There’s nothing worse than missing an amazing window of opportunity. When these great opportunities in the BRIC economies filter through to the mainstream - the chance to make huge profits is over. Get in ahead of the curve right now - let me explain...
European investors seem to be falling out of love with China. Leave Hong Kong out of it and EU foreign direct investment into the Asian dragon actually fell by 70% last year. China pulled-in 6 billion euro in 2006, but that dropped to just 1.8 billion euro last year. And that’s not because European investors are sending less money abroad. In fact, the foreign investment from Europe into the rest of the world soared by 53% last year, to 419.9 billion euro.
That’s interesting when you actually think about how much media attention the China story gets. China is not exactly yesterday’s news - this growth story still has a long way to go. But production costs in the country are soaring and low-end producers are feeling the pain. China just isn’t "China" anymore. And that’s pushing economic growth into a lot of new areas.
Profit Hunter readers will already know that though. Last week I explained why a lot China’s low-end manufacturing companies plan on shifting production to Vietnam to cut costs. That’s obviously great news for our Vietnam play, but it’s not the end of the story.
Buying into Russia’s boom
So where is Europe’s money going now? Brazil got 7.1 billion euro, but of the four major emerging economies - the so-called BRICs - Russia won, hands down. The Eurasian giant raked-in 17.1 billion euro last year.
Russia doesn’t usually get positive headlines in the mainstream press. If the government isn’t being accused of poisoning ex-KGB agents, the financial press is reporting on how Western energy companies in that country are having their assets confiscated. (My colleague, Garry White at Smart Commodities has actually found a possible way to profit from that, by the way).
But the truth is that Russia is storming ahead. The economy grew by 8.1% last year and should grow by 6.8% this year. And the average Russian will earn 75% more this year than he did in 2006. The average income was just $6924 in 2006, but it should reach $12,013 this year. And that should hit $25,091 in just five years, according to the IMF.
We are already positioned to profit from Russia’s rapidly growing middle class, through one brilliant investment, that we’re now reaping the rewards from. We’ve also got our eye on something else that could be even bigger ...
And that’s not all...
EU investment is just a small part of the story though. Yesterday, Prime Minister Vladimir Putin approved Russia’s biggest spending project since the collapse of the Soviet Union. They’re going to spend US$570 billion to overhaul and expand the country’s transportation infrastructure over the next seven years. And about time as well.
The Moscow Times tells us that as many as three million Russians still live in settlements without year-round roads or rail access. And 70% of all railroads, highways, ports and airports that they have actually got are "outdated." So, there is huge scope for development here.
They now plan on building 17,000 kilometres of roads, 3,000 km of railroads and over 100 airport runways. They’re also going to be expanding their ports to handle an extra 400 million tonnes of cargo per year. The country is laying down the infrastructure for a sustained boom. Russia is still in the early stages of it economic take-off and European companies want their piece of it. That should give the Russian government the money to buy all the polonium it wants...
India is looking good right now...
The other big winner was India. Foreign direct investment from the European Union into the other Asian giant soared to 10.9 billion euro ($17 billion) last year. That’s up from just 2.5 billion euro in 2006. There is a lot going on in India right now. The 2008 Forbes Rich List shows that 4 of the 10 richest people on the planet are Indians. Two of them are in the top five. No great surprise that Europe is suddenly waking-up to India.
We stayed clear of India last year because valuations on the Indian markets had simply got out of hand. We’ve seen a significant correction since the beginning of the year though. Despite a recent rebound, the Bombay Sensex Index is still down about 18% from its peak. A lot of the country’s most interesting companies now look a lot more attractive...and we’re running the rule over them.
So how can we help you?
Simple...
At Profit Hunter we aim to find the next big thing well ahead of the pack. We called the bottom on Vietnam, we got into Africa ahead of the curve... and our moves to date in Russia have been very impressive.
We can show you where your money should be, before the opportunity becomes headline news and you miss the window.
Find out what our next big play is right now...
P.S. If you enjoyed this article then we encourage you to sign up for Profit Hunter. Track down exciting opportunities in the worlds’ emerging markets and always stay ahead of the curve.