Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
British Pound GBP Trend Forecast 2020 - 16th Feb 20
SAMSUNG AI Mega-trend Tech Stocks Investing 2020 - 16th Feb 20
Ignore the Polls, the Markets Have Already Told You Who Wins in 2020 - 16th Feb 20
UK Coronavirus COVID-19 Pandemic WARNING! Sheffield, Manchester, Birmingham Outbreaks Probable - 16th Feb 20
iShares Nasdaq Biotechnology ETF IBB AI Mega-trend Tech Stocks Investing 2020 - 15th Feb 20
Gold Stocks Still Stalled - 15th Feb 20
Is The Technology Stocks Sector Setting Up For A Crash? - 15th Feb 20
UK Calm Before Corona Virus Storm - Infections Forecast into End March 2020 - 15th Feb 20
The Growing Weaponization of Space - 14th Feb 20
Will the 2020s Be Good or Bad for the Gold Market? - 14th Feb 20
Predictive Modeling Suggests Gold Price Will Break Above $1650 Within 15~30 Days - 14th Feb 20
UK Coronavirus COVID-19 Infections and Deaths Trend Forecast 2020 - 14th Feb 20
Coronavirus, Powell and Gold - 14th Feb 20
How the Corona Virus is Affecting Global Stock Markets - 14th Feb 20
British Pound GBP Trend and Elliott Wave Analysis - 13th Feb 20
Owning and Driving a Land Rover Discovery Sport in 2020 - 2 YEAR Review - 13th Feb 20
Shipping Rates Plunge, Commodities and Stocks May Follow - 13th Feb 20
Powell says Fed will aggressively use QE to fight next recession - 13th Feb 20
PALLADIUM - THIS Is What a Run on the Bank for Precious Metals Looks Like… - 13th Feb 20
Bitcoin: "Is it too late to get in?" Get Answers Now - 13th Feb 20
China Coronavirus Infections Soar by 1/3rd to 60,000, Deaths Jump to 1,367 - 13th Feb 20
Crude Oil Price Action – Like a Coiled Spring Already? - 13th Feb 20
China Under Reporting Coronavirus COVID-19 Infections, Africa and South America Hidden Outbreaks - 12th Feb 20
Will USD X Decline About to Trigger Precious Metals Rally - 12th Feb 20
Copper Market is a Coiled Spring - 12th Feb 20
Dow Theory Stock Market Warning from the Utilities Index - 12th Feb 20
How to Get Virgin Media Engineers to FIX Hub 3.0 Problems and NOT BS Customers - 12th Feb 20
China Under Reporting Coronavirus COVID-19 Infections by 66% Due to Capacity Constraints - 12th Feb 20
Is Coronavirus the Black Swan That Takes Gold To-Da-Moon? - 12th Feb 20
Stock Market 2020 – A Close Look At What To Expect - 12th Feb 20
IBM AI Mega-trend Tech Stocks Investing 2020 - 11th Feb 20
The US Dollar’s Subtle Message for Gold - 11th Feb 20
What All To Do Before Opening A Bank Account For Your Business - 11th Feb 20
How and When to Enter Day Trades & Swing Trade For Maximum Gains - 11th Feb 20
The Great Stock Market Dichotomy - 11th Feb 20
Stock Market Sector Rotation Should Peak Within 60+ Days – Part II - 11th Feb 20
CoronaVirus Pandemic Stocks Bear Market Risk 2020? - Video - 11th Feb 20
Facebook (FB) AI Mega-trend Tech Stocks Investing 2020 - 10th Feb 20
The US Constitution IS the Crisis - 10th Feb 20
Stock Market Correction Continues - 10th Feb 20
Useful Tips for Becoming a Better Man - 10th Feb 20
Will CoronaVirus Pandemic Trigger a Stocks Bear Market 2020? Part1 - 9th Feb 20
Could Silver Break-out like it did in 2011? - 9th Feb 20
The End of the Global Economy - 9th Feb 20
Fed to Stimulate in Any Crisis; Don’t Let Short-Term Events Bother You - 9th Feb 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

IMF and Buffett Impressed by India and China

Economics / Asian Economies May 06, 2010 - 07:42 AM GMT

By: Tony_Sagami

Economics

Best Financial Markets Analysis ArticleThe International Monetary Fund is an international organization that oversees the global financial situation of its 186 member countries. The IMF was formed with the goal of stabilizing international exchange rates and to provide financial assistance to countries that experience serious financial and economic difficulties with loans and other forms of financial aid.


