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SCRUMBLING WORLD ECONOMY SEE HOPE IN BRIC’S

 INTRODUCTION

 OBJECTIVE

 RESEARCH METHODOLOGY

• RESEARCH DESIGN
• DATA COLLECTING PROCESS
• ANALYSIS
• SWOT ANALYSIS
• GRAPHICAL INTERPRETATION
• FACTS AND PERFORMANCE OF BRICs

 CONCLUSION

 LIMITATIONS
INTRODUCTION

WORLD ECONOMY:-

World Economies: Integration among the economies over the world has brought world
economy, particularly in the field of trade, commerce and information. It is common to limit
questions of the world economy exclusively to human economic activity, and the world
economy is typically judged in monetary terms, even in cases in which there is no efficient
market to help valuate certain goods or services, or in cases in which a lack of independent
research or government cooperation makes establishing figures difficult.

The world economy grew 5.2% in 2007 powered by growth in China (11%), India (9%)
and Russia (8%). The global economy faces a real risk of 1970s style stagflation
however, with resource constraints tighter than ever before.

Things could scarcely have looked rosier for the world economy at the start of 2007. The
Emerging Markets, led by the giants of China, India, Russia and Brazil (the BRIC countries)
had been posting 7%-10% grow rates for years. Property and stock market booms had
brought consistent growth in North America and Europe. Investment was bringing economic
development to much of the Middle East and Africa, and even Japan was recovering from its
deflationary lost year. Economic conditions within these countries play a major role in setting
the economic atmosphere of less well-to-do nations and their economies. In many aspects,
developing and less developed economies depend on the developed countries for their
economic wellbeing.

• World GDP (PPP): $65 trillion


• GDP Growth Rate: 5.2`%
• Growth Rate of Industrial Production: 5%
• GDP By Sector: Services- 64% Industry- 32% Agriculture- 4%
• GDP Per Capita (PPP): $9,774
• Population: 6.65 billion
• The Poor (Income below $2 per day): 3.25 billion (approximately 50%)
• Millionaires: 9 million (approximately 0.15%)
• Labor Force: 3.13 billion
• Exports: $13.87 trillion
• Imports: $13.81 trillion
• Inflation Rate – Developed Countries: 1% - 4%
• Inflation Rate – Developing Countries: 5% - 20%
• Unemployment – Developed Countries: 4% - 12%
• Unemployment & Underemployment - Developing Countries: 20% - 40%

In 2008 after vigorous growth which produced a dramatic increase in the price of
commodities such as oil and basic foodstuffs, the international economy began to slow in
many countries providing relief from high commodities prices and increasing inflation. It was
the opinion of some observers that the world economy had become somewhat overheated and
was retracting to a more sustainable pace.

WORLD ECONOMIC INDICATORS:-

World Economic Indicators and Indices react to – or even foreshadow – the health of the
global economy.

World economic indicators are specific indices and measures that indicate not only the
overall health of the global economy, but also provide some insight into its future. Economic
indicators can be found in many different forms. Some use economic statistics that illustrate
the ups and downs of particular trends in economic activities. The most commonly used
world economic indicators are: rates of inflation, the unemployment rate, the real GDP
growth rate, GDP-Per Capita, GDP-Purchasing Power Parity, amounts of foreign direct
investment, populations living below the poverty line, and current account balances.

WORLD STOCK MARKET:-


A stock market, or (equity market), is a private or public market for the trading of company
stock and derivatives of company stock at an agreed price; these are securities listed on a
stock exchange as well as those only traded privately.

World stock markets explained, for large and small investors, including a discussion of
securities, derivatives, and the general exchange of stocks around the globe. Around the
world, business organizations, small to large investors, financial organizations, and
governments of different nations are all major participants in stock market trading activities.
Together, the performance of all the world’s stock markets is directly responsible for a
significant amount of the world’s economic condition – whether it be healthy, ailing, or
trending sideways. In general, stock market growth is a leading indicator that the state of an
economy is flourishing, while declining trends indicate of economic slowdown.
Commentators suggest that stock markets often predict what will happen in the economy of
that country around six months later.

