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Emerging Markets: Pathways to Selection

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Discussion related to the analysis and selection of emerging markets for investment

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Emerging Markets: Pathways to Selection

  1. 1. (A division of Pythhos Technology (P) Ltd.) A perspective from Boston Analytics Emerging Markets: Pathways to Selection February 2016
  2. 2. Agenda Definition and Key Characteristics of Emerging Markets Top 10 Fastest Growing Emerging Markets 2005 vs 2014 Conclusion 1 Appendix Executive Summary
  3. 3. Agenda Definition and Key Characteristics of Emerging Markets Top 10 Fastest Growing Emerging Markets 2005 vs 2014 Conclusion 2 Appendix Executive Summary
  4. 4. ExecutiveSummary Executive Summary ■ Emerging markets, due to their rapid economic growth and expansion, offer a wealth of opportunities in trade and foreign direct investment ■ These markets are dynamic however. While the largest markets as measured by their GDP has remained almost the same over the last decade, the list of the fastest growing markets has changed dramatically. The three fastest growing markets in 2005 were China, Kuwait and Kazakhstan, whereas in 2015 they were India, China and Nigeria ■ The specific opportunity which exists within any given emerging market differs however by industry and product type. While India, China and Nigeria may currently be the fastest growing markets, they may not be the most attractive for promoting a luxury product, or the easiest in which to work as an importer or foreign direct investor ■ BA believes when prioritizing countries, it is vital to study a wide variety of factors, from macro-economic, to industry, business, and product category specific factors. The value and importance of each factor also needs to be considered and applied as weights to the overall assessment. Finally, a balance needs to be established between a short-term and long–term view, as short term opportunities are often overestimated, while long term opportunities are often underestimated 3
  5. 5. Agenda Definition and Key Characteristics of Emerging Markets Top 10 Fastest Growing Emerging Markets 2005 vs 2014 Conclusion 4 Appendix Executive Summary
  6. 6. The term ‘emerging markets’ is associated with progress, growth, and opportunity 5 DefinitionandKeyCharacteristicsofEmergingMarkets An emerging market is a country in the process of rapid growth and development with lower per capita incomes and less mature capital markets than developed countries. Emerging markets are countries that are restructuring their economies along market-oriented lines and offer a wealth of opportunities in trade, technology transfers, and foreign direct investment A frontier market is a subset or category of emerging markets. A frontier market is one with little or less market liquidity, marginally developed capital markets, and lower per capita incomes vis à vis other emerging markets. However, as frontier markets have yet to undergo as much meaningful economic development, the potential for rapid growth and outsized returns make these markets interesting as they boast even greater long-term growth potential Definition of Emerging Markets Typical Characteristics of Emerging Markets  Rapid economic growth  Large population base  Transitional societies that are undertaking domestic economic and political reforms  Regional economic powerhouses  Increasing local and foreign investment Typical Characteristics of Frontier Markets  Rapid economic growth owing to early stage of economic development  Higher growth potential than other emerging markets due to faster rates of urbanization  The youth represent a majority of population  Low labor cost  Low debt-to-GDP Note: (1) For more detail on definition and the countries selected for this analysis, please refer to appendix Sources: (A) IMF (B) MSCI (C) Forbes (D) International Banker (E) Wall Street Journal (F) BA Analysis