Tracking those economic developments on a national, regional and global basis requires an army of economists, so the IMF has a very good handle on the global financial picture.

What the IMF sees in China and India impresses the heck out of it. The International Monetary Fund is now forecasting that China and India will generate 40% of the world’s growth in the next two years.

Forty percent? Wow! Let me give you some perspective on how impressive that is.

  • Twenty years ago, China and India generated just 10% of the world’s economic growth.
  • Ten years ago, it improved to 18%.
  • China alone will generate more growth than the entire G7 (the U.S., the U.K., Germany, France, Japan, Canada, and Italy).
  • India will generate more growth than all the 27 countries in the European Union.

China and India aren’t the only countries in Asia that are prospering. The IMF says that China, Indian, and the 10 ASEAN nations (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myamar, Philippines, Singapore, Thailand, and Vietnam) will generate half the world’s growth.

“By the end of 2009, output in most of Asia returned to pre-crisis levels even in those economies that were hit hardest by the crisis. After the deepest recession in recent history globally, we know that Asia is leading this global recovery,” said Anoop Singh of the International Monetary.

China and India, with growth rates of 10% and 8.8% respectively, are the economic engines behind that roaring growth.

The IMF isn’t alone in its enthusiasm for China. At the annual Berkshire Hathaway shareholder meeting, Warren Buffett predicted that China has many years of prosperity ahead of it.

“You’ve got well over a billion people who are just beginning to realize their potential," Buffett said.

Warren Buffett has joined the chorus of cheerleaders for China's economic growth.
Warren Buffett has joined the chorus of cheerleaders for China’s economic growth.

If the IMF and Buffett are right, you need to add some Asia to your portfolio. The easiest way is with exchange traded funds and here are three China ETFs to consider:

Shares FTSE/Xinhua China 25 Index (FXI): Seeks to track the performance of the FTSE/Xinhua China 25 index. This index consists of 25 companies that represent the largest 25 Chinese companies listed on the Hong Kong Stock Exchange.

PowerShares Golden Dragon Halter USX China (PGJ): Seeks results that correspond to the returns of the Halter USX China index. This index consists of 103 Chinese companies whose common stock is publicly traded in the U.S. The index uses a formula that prevents the largest market-cap companies from becoming too large a component of the index.

SPDR S&P China (GXC): Seeks to replicate the total return performance of the S&P/Citigroup BMI China index. This index consists of the largest 342 companies that are publicly traded and domiciled in China.

However, I think you can do much better — and make a bundle — by targeting the individual companies that provide the basic building blocks of that Chinese and Indian growth. When it comes to building, nothing is more basic than cement, rebar, and wood.

CEMENT: Anhui Conch Cement is the largest cement producer in China and was named as one of the “100 Top Chinese Companies with Growth Potential” by Forbes in 2006, 2007, and 2008. Anhui Conch is traded on the Hong Kong Stock under the symbol 0914.HK.

REBAR: General Steel, based in Xian, China is one of the largest steel companies in China. Most steel companies produce pipes, sheet steel, and beams but 90% of General Steel’s output is rebar which is one of the most important building blocks for roads, bridges, dams, and hi-rise buildings. General Steel trades on the NYSE under the ticker GSI.

Billions of dollars will be spent on 'green' technologies in Steel and cement are among the hottest commodities essential to China's massive construction efforts.
Steel and cement are among the hottest commodities essential to China’s massive construction efforts.

WOOD: Sino Forest is China’s largest timber company. It grows, harvests, and is also a major importer of logs. Sino Forest currently manages over 1.7 million acres timberland with options to purchase leases on an additional 2.3 million acres. Sino Forest trades both on the Toronto Stock Exchange (TRE.TO) as well as the U.S. over-the-counter market (SNOFF.PK).

I’m not suggesting you rush out and buy any of the stocks right away. As always, timing is critical so you should wait for a pullback. Additionally, I have to disclose that my Asia Stock Alert subscribers already own these three companies so they already have a head start.

It would be a colossal investment mistake to NOT include a healthy dose of Asian spice in your portfolio. You just can’t expect to hit any home runs if you haven’t made a significant allocation to Asia.

Best wishes,

Tony

This investment news is brought to you by Uncommon Wisdom. Uncommon Wisdom is a free daily investment newsletter from Weiss Research analysts offering the latest investing news and financial insights for the stock market, precious metals, natural resources, Asian and South American markets. From time to time, the authors of Uncommon Wisdom also cover other topics they feel can contribute to making you healthy, wealthy and wise. To view archives or subscribe, visit http://www.uncommonwisdomdaily.com.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules