Huge Week For The Emerging Markets

China official manufacturing PMI will be reported Wednesday, and is expected to drop to 50.7 from 50.9. HSBS final manufacturing PMI will be reported Thursday, and is expected at 50.5 vs. flash reading of 50.6 and 51.6 final in March.

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South Korea Set to Become Richer Than Japan Says Igor Purlantov

South Korea GDP Per Person Rising Rapidly According to Igor Purlantov

 

It should not come as a surprise to many that Japan has historically led the way in Asia in terms of gross domestic product (GDP) and GDP per person with respect to purchasing power parity (PPP) says Igor Purlantov. South Korea is now on track to overtake the title of richest Asian country from Japan when measured by GDP PPP. Although China has the largest economy among the emerging tigers, which includes Singapore, South Korea, Hong Kong, Taiwan, and China, it is South Korea that is on track to overtake Japan as Asia’s richest country. 

For many years, Japan has held the title of being the richest and most powerful economy in Asia. Helping led the way to this title was the fact that Japan was the first country in the region to see an emerging economy that quickly became industrialized says Igor Purlantov. As all of these Asian tigers continue to grow and leave their mark on the world’s stage, it is clear that South Korea is on track in terms of GDP PPP.

By using GDP PPP as a gauge, economists are able to account for differences in the cost of living in each respective country and adjust their ratings accordingly. Looking at GDP PPP numbers across all of these Asian tigers shows that they are each slowly reaching, if not, overtaking Japan. In 1993 Singapore was the first to overtake Japan in GDP PPP, which was followed by Hong Kong in 1997, and Taiwan in 2010 according to Igor Purlantov. It is now only a matter of time before South Korea overtakes Japan in terms of GDP PPP. At current growth rates, South Korea should overtake Japan as the richest country in Asia in terms of GDP PPP by 2017. 

This is a remarkable feat since it was only in 1980 that South Korea had a GDP PPP that was less than one quarter of that seen in Japan at the time. South Korea has clearly come a long way since 1980, especially given that back then, companies such as Hyundai, LG, and Samsung were practically unheard of outside of Seoul, says Igor Purlantov. These recent economic figures paint a picture of a major shift between established powerhouses such as Japan and newly emerged economies such as South Korea, the latter of which only recently graduated from the list of emerging markets around the world. 

Some economists have been quick to point out that when calculates at market exchange rates, Japan’s GDP PPP is still higher than every other Asian economy except for Singapore. Japan’s high housing and food prices quickly bring down the country’s true standard of living as it relates to GDP PPP.  According to Igor Purlantov, no matter how you look at the economic figures, ultimately it is clear that a major shift is underway among the Asian tiger economies with the cubs soon taking the lead from their elder and established counterparts.

 

Igor Purlantov is an expert on business and politics across emerging markets.   Mr. Purlantov has worked extensively in various emerging countries throughout Europe, Asia and Africa with both public and private companies as well as local governments.  You can learn more about Igor Purlantov on www.purlantov.com or follow him on twitter @igor_purlantov

Nokia Takes Aim at Emerging Markets

Nokia today took the wraps off the Asha 210, a colorful smart phone (see photo above for proof) with a QWERTY keyboard, and a dedicated WhatsApp button, which allows users to easily send and receive messages across an array of platforms. The Asha 210 is relatively low-powered – witness the 2-megapixel camera and 2.4-inch QVGA display – but Nokia is betting the social networking capability more than makes up for the lack of clout.

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Emerging-Market Stocks Jump to Two-Week High

Emerging stocks rose to a two-week high, led by raw-material producers, as commodities jumped and South Korea’s economy grew the most in two years. Russia’s ruble had the biggest gain among currencies in developing nations.

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Don’t Give Up on Emerging Markets

Don’t give up on emerging markets just yet.  Some emerging-market currencies have suffered sharp swings in recent sessions as expectations for the world economy were tempered by China’s lower-than-expected economic growth in the first quarter and by the International Monetary Fund‘s downgrade of global growth forecasts this week.

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Emerging Markets: What Has Changed?

This is what has changed in the EM space, in our view:

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Rise of the South from Eastern Europe and Central Asia

The world is in the midst of profound changes, and the countries of Eastern Europe and Central Asia are very much a part of this historic transformation. Many developing countries on all continents are now driving global economic growth and – more important – raising living standards for billions of people.

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The Case for Emerging-Markets Stocks

Emerging-market equities have historically outperformed as the global economy gained momentum. After a great catch-up rally in the second half of 2012, the stocks finished the year as global outperformers – only to lose that momentum in the first quarter of 2013.

http://tinyurl.com/a9yox7s

Spotify Launches in Asia, Mexico and Eastern Europe

TechCrunch reports that music streaming service Spotify has announced that it is launching in Singapore, Hong Kong, Malaysia, Mexico, Estonia, Latvia, Lithuania and Iceland, which brings the total number of countries where it is available to 28.