  7. 7. Notes: (A) Includes 32 countries; out of 32 countries listed as ‘Advanced’ as per IMF based on multiple parameters such as per-capita income level, export diversification, degree of integration into the global financial system, human development index , etc. It includes the USA and Canada in North America, most nations in Western Europe, Japan, Australia, New Zealand, etc. (B) Set of 38 countries used for the purposes of this analysis. Please see the appendix for the methodology used to arrive at these 38 (C) 132 countries including other emerging markets and the rest of the world (D) GDP Market Prices (Constant 2005 US$). 2014 data or latest available (where 2014 data is not available) (E) 2014 GDP Per Capita PPP (Constant 2011 US $) or latest available; PPP = Purchasing Power Parity (F) Growth has been considered for GDP (constant prices at National currency) Source: (1) IMF World Economic Outlook Database, April 2015 (2) World Bank Data 13.5 As a group, their collective GDP is small, but their projected growth rate is higher 6 DefinitionandKeyCharacteristicsofEmergingMarkets GDP CAGR Growth (%)GDP – 2014(D) ($ T)(D) 2009‒2014(1) 2015‒2020(1) 37.5 17.6 1.5 2.3 4.0 3.7 3.9 GDP Per Capita PPP 2014(E) 41,009 22,554 11,809 Advanced Markets(A) Key Emerging Markets(B) Other Markets(C) Demographic Dynamics of Different Countries 4.4
  8. 8. Agenda 7 Definition and Key Characteristics of Emerging Markets Top 10 Emerging Markets 2005 vs 2014 Conclusion  Macroeconomic Indicators  Demographic Indicators  Business Indicators Appendix
  9. 9. Top10EmergingMarkets2005vs2015 In terms of size, the largest emerging markets in 2014 were the same as those in 2005 with only slight changes in their ranking Top 10 Countries by GDP(1) - 2014 2,269 898 892 866 834 764 483 328 304 286 China South Korea Brazil Mexico India Russia Turkey Saudi Arabia Poland Indonesia 5,270 1,598 1,239 1,206 1,069 1,000 673 523 472 428 China India South Korea Brazil Mexico Russia Turkey Saudi Arabia Indonesia Poland Top 10 Countries by GDP(1) - 2005 ■ The most dramatic change in ranking is India, which moved from fifth position to second from 2005 to 2014 GDP in $ bn GDP in $ bn Note: (1) GDP at Market Prices (Constant 2005 US$) (2) Please see the appendix for the list of countries considered for this analysis Sources: (A) IMF (B) World Bank 8
  10. 10. Top10EmergingMarkets2005vs2015 However, when considering growth rates, 6 out of the 10 fastest growing emerging markets in 2005 were not among the top 10 in 2014 Top 10 Fastest Growing(1) Countries - 2014 11.35% 10.08% 9.70% 9.28% 9.20% 8.40% 7.67% 7.55% 7.49% 7.26% China Kuwait Kazakhstan India Argentina Turkey Pakistan Vietnam Qatar Saudi Arabia 7.29% 7.27% 6.31% 6.13% 6.06% 5.99% 5.98% 5.02% 4.74% 4.57% India China Nigeria Philippines Bangladesh Malaysia Vietnam Indonesia Pakistan United Arab Emirates Top 10 Fastest Growing(1) Countries - 2005 ■ The average growth of the top 10 in 2005 was 8.8%. However, in 2014 for the same set of countries the average growth was only 3.9% ■ Globally, countries grew at an average growth rate of approximately 3.1% in 2014 while the average growth of the top 10 markets in 2014 was 5.9% Note: (1) Y-o-Y GDP Parentage Change; GDP at Market Prices (Constant 2005 US$) Sources: (A) World Bank Data (B) IMF Data Y-o-Y % change Y-o-Y % change Markets that did not make top ten in 2014 Markets that were not in top ten in 2005 9
  11. 11. Top10EmergingMarkets2005vs2015 In terms of growth, not only have the rankings changed, the change has been dramatic for some Top 10 Fastest Growing(1) Countries - 2014 11.4% 10.1% 9.7% 9.3% 9.2% 8.4% 7.7% 7.5% 7.5% 7.3% China Kuwait Kazakhstan India Argentina Turkey Pakistan Vietnam Qatar Saudi Arabia 7.3% 7.3% 6.3% 6.1% 6.1% 6.0% 6.0% 5.0% 4.7% 4.6% India China Nigeria Philippines Bangladesh Malaysia Vietnam Indonesia Pakistan UAE Top 10 Fastest Growing(1) Countries - 2005 2005 Y-o-Y % change Rank (2) 2005 2014 1 2 3 4 5 6 7 8 9 10 4 1 32 22 11 18 8 16 7 21 2014 Y-o-Y % change 2 38 13 1 34 20 9 7 14 17 Rank (2) 2005 2014 1 2 3 4 5 6 7 8 9 10 ■ Such dramatic changes overtime contribute to the perception of emerging markets being volatile and for some, therefore too risky for investment Note: (1) Y-o-Y GDP Parentage Change; GDP at Market Prices (Constant 2005 US$) (2) Rank among emerging markets Sources: (A) World Bank Data (B) IMF Data 10
