How Exciting is Africa's Potential? Goldman Sachs Asset Management

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How Exciting is Africa's Potential? Goldman Sachs Asset Management

  1. 1. How Exciting is Africa’s Potential? Anna Stupnytska Executive Director Goldman Sachs Asset ManagementThis information discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions and should not be construed as research or March 2011investment advice. Please see additional disclosures. Any reference to a specific company or security does not constitute a recommendation to buy, sell, hold or directly invest in the companyor its securities. 1
  2. 2. Top Contributors to Global GDP from 2010 to 2019 10,000 2010 US$ bn 9,000 Change in US$ size of GDP from 2010 to 2019 ** 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 **GDP projections have been re-based from 2007 to 2010 to incorporate recent data. Growth and currency appreciation paths from 2011 to 2050 are kept the same Source: GS Global ECS Research. GSAM CalculationsThis information discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions and should not be construed as research or investment advice. Please see additional disclosures.Any reference to a specific company or security does not constitute a recommendation to buy, sell, hold or directly invest in the company or its securities. 2
  3. 3. Country Groupings BRICs N-11 African 11 Brazil Bangladesh Congo, DR China Egypt Egypt India Indonesia Ethiopia Russia Iran Kenya Korea Morocco Mexico Nigeria Nigeria South Africa Pakistan Sudan Philippines Tanzania Turkey Uganda Vietnam Zimbabwe Source: GS Global ECS ResearchThis information discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions and should not be construed as research or investment advice. Please see additional disclosures.Any reference to a specific company or security does not constitute a recommendation to buy, sell, hold or directly invest in the company or its securities. 3
  4. 4. World in 2010 16,000 US$ bn 14,000 2010 GDP in current US$ 12,000 10,000 8,000 6,000 4,000 2,000 0 Source: IMF, GS Global ECS ResearchThis information discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions and should not be construed as research or investment advice. Please see additional disclosures.Any reference to a specific company or security does not constitute a recommendation to buy, sell, hold or directly invest in the company or its securities. 4
  5. 5. African 11 in 2010 350 US$bn 300 2010 GDP in current US$ 250 200 150 100 50 0 Source: IMFThis information discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions and should not be construed as research or investment advice. Please see additional disclosures.Any reference to a specific company or security does not constitute a recommendation to buy, sell, hold or directly invest in the company or its securities. 5
  6. 6. World in 2050 100,000 2010 US$ bn * 90,000 80,000 70,000 In 2050 the BRICs and N11 will dominate 60,000 50,000 40,000 30,000 20,000 10,000 0 *GDP projections have been re-based from 2007 to 2010 to incorporate recent data. Growth and currency appreciation paths from 2011 to 2050 are kept the same Source: GS Global ECS Research. GSAM CalculationsThis information discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions and should not be construed as research or investment advice. Please see additional disclosures.Any reference to a specific company or security does not constitute a recommendation to buy, sell, hold or directly invest in the company or its securities. 6
  7. 7. African 11 in 2050 4,500 2010 US$ bn* 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 *GDP projections have been re-based from 2007 to 2010 to incorporate recent data. Growth and currency appreciation paths from 2011 to 2050 are kept the same Source: GS Global ECS Research. GSAM CalculationsThis information discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions and should not be construed as research or investment advice. Please see additional disclosures.Any reference to a specific company or security does not constitute a recommendation to buy, sell, hold or directly invest in the company or its securities. 7
  8. 8. Wealth Today 50,000 US$ 45,000 2010 GDP per capita in US$ 40,000 35,000 30,000 25,000 20,000 15,000 10,000 Middle Income Class Threshold 5,000 0 Source: GS Global ECS ResearchThis information discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions and should not be construed as research or investment advice. Please see additional disclosures.Any reference to a specific company or security does not constitute a recommendation to buy, sell, hold or directly invest in the company or its securities. 8
  9. 9. Wealth in 2050 100,000 90,000 2007 US$ 2050 GDP per capita in 2007 US$ 80,000 70,000 60,000 50,000 40,000 30,000 Middle Income 20,000 Class Threshold 10,000 0 Source: GS Global ECS ResearchThis information discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions and should not be construed as research or investment advice. Please see additional disclosures.Any reference to a specific company or security does not constitute a recommendation to buy, sell, hold or directly invest in the company or its securities. 9
  10. 10. The Rise of the Middle Class 1,800 Millions of Brazil China India 1,600 people Russia N-11 African 11 1,400 1,200 1,000 800 600 400 200 0 10 20 30 40 50 Source: GS Global ECS ResearchThis information discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions and should not be construed as research or investment advice. Please see additional disclosures.Any reference to a specific company or security does not constitute a recommendation to buy, sell, hold or directly invest in the company or its securities. 10