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Coke Drinks Deeply From Emerging Markets

Coca-Cola pushed forward with growth in emerging markets, though a series of currency problems and restructuring charges sent the world’s largest beverage company’s profit tumbling.

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eBay Is Winning in Emerging Markets

If eBay posts strong first-quarter earnings later today, much of that strength will have come from eBay’s winning record outside the U.S.  Last year, more than half of eBay’s $14 billion-plus in revenue came from non-U.S. countries. And more than one-quarter of that revenue came from countries beyond eBay’s three biggest markets: the U.S., the U.K. and Germany.

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Japan Triggers a Shift to Emerging Markets

Japan's aggressive efforts to revive its economy have prompted investors to move into emerging markets in search of better returns than the paltry yields offered by Japanese bonds.

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Small-Cap Exposure in Emerging Markets

Emerging markets have gotten off to a slow start in 2013. While U.S. stocks have soared, the largest emerging-market exchange traded funds (ETFs) have been stuck in the red.

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The Next Big Investment Opportunity: Garbage

Forget Bitcoins, trash is the next big investment. At least that's according to some strategists who believe this unusual asset class is set to grow.  Amid talk about bubbles in gold, major central banks adopting extremely loose monetary policies that lower yields on nearly every safe asset, and stock markets hitting historic highs, strategists at Bank of America Merrill Lynch draw attention to garbage as the next big investment boom. 

http://tinyurl.com/d65dddg

Cyprus Woes Threaten East Europe GDP

Cyprus’s bailout threatens to slow eastern European growth through trade and banking links if it sparks capital flight from the most indebted euro-area nations, the European Bank for Reconstruction and Development said.

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LG Expanding Retail Stores in Emerging Markets

Samsung's not the only Korean electronics company expanding its retail footprint. LG also plans to open more stores this year, according to a news report.  LG intends to increase the number of its retail stores in emerging markets to boost its market share in smartphones and build a bigger reach for its consumer electronics, according to The Wall Street Journal (subscription required). The publication, citing LG Global Marketing Officer Ki Wan Kim, said the company plans to grow the number of LG-branded shops by as much as 20 percent above the current level of more than 3,000 stores.

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Emerging Markets’ Thirst for Coffee Jumps

 

Coffee consumption in emerging markets jumped 10 per cent in 2012, one of the largest increases on record.  The International Coffee Organization in London pointed to a rise in coffee drinking in countries such as China and Russia. Growing demand in emerging markets has come as traditional coffee drinking regions, such as Europe and North America, saw a fall in growth, declining 1 per cent last year. 

 

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Emerging Markets Led Global Air Traffic Growth

Global airline passenger demand continued its steady rise, especially in emerging markets.  The International Air Transport Association (IATA) announced today that passenger demand rose 3.7 percent in February compared with February 2012 demand. Since October 2012, the air travel market has seen a major turnaround with passenger demand growing at an annualized rate of 9 percent, double the growth rate in the first nine months of 2012.

http://tinyurl.com/czjj6nm

Waistline Index Grows in Emerging Markets

 Fast food and expanding waistlines are not just an American health concern. Even as McDonald’s Corp. (MCD), Yum! Brands Inc (YUM). and Domino’s Pizza Inc. (DPZ) work to placate anti-obesity advocates at home, they’re taking high-calorie offerings to other parts of the globe and hooking a new generation in emerging markets. Their target customers, often part of a rising middle class with a more sedentary lifestyle, are in turn putting on the pounds.

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Facebook Phone Faces Uphill Battle In Emerging Markets

Facebook is gearing up to announce a big, new phone product tomorrow. We don’t know what it will look like, but this is already good news. Facebook needs a tighter integration with smartphones if it wants to grow. It has also reportedly paired up with Android and HTC, which suggests low-cost phones.

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Cars Roaring Into Emerging Markets

You would not know it from driving through Los Angeles or watching televised sports, but America is not the world’s biggest auto market any more, at least by units sold. That mantle passed quietly to China after the 2008 crisis. The No. 2 world economy gobbled 19.3 million new motor vehicles last year, compared to 14.5 million for the U.S.

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Cyprus Finance Minister Quits Amid Bank Probe

Cyprus has appointed a new Finance Minister, just hours after the incumbent resigned amid the launch of an investigation into its dramatic banking sector bailout.  The Greek Cypriot government named Harris Georgiades as the new minister to replace Michael Sarris.  Mr Georgiades will be sworn in on Wednesday, a government statement said.  Mr Sarris resigned after the investigation was ordered into how the country's economy nearly collapsed last month.

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