to feed strong Russia & CIS prices domestic demand for base metals Kazakhstan produces an excess of copper. Ample reserves China has a structural deficit EU-27 in copper with local reserves being poor quality. Strong Copper deficit demand will make it reliant on imports United States China Japan* MENA India Rest of Asia (ex Japan) Sub-Saharan India is a large consumer of Africa metals due to a rapid expansion Chile and Peru are dominant in manufacturing. Relies heavily producers of copper, and low on imported copper raw Zambia is currently the dominant copper consumption levels allow them LATAM producer, with the DRC another potentially materials to be major winners in a super- important supplier. Timely mine development cycle. While some mines are will be required to allow the region to benefit reaching end of natural life, the from the super-cycle Australia region will continue to be a dominant supplier ▼Copper ▲Copper No effect Source: Standard Chartered Research
  25. 25. Commodities: Winners and Losers Wheat harvests likely to increase, albeit moderately, from Despite persistent weather current production. Exports of shocks can increase acreage Japan continues to wheat will remain strong over and FAO forecasts Russia alone register a sizeable long term, particularly to MENA accounts for 9% of global wheat net trade deficit for Currently top exporter of importers. Region likely to suffer output over next 10 years Imports 30% of all cotton. wheat and coarse wheat and cotton and from higher textile prices as compared with 7% now Structural deficit in cotton will grains. Current will remain an cotton prices rise worsen given that per-capita wheat output covers established and cost- consumption outpaces per- less than 15% of effective exporter of Russia & CIS capita output. Meanwhile, a consumption both commodities drop in per-capita globally, despite some EU-27 consumption of wheat vs. a loss of market share rise in per-capita output will boost exportable surpluses United States Wheat consumption far outstrips output in the China Japan MENA region; deep deficits are likely to remain in place MENA long-term given that region India Rest of Asia (ex-Japan) also has a water deficit Potential to increase wheat Global acreage domination with acreage and output by up to 5mt Sub-Saharan cotton. Cotton output has by 2020. However, output is Africa increased around 10% over the vulnerable to weather shocks last 10 years, compared with the LATAM A large net importer. Current global average of 1%. Significant wheat output covers only 30% of upside potential exists on the current consumption and is likely back of better farming to stagnate at this level over the techniques. Proximity to China forecast period in the absence of will boost overall market share. Australia significant investment in Population growth to pressure agriculture wheat balances into a deficit by 2018 ▼Wheat ▲Wheat ▼Wheat ▲Wheat ▼Wheat ▲Wheat No effect ▼Cotton ▼Cotton ▲Cotton ▲Cotton Source: Standard Chartered Research
  26. 26. Where next to invest?Global equity-market capitalisation, 2009 Global equity-market capitalisation, 2030USD trn, % of USD 45.4trn total USD trn, % of USD 322.1trn total China , 79.8, ROW , 85.7, 25% China , 3.3, 7% India , 1.3, 3% ROW , 8, 18% 26% Asia ex CIJ , 4.5, 10% Japan , 3.5, 8% Japan , 6, 2% India , 27.8, 9% EU-27 , 34.6, 11% EU-27 , 10.1, 23% US , 13.7, 31% Asia ex CIJ , US , 45.7, 14% 42.5, 13% Sources: IMF, Standard Chartered Research Source: Standard Chartered Research
  27. 27. Section 4: Risks
  28. 28. Known unknowns - policy mistakes in the west Financial Markets Symposium Dinner - 21st September 2010 29
  29. 29. Known unknowns – political instability 70 Population (m illion) 60 50 40 30 20 10 0 Yemen Financial Markets Symposium Dinner - 21st September 2010 30
  30. 30. Known unknowns - the environment Physical Water Scarcity Little or No Water Scarcity Economic Water Scarcity Not Estimated Sources: International Water Management Institute 31
  31. 31. Global Disclaimer (page 1 of 2) SCB is not a legal or tax adviser, and is not purporting to provide legal or tax advice. Independent legal and/or tax advice should be sought for any queries relating to the legalAnalyst Certification Disclosure: or tax implications of any investment.The research analyst or analysts responsible for the content of this research report certify SCB, and/or a connected company, may have a position in any of the instruments orthat: (1) the views expressed and attributed to the research analyst or analysts in the currencies mentioned in this document. SCB and/or a connected company may at anyresearch report accurately reflect their personal opinion(s) about the subject securities and time, to the extent permitted by applicable law and/or regulation, be long or short anyissuers and/or other subject matter as appropriate; and, (2) no part of his or her securities or financial instruments referred to in this document or have a material interestcompensation was, is or will be directly or indirectly related to the specific recommendations in any such securities or related investment, or may be the only market maker in relationor views contained in this research report. On a general basis, the efficacy of to such investments, or provide, or have provided advice, investment banking or otherrecommendations is a factor in the performance appraisals of analysts. services, to issuers of such investments.Global Disclaimer: SCB has in place policies and procedures and physical information walls between itsStandard Chartered Bank and or its affiliates ("SCB”) makes no representation or warranty of Research Department and differing public and private business functions to help ensureany kind, express, implied or statutory regarding this document or any information contained confidential information, including ‘inside’ information is not publicly disclosed unless inor referred to on the document. line with its policies and procedures and the rules of its regulators.The information in this document is provided for information purposes only. It does not You are advised to make your own independent judgment with respect to any matterconstitute any offer, recommendation or solicitation to any person to enter into any contained herein.transaction or adopt any hedging, trading or investment strategy, nor does it constitute any SCB accepts no liability and will not be liable for any loss or damage arising directly orprediction of likely future movements in rates or prices, or represent that any such future indirectly (including special, incidental or consequential loss or damage) from your use ofmovements will not exceed those shown in any illustration. Users of this document should this document, howsoever arising, and including any loss, damage or expense arisingseek advice regarding the appropriateness of investing in any securities, financial from, but not limited to, any defect, error, imperfection, fault, mistake or inaccuracy withinstruments or investment strategies referred to on this document and should understand this document, its contents or associated services, or due to any unavailability of thethat statements regarding future prospects may not be realised. Opinions, projections and document or any part thereof or any contents or associated services.estimates are subject to change without notice.The value and income of any of the securities or financial instruments mentioned in thisdocument can fall as well as rise and an investor may get back less than invested. Foreign-currency denominated securities and financial instruments are subject to fluctuation inexchange rates that could have a positive or adverse effect on the value, price or income ofsuch securities and financial instruments. Past performance is not indicative of comparablefuture results and no representation or warranty is made regarding future performance.
