Tag Archive for BRICS

Emerging Markets were a long term “dog’. // Many new rail projects now “suspect”

Too little emerging market due diligence…

There is an excellent market recap analysis by Bloomberg — on Aug 5, 2015

Emerging markets and the BRICS nations were to be the darlings of investors as growth became slower in the developed world.

Massive new and expanded Railways and ports were to be built around the promoted high growth prospects.

Warnings that the prospects might not be as rosy as predicted were shrugged off. Too often it seems due diligence was overlooked. Now those high prospects require a Strategic Plan B.

“Today, after heady runs and abrupt reversals, most of the BRICs — as well as most emerging nations — look like big-time losers say many of those interviewed by Bloomberg.

The history of emerging markets is a history of booms and busts, but the immediate future may hold something more prosaic: a malaise.

Investors today confront what could turn out to be a lost decade of returns, with four or five more meager years ahead.

It was only 14 years ago Wall Street fell in love with the BRICs, the tidy acronym for four (5 with South Africa) large emerging economies that, to many, looked like sure winners. …

The MSCI Emerging Markets Index nearly quadrupled between 2002 and 2010 .

But now in 2015 that pattern looks to some like it was an anomaly.

“Very few emerging markets historically have ever been able to make it to the developed countries,” said Sharma, head of emerging markets at Morgan Stanley Investment Management Inc. “This is a return to normalcy.”

Currency Rout… “All told, developing-nation currencies have fallen to their lowest levels since 1999, and bonds denominated in those currencies have wiped out five years’ worth of gains.”

“Since 2009, the MSCI index has fallen 10 percent while developed markets have soared about 50 percent” reports Bloomberg.

Looking ahead, 14 of 23 major emerging-market currencies are forecast to decline against the dollar by the end of June 2016, according to data compiled by Bloomberg.

Forecast earnings for companies in the MSCI index have fallen to their lowest since the end of 2009.

Plans for massive new resource hauling freight railroads are ‘on hold across Africa and in Asia and Australia.

To read the entire article, please go to http://bloom.bg/1SPNlh1 Jim Blaze

New BRICS bank praised as a game changer? True or False?

The launch of the Brics New Development Bank will change global development finance, said Eskom’s  Brian Molefe  on Thursday.   “They will talk about global development finance before and after Ufa,” claims Mr Molefe.

Is this True or False?

Before you answer, recall that his South Africa power utility desperately needs funding.   As the acting CEO of South Africa’s power utility, he wants to be both an organizer and a client of the new bank.  That is not the person one asks for an independent due diligence opinion.

The BRICS are Brazil, Russia, India, China, and South Africa.    The New Development Bank, launched during the Ufa Russia 2015 Brics/SCO (Shanghai Co-operation Organisation) Summit on Tuesday, would be based in Beijing.

Broad Issues:

The new group may succeed.  But they face hurdles.   For starters, the member nations do not yet have standard streamlined visa processes in place among them.   And all are a bit tight on capital .  Each has some dependency upon the World Bank for loans.

The sponsors say they expect the new bank to fund riskier projects.

So is this real, or is this a game plan for questionable geo-political leverage investments?

A bit of due diligence might be a good idea.

For more, see: http://m.engineeringnews.co.za/article/brics-banks-a-global-game-changer-says-eskoms-molefe-2015-07-09/rep_id:3182

BRICS Hail $100 Billion Reserves Pool! Realistic? Or a fools assumption?

The BRICS group of nations represent more than a fifth of the global economy.

The news sources issued by their public relations people are tonight talking up closer financial ties.

They are off to a summit in Russia on the subject.

A grand concept? But who will write the checks?

Most of the BRICS actually qualify for World Bank aid for a reason.

Is the new BRICS institution going to “borrow from Peter to pay Paul, so to speak.

Of Brazil, India, Russia, China, and South Africa, only China may have sufficient “reserves” in these troubled times to send money to the others.

Funding trillions of dollars in global rail and port and highway projects from this group “seems to be a streatch”

What do you think?

To read the entire Bloomberg article, go to http://bloom.bg/1KPJWsp