  12. 12. The reasons countries dropped in their rankings in terms of economic growth from 2004 to 2015 vary by country… Kazakhstan ■ Kazakhstan is experiencing slower economic growth in 2014 due to negative supply- and demand-side effects, caused primarily by lower output in the oil industry, weaker external demand for Kazakhstan’s metal products by China and Russia, and weaker domestic demand Argentina ■ The country’s economy contracted as consumer spending and exports fell, both in part to high inflation Turkey ■ Turkey’s economic activity has slowed mainly due to political uncertainty and geopolitical tensions Kuwait, Qatar, Saudi Arabia ■ As a whole, GCC economies, including Kuwait, Qatar, and Saudi Arabia are suffering from low oil prices and high fiscal spending Sources: (A) World Bank (B) Wall Street Journal (C) Reuters Drop Outs: Countries in top ten fastest growing in 2005, but not on list in 2014 Top10EmergingMarkets2005vs2015 11
  13. 13. Sources: (A) African Economic Outlook (B) Wall Street Journal (C) Reuters (D) News articles Indonesia ■ Economic growth is attributed to exports of primary commodities such as coal and rubber to large markets, notably China, apart from oil and gas exports Malaysia ■ Malaysia’s economic growth is attributed to resilient domestic demand and private-sector investments that have helped cushion slowing exports of the trade-reliant country …while economic diversification has helped accelerate growth for most of the new entrants to the top 10 fastest growing list in 2014 Bangladesh ■ Bangladesh’s GDP growth is a result of deregulation of the economy, trade openness, and development of the financial sector Nigeria ■ Nigeria GDP growth accelerated over the decade with the non- oil sector being the main driver of growth ■ Services contributed ~57%, mainly retail and wholesale trade, real estate, information and communication Vietnam ■ Vietnam’s economic growth is primarily supported by exports mainly by foreign companies, which increased 15 percent in 2014, as disbursed foreign direct investment rose 7 percent UAE ■ Economic growth in UAE is attributed to diversification of income sources, and reduction of oil- reliance ■ Sectors such as financial services, logistics and tourism helped in stabilizing and growing the economy Accelerators: Countries not in top ten fastest growing in 2005, but on 2014 list Philippines ■ Growth in the Philippines’ GDP has been driven in part by the growing business process outsourcing and overseas remittances Top10EmergingMarkets2005vs2015 12
  14. 14. 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% CAGR 2009-11 CAGR 2012-14 CAGR 2015-17 Average CAGR for the period 2009-2017 Top10EmergingMarkets2005vs2015 While short term growth rates can be volatile, longer term growth rates are still generally higher than the global average Change in CAGR of GDP(1) over time for 15 fastest growing emerging markets (2) Note: (1) CAGR of GDP at Constant Prices National Currency (2) Top 15 countries basis 2012-2014 CAGR, with the exception of Ecuador which we have excluded because of drastic reduction in its GDP growth rate in future years. We have considered Pakistan instead, as it is also amongst the Top 10 fastest growing economies in 2015-2017 Sources: (1) IMF Data (2) News Publications, such as The Guardian etc. 4.3%5.2% 3.6%5.9% 5.3% 3.8%5.5%7.9% 6.1%6.2%7.3% 7.7% 5.6%6.4% 13 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 8.4% 1.6 0.7 0.6 0.4 0.3 1.2 0.3 0.7 0.5 1.8 1.0 0.6 1.5 0.6 Standard Deviation 5.7 3.4% Global CAGR 2009-2017 ■ The growth of oil exporting countries such as, Nigeria, UAE, Kazakhstan, Colombia and Malaysia are expected to decline due to lower oil prices. Markets highly dependent on oil revenue, such as Nigeria and UAE are projected to experience the maximum impact
  15. 15. Agenda 14 Definition and Key Characteristics of Emerging Markets Top 10 Emerging Markets 2005 vs 2014 Conclusion  Macroeconomic Indicators  Demographic Indicators  Business Indicators Appendix
  16. 16. 14% 11% 46% 32% 37% 59% 4% -2% -100 900 1900 2900 3900 4900 BillionUSD China India 10% 8% 13% 7% 10% 11% 5% 6% 35% 24% 25% 16% 21% 15% 29% 27% 57% 48% 52% 71% 72% 81% 73% 64% -1% 20% 9% 6% -4% -6% -7% 3% -50 50 150 250 350 450 550 Indonesia UAE Malaysia Nigeria Philippines Pakistan Bangladesh Vietnam BillionUSD Top10EmergingMarkets2005vs2015 A look at private consumption can provide yet another perspective. Other countries may emerge as more attractive when private consumption as a % of GDP is better understood Note: (1) The scale for India and China is different from the scale for rest of the top 10 countries (2) GDP at Market Prices (Constant 2005 US$) Sources: (A) World Bank GDP(2) composition by Private Consumption, Government Expenditure and Investments -2014 15 ■ In China, private consumption as a % of GDP is ~37% as compared to 50% or higher in most other emerging markets Government Expenditure Investment Private Consumption Net Exports
  17. 17. Top10EmergingMarkets2005vs2015 Note: (1) Household final consumption expenditure per capita(1) (constant 2005 US$) (2) GDP Per Capita, PPP-2014 (Constant 2011 at US$) (3) Qatar, Kuwait, Saudi Arabia, Argentina are not included owing to lack of data available (4) Sri Lanka data is as per latest available Sources: (A) World Bank Consumption patterns change with increase in income 16 Bangladesh Brazil Chile China Colombia Croatia Czech Republic Ecuador Egypt Hungary India Indonesia Kazakhstan Malaysia Mexico Morocco Nigeria Oman Pakistan Peru Philippines Poland Romania Russia South Africa South Korea Sri Lanka Thailand Turkey Ukraine UAE Vietnam 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 -1,000 1,000 3,000 5,000 7,000 9,000 11,000 13,000 Householdfinalconsumptionexpenditurepercapita(1)- 2014 GDP Per Capita, PPP-2014(2) Spending on Basic necessity (e.g., Food) Spending on Durables Spending on Luxury items ■ As wealth increases, so does the ability and propensity to buy certain products grows Countries in green are the top 10 fastest growing in 2014 (y/y growth) Similarly, GDP per capita or consumption per household can be a better indicator of a market opportunity than the size of the economy
  18. 18. Top10EmergingMarkets2005vs2015 Note: Household final consumption expenditure per capita (constant 2005 US$) - 2014 Source: (1) World Bank Household final consumption expenditure per capita (constant 2005 US$) 17 In some cases, household or personal consumption has grown over the past nine years, while in others, it has declined or been volatile 300 500 700 900 1,100 1,300 1,500 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 11,000 21,000 31,000 2,000 3,000 4,000 UAE Malaysia China Philippines Indonesia Bangladesh Nigeria Pakistan Vietnam India ■ For all the countries listed above, apart from Malaysia, the growth rate of household consumption has been higher than the GDP growth rate for the past 5 years ■ However, household consumption growth rate has just been marginally higher in the last year in China and Indonesia ■ Only UAE’s per capita household expenditure has dipped, for rest of the countries it has increased over the decade ■ China, Malaysia have shown a rapid increase in their household consumption, while others have shown a gradual increase, apart from Nigeria and Pakistan which have been unstable
  19. 19. Sector India China Nigeria Philippines Bangladesh Vietnam Indonesia Pakistan Clothing & Footwear 6% 9% 4% 3% 5% 4% 4% 5% Education 4% 7% 2% 4% 4% 4% 3% 2% Energy 8% 5% 2% 7% 6% 6% 6% 8% Financial Services 0% 1% 0% 2% 0% 1% 0% 0% Food and Beverages 45% 36% 57% 47% 55% 53% 49% 50% Health 5% 7% 11% 2% 3% 3% 2% 2% Housing 12% 6% 13% 15% 10% 5% 12% 14% ICT(2) 3% 9% 1% 3% 2% 4% 3% 2% Personal Care 2% 0% 0% 3% 2% 2% 2% 2% Transport 5% 6% 6% 8% 4% 7% 9% 7% Water Utility 0% 1% 0% 1% 0% 0% 0% 0% Others 10% 13% 4% 6% 9% 10% 11% 8% Top10EmergingMarkets2005vs2015 Amongst the top ten fastest growing emerging markets(3), most of the consumption has been concentrated on food and beverages Share of Household Consumption by sector(1) ■ Nigeria ranks highest among its peers in household consumption of Food & Beverages and Healthcare, while China ranks highest in household consumption of Clothing & Footwear, Education Note: (1) Percentage of Annual Household Consumption 2010 by Sector and Consumption Segment in $PPP (2) Information Communication Technology (ICT) (3) 2014: Malaysia and UAE are not included in the list of countries owing to lack of available information on share of household consumption by Sector (4) The color coding in the above heat map is vis-à-vis peers countries for the particular sector Sources: (A) Global Consumption Database World Bank 9% 6% 6% 5% 4% 4% 4% 3%High Low 18
  20. 20. Agenda 19 Definition and Key Characteristics of Emerging Markets Top 10 Emerging Markets 2005 vs 2014 Conclusion  Macroeconomic Indicators  Demographic Indicators  Business Indicators Appendix
  21. 21. To further complicate matters, when it comes to “ease of doing business”, the top 10 fastest growing emerging markets(1) range widely “Ease of Doing Business” amongst selected emerging markets (2)(3)(4) ■ Out of the top 10 fastest growing emerging economies in 2014, only Malaysia and UAE rank in the top 30 countries globally in terms of ease of doing business, the others rank lower than 83 Note: (1) As measured in 2014 (2) Economy Rankings of Ease of Doing Business (June 2015) (3) The total number of countries ranked by World Bank for Ease of Doing Business include 189 countries (4) See appendix for rationale for list of countries included Sources: (A) World Bank Ease of Doing Business Global Ranking Ranking - Selected Emerging Economies Ease of Doing Business Global Ranking Ranking - Selected Emerging Economies Ease of Doing Business Global Ranking Ranking - Selected Emerging Economies South Korea 4 1 Russia 51 14 Kuwait 101 27 Malaysia 18 2 Colombia 54 15 Philippines 103 28 Poland 25 3 Turkey 55 16 Sri Lanka 107 29 UAE 31 4 Greece 60 17 Indonesia 109 30 Czech Republic 36 5 Qatar 68 18 Brazil 116 31 Romania 37 6 Oman 70 19 Ecuador 117 32 Mexico 38 7 South Africa 73 20 Argentina 121 33 Croatia 40 8 Tunisia 74 21 India 130 34 Kazakhstan 41 9 Morocco 75 22 Egypt 131 35 Hungary 42 10 Saudi Arabia 82 23 Pakistan 138 36 Chile 48 11 Ukraine 83 24 Nigeria 169 37 Thailand 49 12 China 84 25 Bangladesh 174 38 Peru 50 13 Vietnam 90 26 Extremely Easy Moderately Easy Somewhat Easy Somewhat Difficult Moderately Difficult Extremely Difficult Top10EmergingMarkets2005vs2015 Top 10 fastest growing economy 2014 20
  22. 22. Agenda Definition and Key Characteristics of Emerging Markets Top 10 Emerging Markets 2005 vs 2014 Conclusion 21 Appendix Executive Summary
  23. 23. Given the number of variables which need to be considered to prioritize and track emerging markets, BA recommends firms develop an indexed approach based on their specific interests and then track markets overtime 22 1 2 Conduct Preliminary Assessment  Define the basic criteria which need to be met to be considered as a potential market  Develop a list of countries which meet the basic criteria  Identify any other countries to be included in the final list based on other specific hypotheses or for unique strategic reasons Shortlist Attractive Countries  Determine prioritization criteria considering macroeconomic, business related, industry related (e.g., demographic if a consumer facing company) and product specific variables  Determine availability of data, develop proxies if necessary and standardize to enable comparison  Weight criteria in terms of importance  Apply weights and score each country using a prioritization model  Identify shortlist of attractive countries Profile Countries  Profile short-listed countries, detailing market environment for concerned products  Incorporate data which could not be included in prioritization model, e.g., due to lack of standardization, inability to quantify, etc.  Study the entry and expansion strategies of others to learn from them and better set expectations  Confirm or revise findings from Prioritization Model 3 Track Countries  Identify means to automate analysis, e.g., via real-time streams of data into model and/or periodic meaningful updates  Identify changes in ranking overtime and why, being careful to distinguish between trends and blips  Conduct scenario analysis so that you can quickly and easily alter of change your course of action, if need be 4 Recommended steps to prioritization and monitoring emerging market opportunities Prioritization Model Example Conclusion
  24. 24. Agenda Definition and Key Characteristics of Emerging Markets Top 10 Emerging Markets 2005 vs 2014 Conclusion 23 Appendix Executive Summary