  11. 11. As Incomes Rise, Consumption Becomes More Discretionary 100% Transport, recreation&culture, 90% restaurants and hotels 80% Housing, water, electricity & other fuels 70% Health 60% 50% Education 40% 30% Communication 20% 10% Furnishings, household equipment & 0% maintenance 800-1,000 1,500-2,000 3,500-7,500 20,000-35,000 Food, beverages, Share of consumption directed to major categories, tobacco, clothing and average of countries in each wealth band footwear Source: GS Global ECS ResearchThis information discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions and should not be construed as research or investment advice. Please see additional disclosures.Any reference to a specific company or security does not constitute a recommendation to buy, sell, hold or directly invest in the company or its securities. 11
  12. 12. BRICs & N-11 2010 Growth Environment Score (GES) 8 GES 1997-2010 GES Change 7 1997 GES 1997 Developing Average 6 2010 Developing Average 5 4 3 2 1 0 Source: GS Global ECS ResearchThis information discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions and should not be construed as research or investment advice. Please see additional disclosures.Any reference to a specific company or security does not constitute a recommendation to buy, sell, hold or directly invest in the company or its securities. 12
  13. 13. African 11 2010 Growth Environment Score (GES) 6 GES 1997-2010 GES Change 1997 GES 5 1997 Africa Average 2010 Africa Average 4 3 2 1 0 Source: GS Global ECS ResearchThis information discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions and should not be construed as research or investment advice. Please see additional disclosures.Any reference to a specific company or security does not constitute a recommendation to buy, sell, hold or directly invest in the company or its securities. 13
  14. 14. Growth Conditions Progress Since 1997 7 GES 1997 Average African 11 GES 6 2009 Average African 11 GES 5 4 3 2 1 0 Macro Macro Human Political Technology stability conditions Capital conditions Source: GS Global ECS ResearchThis information discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions and should not be construed as research or investment advice. Please see additional disclosures.Any reference to a specific company or security does not constitute a recommendation to buy, sell, hold or directly invest in the company or its securities. 14
  15. 15. Disclaimer This material does not constitute research, investment advice or trade recommendations. These views may not represent the views of GSAM’s portfolio management teams, the Global Investment Research (GIR) Department, and/or any other departments/divisions of Goldman Sachs and its affiliates which may differ. This material has been prepared by GSAM and is not a product of GIR. Investors are urged to consult with their financial advisors before buying or selling any securities. Views and opinions are current as of the date of this presentation and may be subject to change. GSAM has no obligation to provide any updates or changes. Prospective investors should inform themselves as to any applicable legal requirements and taxation and exchange control regulations in the countries of their citizenship, residence or domicile which might be relevant. Past performance is not indicative of future results, which may vary. No part of this material may, without GSAM’s prior written consent, be (i) copied, photocopied or duplicated in any form, by any means, or (ii) distributed to any person that is not an employee, officer, director, or authorized agent of the recipient. There may be conflicts of interest relating to GSAM and its service providers, including Goldman Sachs and its affiliates, who are engaged in businesses and have interests other than that of managing, distributing and otherwise providing services to GSAM. These activities and interests include potential multiple advisory, transactional and financial and other interests in securities and instruments that may be purchased or sold by GSAM , or in other investment vehicles that may purchase or sell such securities and instruments. These are considerations of which investors should be aware. Additional information relating to these conflicts is set forth in GSAM’s Conflicts of Interest Policy. Any references to indices, benchmarks or other measures of relative market performance over a specified period of time are provided for your information only. Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. We have relied upon and assumed without independent verification, the accuracy and completeness of all information available from public sources. This material has been communicated in the United Kingdom by Goldman Sachs Asset Management International which is authorized and regulated by the Financial Services Authority (FSA). Please note that neither Goldman Sachs Asset Management International nor any other entities involved in the Goldman Sachs Asset Management (GSAM) business maintain any licenses, authorisations or registrations in Asia ex Japan, except that it conducts businesses (subject to applicable local regulations) in and from the following jurisdictions: Hong Kong, Singapore, Malaysia, Korea, and India. This material has been issued or approved by Goldman Sachs Canada, in connection with its distribution in Canada; in the United States by Goldman, Sachs & Co. This material has been issued for use in or from Hong Kong by Goldman Sachs (Asia) L.L.C, in or from Singapore by Goldman Sachs (Singapore) Pte. (Company Number: 198602165W), and in or from Korea by Goldman Sachs Asset management Korea Co. Ltd. Material has been issued or approved for use in or from Japan by Goldman Sachs Asset Management Co., Ltd. Copyright © 2011, Goldman, Sachs & Co. All rights reserved.This information discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions and should not be construed as research or investment advice. Please see additional disclosures.Any reference to a specific company or security does not constitute a recommendation to buy, sell, hold or directly invest in the company or its securities. 15

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