Red-Hot Resources

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Tuesday, January 02, 2007

Emerging Market Mania

Bloomberg tells us today...

Emerging-market stocks may lead global equity returns for a sixth straight year because consumers from China to Brazil are becoming wealthy enough to propel economic growth even as demand for their exports slows.

Investors are targeting telephone companies and banks to profit from growing domestic spending after Chinese wages doubled during the past five years, Brazil's interest rates tumbled to the lowest in two decades and loans from Indian banks jumped 35 percent in the past two years.

Some factoids from the story...

  • In China, per-capita disposable incomes in towns and cities, where more than 500 million people live, rose 10 percent in the first nine months of 2006 from a year earlier. In India, the number of households earning an annual income of at least $10,000 is rising more than 20 percent a year, according to consultants McKinsey & Co. in New York.
  • Corporate and consumer lending in India has expanded more than a third in the last two fiscal years.
  • An MSCI index of food and beverage stocks in China soared 89 percent in 2006. A gauge of companies in India that make cars and other big-ticket items jumped 39 percent. In the U.S., by comparison, Procter & Gamble Co., the world's biggest consumer products company, rose 12 percent.

You can read the rest of the story by CLICKING HERE.

Bloomberg is picking up on the theme I wrote about in last week's Money and Markets, "Using International ETFs in 2007." In that article, I said: "For my money, the real outperforming countries are those in emerging markets — places outside the G-10 group of developed nations. That shouldn’t come as a surprise to subscribers of my Red-Hot Asian Tigers service. We’re already seeing big gains on stocks that operate around the Pacific Rim."

Investing overseas is potentially very lucrative, but it's best done with professional advice, because those markets can be brutal. If you're going to do it with ETFs,
you might want to check out my report, “ETFs Made Easy.”

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