The major world stock exchanges are NYSE, NASADAQ, LSE, DOEJ JONES, NIKKI,
BSE, NSE, AUSTRALIA STOCK EXCHANGE etc. Some of exchanges are describe below.

NYSE (New York stock exchange):- The New York Stock Exchange (NYSE) is a stock
exchange based in New York City. It is the largest stock exchange in the world by dollar
volume and has 2,764 listed securities. It ranks fourth in the world in terms of company
listings with 3,200 companies, behind the Bombay Stock Exchange (BSE) of India, London
Stock Exchange and NASDAQ. As of December 31, 2006, the combined capitalization of all
New York Stock Exchange listed companies was $25.0 trillion.

NASADAQ :- The NASDAQ (acronym of National Association of Securities Dealers


Automated Quotations) is an American stock exchange. It is the largest electronic screen-
based equity securities trading market in the United States. With approximately 3,200
companies, it has more trading volume per day than any other stock exchange in the world.

It was founded in 1971 by the National Association of Securities Dealers (NASD), who
divested themselves of it in a series of sales in 2000 and 2001. It is owned and operated by
the NASDAQ OMX Group, the stock of which was listed on its own stock exchange in 2002,
and is monitored by the Securities and Exchange Commission (SEC). the second largest
exchange in the United States. It also operates eight stock exchanges in Europe and holds
one-third of the Dubai Stock Exchange
LSE (London Stock Exchange):- The London Stock Exchange or LSE is a stock exchange
located in London, England. Founded in 1801, it is one of the largest stock exchanges in the
world, with many overseas listings as well as British companies. The LSE is part of the
London Stock Exchange Group plc.Its current premises are situated in Paternoster Square
close to St Paul's Cathedral in the City of London.

Hong kong stock Exchange The Hong Kong Stock Exchange ( abbreviated as HKEX;
SEHK: 0388) is the stock exchange of Hong Kong. The exchange has predominantly been
the main exchange for Hong Kong where shares of listed companies are traded. It is Asia's
second largest stock exchange, behind the Tokyo Stock Exchange.Hong Kong Exchanges and
Clearing is the holding company for the exchange.

BSE:- The Bombay Stock Exchange Limited (formerly, The Stock Exchange, Mumbai;
popularly called The Bombay Stock Exchange, or BSE) is the oldest stock exchange in Asia.
It is also the biggest stock exchange in the world in terms of listed companies with 4700
listed companies as of August 2007. It is located at Dalal Street, Mumbai, India. The Bombay
Stock Exchange was established in 1875. Around 6,000 Indian companies list on the stock
exchange,and it has a significant trading volume.

NSE :- The National Stock Exchange of India Limited or S&P CNX NIFTY (NSE), is a
Mumbai-based stock exchange. It is the largest stock exchange in India in terms of daily
turnover and number of trades, for both equities and derivative trading.. Though a number of
other exchanges exist, NSE and the Bombay Stock Exchange are the two most significant
stock exchanges in India, and between them are responsible for the vast majority of share
transactions. The NSE's key index is the S&P CNX Nifty, known as the Nifty, an index of
fifty major stocks weighted by market capitalization
BRIEF STUDY ON BRIC,S

BRIC’s (BRAZIL, RUSSIA, INDIA, CHINA) :-

In economics, BRIC or BRICs is an acronym that refers to the fast growing developing
economies of Brazil, Russia, India, and China. The acronym was first coined and prominently
used by the investment bank Goldman Sachs (now converted as commercial bank) in
2001.Goldman Sachs argued that, since they are developing rapidly, by 2050 the combined
economies of the BRICs could eclipse the combined economies of the current richest
countries of the world.

Goldman Sachs argues that the economic potential of Brazil, Russia, India, and China is such
that they may become among the four most dominant economies by the year 2050. The thesis
was proposed by Jim O'Neill, global economist at Goldman Sachs. These countries
encompass over twenty-five percent of the world's land coverage, forty percent of the world's
population and hold a combined GDP (PPP) of 15.435 trillion dollars. On almost every scale,
they would be the largest entity on the global stage. These four countries are among the
biggest and fastest growing Emerging Markets.