  25. 25. The definition of emerging vs. frontier markets differs according to the source Sources: (A) FTSE Emerging Markets (B) MSCI Emerging Markets Indices (C) Dow Jones Indexes (D) S&P Emerging Market Indices Emerging and frontier/pre-emerging markets as identified by various sources FTSE MSCI Dow Jones S&P Emerging Pre-emerging/ Frontier Emerging Pre-emerging/ Frontier Emerging Pre-emerging/ Frontier Emerging Pre-emerging/ Frontier Brazil Bahrain Brazil Argentina Mauritius Brazil Argentina Romania Brazil Argentina Nigeria Chile Bangladesh Chile Bahrain Morocco Chile Bahrain Serbia Chile Bahrain Oman China Botswana China Bangladesh Niger China Bangladesh Slovakia China Bangladesh Pakistan Colombia Bulgaria Colombia Benin Nigeria Colombia Bulgaria Slovenia Colombia Botswana Panama Czech Republic Côte d’Ivoire Czech Republic Botswana Oman Czech Republic Croatia Sri Lanka Czech Republic Bulgaria Qatar Egypt Croatia Egypt Bulgaria Pakistan Egypt Cyprus Tunisia Egypt Côte d'Ivoire Romania Hungary Cyprus Greece Burkina Faso Palestine Hungary Estonia Ukraine Hungary Croatia Slovakia India Estonia Hungary Croatia Romania India FYR Macedonia UAE India Cyprus Slovenia Indonesia Ghana India Estonia Saudi Arabia Indonesia Jordan Vietnam Indonesia Ecuador Sri Lanka Malaysia Jordan Indonesia Ghana Senegal Malaysia Kazakhstan Malaysia Estonia Trinidad and Tobago Mexico Kenya Malaysia Guinea-Bissau Serbia Mexico Kenya Mexico Ghana Tunisia Pakistan Lithuania Mexico Ivory Coast Slovenia Morocco Kuwait Morocco Jamaica Ukraine Peru Macedonia Peru Jamaica Sri Lanka Peru Latvia Peru Jordan UAE Philippines Malta Philippines Jordan Togo Philippines Lebanon Philippines Kazakhstan Vietnam Poland Mauritius Poland Kazakhstan Togo Poland Lithuania Poland Kenya Zambia Russia Morocco Qatar Kenya Trinidad and Tobago Russia Malta Russia Kuwait South Africa Nigeria Russia Kuwait Tunisia South Africa Mauritius South Africa Latvia Taiwan Oman Saudi Arabia Lebanon Ukraine South Korea Nigeria Taiwan Lebanon Thailand Qatar South Africa Lithuania Vietnam Taiwan Oman Thailand Lithuania Turkey Romania South Korea Mali Zimbabwe Thailand Pakistan Turkey Mauritius UAE Serbia Taiwan Bosnia and Herzegovina Turkey Qatar Namibia Thailand Turkey UAE 54 Countries are listed as frontier or pre-emerging markets by the four sources. However, the total number of emerging and frontier/pre-emerging markets is 75 countries Appendix 24
  26. 26. For the purposes of this paper, BA has considered only those emerging or frontier markets with a GDP >$40 Billion in 2014 Sources: (1) FTSE Emerging Markets (2) MSCI Emerging Markets Indices (3) Dow Jones Indexes (4) S&P Emerging Market Indices BA’s Methodology for identifying markets for this paper Country included in analysis: 38 countries Argentina Indonesia Romania Bangladesh Kazakhstan Russia Brazil Kuwait Saudi Arabia Chile Malaysia South Africa China Mexico South Korea Colombia Morocco Sri Lanka Croatia Nigeria Thailand Czech Republic Oman Tunisia Ecuador Pakistan Turkey Egypt Peru Ukraine Greece Philippines United Arab Emirates Hungary Poland Vietnam India Qatar ■ BA used the following approach to determine the list of countries to be included in this analysis − The universe was comprised of emerging or frontier markets by FTSE, MSCI, Dow Jones and S&P Emerging Market Indices − Only those markets with GDP greater than $40 Billion where included (Countries with GDP below $40 billion ehere excluded as these are small markets and do not have similar opportunity as the bigger markets) ■ As a result 38 countries were considered for our analysis Appendix 25
  27. 27. -20 -10 0 10 20 30 40 50 -4 -2 0 2 4 6 8 10 12 0 1 2 3 4 5 6 7 0 2 4 6 8 10 12 0 2 4 6 8 10 12 14 16 -25 -20 -15 -10 -5 0 5 10 15 20 GDP growth rate vs. private consumption growth rate for top 10 emerging economies (1/2) Note: GDP Growth Rate Private Consumption Growth Rate Sources: (1) World Bank Data China India Indonesia Malaysia Nigeria UAE . . Appendix 26
  28. 28. 0 1 2 3 4 5 6 7 8 9 GDP Private Consumption -2 0 2 4 6 8 10 12 14 GDP Private Consumption 0 1 2 3 4 5 6 7 8 GDP Private Consumption GDP growth rate vs. private consumption growth rate for top 10 emerging economies (2/2) Bangladesh Pakistan Philippines Vietnam 0 2 4 6 8 10 12 GDP Private Consumption Note: GDP Growth Rate Private Consumption Growth Rate Sources: (1) World Bank Data . . Appendix 27
  29. 29. To learn more about Boston Analytics’ expertise in emerging markets, please contact us. Contact: Kimberlee Luce Designation: Senior Vice President Email ID: kluce@bostonanalytics.com

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