  32. 32. REMEMBER TO UPDATE APPROVER/RELEASE TIME…Global Disclaimer (page 2 of 2) United States: Except for any documents relating to foreign exchange, FX or global FX, Rates or Commodities, distribution of this document in the United States or to USIf you are receiving this document in any of the countries listed below, please note the persons is intended to be solely to major institutional investors as defined in Rule 15a-following: 6(a)(2) under the US Securities Act of 1934. All US persons that receive this document byUnited Kingdom: SCB is authorised and regulated in the United Kingdom by the Financial their acceptance thereof represent and agree that they are a major institutional investor andServices Authority (FSA). This communication is not directed at Retail Clients in the understand the risks involved in executing transactions in securities. Any US recipient of thisEuropean Economic Area as defined by Directive 2004/39/EC. Nothing in this document document wanting additional information or to effect any transaction in any security orconstitutes a personal recommendation or investment advice as defined by Directive financial instrument mentioned herein, must do so by contacting a registered representative2004/39/EC. Australia: The Australian Financial Services License for SCB is License No: of Standard Chartered Securities (North America) Inc., 1 Madison Avenue, New York, N.Y.246833 with the following Australian Registered Business Number (ARBN: 097571778). 10010, US, tel + 1 212 667 0700. WE DO NOT OFFER OR SELL SECURITIES TO U.S.Australian investors should note that this document was prepared for wholesale investors PERSONS UNLESS EITHER (A) THOSE SECURITIES ARE REGISTERED FOR SALEonly (as defined by Australian Corporations legislation). China: This document is being WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AND WITH ALLdistributed in China by, and is attributable to, Standard Chartered Bank (China) Limited APPROPRIATE U.S. STATE AUTHORITIES; OR (B) THE SECURITIES OR THEwhich is mainly regulated by China Banking Regulatory Commission (CBRC), State SPECIFIC TRANSACTION QUALIFY FOR AN EXEMPTION UNDER THE U.S. FEDERALAdministration of Foreign Exchange (SAFE), and People’s Bank of China (PBoC). Hong AND STATE SECURITIES LAWS NOR DO WE OFFER OR SELL SECURITIES TO U.S.Kong: This document is being distributed in Hong Kong by, and is attributable to, Standard PERSONS UNLESS (i) WE, OUR AFFILIATED COMPANY AND THE APPROPRIATEChartered Bank (Hong Kong) Limited which is regulated by the Hong Kong Monetary PERSONNEL ARE PROPERLY REGISTERED OR LICENSED TO CONDUCT BUSINESS;Authority. Japan: This document is being distributed to Specified Investors, as defined by the OR (ii) WE, OUR AFFILIATED COMPANY AND THE APPROPRIATE PERSONNELFinancial Instruments and Exchange Law of Japan (FIEL), for information only and not for QUALIFY FOR EXEMPTIONS UNDER APPLICABLE U.S. FEDERAL AND STATE LAWS.the purpose of soliciting any Financial Instruments Transactions as defined by the FIEL or Copyright: Standard Chartered Bank 2010. Copyright in all materials, text, articles andany Specified Deposits, etc. as defined by the Banking Law of Japan. Singapore: This information contained herein is the property of, and may only be reproduced with permissiondocument is being distributed in Singapore by SCB Singapore branch, only to accredited of an authorised signatory of, Standard Chartered Bank. Copyright in materials created byinvestors, expert investors or institutional investors, as defined in the Securities and Futures third parties and the rights under copyright of such parties are hereby acknowledged.Act, Chapter 289 of Singapore. Recipients in Singapore should contact SCB Singapore Copyright in all other materials not belonging to third parties and copyright in these materialsbranch in relation to any matters arising from, or in connection with, this document. South as a compilation vests and shall remain at all times copyright of Standard Chartered BankAfrica: SCB is licensed as a Financial Services Provider in terms of Section 8 of the and should not be reproduced or used except for business purposes on behalf of StandardFinancial Advisory and Intermediary Services Act 37 of 2002. SCB is a Registered Credit Chartered Bank or save with the express prior written consent of an authorised signatory ofprovider in terms of the National Credit Act 34 of 2005 under registration number NCRCP4. Standard Chartered Bank. All rights reserved. © Standard Chartered Bank 2010.UAE (DIFC): SCB is regulated in the Dubai International Financial Centre by the DubaiFinancial Services Authority. This document is intended for use only by Professional Clients Data available as of XX November 2010. This document is released on xx November 2010and should not be relied upon by or be distributed to Retail Clients. Document approved by: Name, Designation
  1. A particular slide catching your eye?

    Clipping is a handy way to collect important slides you want to go back to later.

×