(However, it is important to note that it is not the intent of Goldman Sachs to argue that these
four countries are a political alliance (such as the European Union) or any formal trading
association, like ASEAN. Nevertheless, they have taken steps to increase their political
cooperation, mainly as a way of influencing the United States position on major trade
accords, or, through the implicit threat of political cooperation, as a way of extracting
political concessions from the United States, such as the proposed nuclear cooperation with
India.) reccomdation

OBJECTIVE:-

To study the world economy and its crises

To study the challenges and opportunities for Brics ..

To study the return on our investment in BRIC’s & its comparison with US since last five
years

REARCH METHODOLOGY:

DATA COLLECTION

Data has been collected from the secondary data including various websites and news paper
articles

ANALYSIS:-

Analysis of BRICs by SWOT analysis in chronological order

1. BRAZIL

2. RUSSIA

3. INDIA

4. CHINA

GRAPHICAL PRESENTATION

BRAZIL:-

Flag Coat of arm

Brazil (Portuguese: Brasil), officially the Federative Republic of Brazil is the largest and
most populous country in South America It is the fifth largest country by geographical area,
the fifth most populous country, and the fourth most populous democracy in the world. Its
population comprises the majority of the world's Portuguese speakers. Bounded by the
Atlantic Ocean on the east, Brazil has a coastline of over 7,491 kilometers (4,655 mi). It is
bordered on the north by Venezuela, Suriname, Guyana and the overseas department of
French Guiana on the northwest by Colombia on the west by Bolivia and Peru on the
southwest by Argentina and Paraguay and on the south by Uruguay Numerous archipelagos
in the Atlantic Ocean are part of the Brazilian territory, such as Fernando de Noronha, Rocas
Atoll Saint Peter and Paul Rocks and Trindade and Martim Vaz

Brazil was a colony of Portugal from the landing of Pedro Álvares Cabral in 1500 until its
independence in 1822. Initially independent as the Empire of Brazil, the country has been a
republic since 1889. The bicameral legislature (now called Congress) dates back to 1824,
when the first constitution was ratified. The Constitution defines Brazil as a Federal Republic
formed by the union of 26 States the Federal District and the Municipalities (nowadays more
than 5,564).

Brazil is the world's tenth largest economy at market exchange rates and the ninth largest in
purchasing power Economic reforms have given the country new international projection. It
is a founding member of the United Nations, the Union of South American Nations, and the
Community of Portuguese Language Countries The Brazilian population is predominantly
Roman Catholic, almost all Portuguese-speaking and multiethnic Brazil is also home to a
diversity of wildlife, natural environments and extensive natural resources in a variety of
protected habitats.

ECONOMY OF BRAZIL:-

Brazil has a moderate free market and export-oriented economy. Measured nominally, its
gross domestic product surpasses a trillion dollars, the tenth in the world and the third in the
Americas; measured by purchasing power parity, $1.9 trillion, making it the eighth largest
economy in the world and the second largest in the Americas, after the United States.In Reais
(brazilian currency), its GDP is estimated at R$2.6 trillion reais in 2007.
STOCK MARKET OF BRAZIL:-

The BM&F Bovespa is a São Paulo-based stock exchange. It is the second largest stock
exchange in The Americas and the third largest in the world. On May 8, 2008, the São Paulo
Stock Exchange (Bovespa) and the Brazilian Mercantile and Futures Exchange (BM&F)
merged, creating the new BM&F Bovespa. The BM&F Bovespa is linked to all Brazilian
stock exchanges, including Rio de Janeiro's Boverj (BVRJ), where only government bonds
are traded. The benchmark indicator of Bovespa is the 50-stock Índice Bovespa. There were
450 companies traded at Bovespa as of April 30, 2008On May 20, 2008 the Bovespa index
reached its 10th consecutive record mark closing at 73,516 points, with a traded volume of
USD 4.2 billion or BRL 7.4 billion.

BOVESPA S.A. - Securities, Commodities and Futures Exchange was created in 2008 with
the integration between the Brazilian Mercantile & Futures Exchange (BM&F) and the São
Paulo Stock Exchange (Bovespa).Together, the companies have formed the third largest
exchange worldwide in terms of market value, the second largest in the Americas, and the
leading exchange in Latin America.In today’s global scenario, in which responding quickly to
transformation has become a competitive asset, BM&FBOVESPA is an attractive investment
option with cost efficient trading fees.Among its broad range of trading products, the new
Exchange offers equities, securities, financial assets, indices, interest rates, agricultural
commodities, and foreign exchange futures and spot contracts.

São Paulo Stock Exchange


ANALYSIS:

STRENGTH:-

• Brazil has the second most advanced industrial sector in the Americas.
• Proven mineral resources are extensive. Large iron and manganese reserves are
important sources of industrial raw materials and export earnings. .
• Brazil is one of the world's leading producers of hydroelectric power, with a current
capacity of about 78,000 megawatts.
• Brazil has three commercial nuclear reactor, Angra I, located near Rio de Janeiro,.
Angra II was completed in 2002. An Angra III is almost completed, planned
inauguration is 2008. The three reactors would have combined capacity of 5,000
megawatts when completed.
• Brazil has also achieved positive results within the packaging sector, in which it is the
fifth largest world producer.
• It provides for 25% of global exports of raw cane and refined sugar; it is the world
leader in soybean exports and is responsible for 80% of the planet’s orange juice.
• The Policy for Industry, Technology and Foreign Trade, at the forefront of this sector,
for its part, invests R$ 18.5 billion in specific sectors, following the example of the
software and semiconductor, pharmaceutical and medicine product, and capital goods
sectors.
• Government gives impotence to the ruler producer which help in agricultural
development. It has 7.2% growth rate in agriculture.
• Brazil has large and growing agricultural, mining, manufacturing and service sectors.
• Brazil economy ranks highest among all the South American countries and it has also
acquired a strong position in global economy..
• The present GDP is $1.6 trillion and the real growth rate of GDP is 3.7%. rate of
unemployment is 9.6% and inflation is 3%.Major industries are textiles, shoes,
chemicals, aircraft, steel, motor vehicles, etc. Agricultural products includes coffee,
soybeans, wheat, rice, corn, sugarcane, cocoa, citrus; beef.
• There has also been a great development in the field of science and technology in
Brazil due to the foreign investment in the country.The technological area of Brazil
consists of the making of airplanes and submarines.
• Brazil also plays a major role in the field of space research.
• Brazil is famous for the ethanol that is produced in large amounts in the country.
Brazil is the largest country that has car assembling companies within itself.
• It has also excelled in the field of water oil research and scientific developments in
various other fields.
• The labor force in Brazil comprises the majority of the Brazil economy.
• Industries: textiles, shoes, chemicals, cement, lumber, iron ore, tin, steel, aircraft,
motor vehicles and parts, other machinery and equipment.
• the world’s top exporter of beef, coffee, orange juice, poultry, soya beans and sugar, it
is also a giant in the global iron ore trade and holds the status as the world’s largest
exporter of ethanol.

WEAKNESS:-

• Economy of Brazil also has weaknesses. These are mostly related to debts. Domestic
debts went up from 1994 to 2003. But Brazil controlled this rise in 2006. The
president has introduced economic programs to control taxes and increase public
investment.
• High-quality cooking-grade coal required in the steel industry is in short supply
• The bottom 50% of the population earned only 19.07% of the total income while the
richest 10% of the population earned 39.31% of the total national income. Inequality
is a historic problem for Brazil, but has improved in recent years.
• The economy of Brazil grew only 2.2% per year (average). The country was hit by a
number of global and internal economic crises. But Brazil economy did not collapse.
• Brazil is also weak in the innovation system—a telling indicator is that their spending
on research and development as a percentage of GDP is less than a third of what it is
in developed countries.
• In terms of the information infrastructure (telephones, computers, Internet, and so on),
It lag considerably behind advanced countries such as the United States,
• Brazil's industrial production continued to face some problems caused by the
weakness of domestic demand and the loss of competitiveness among manufacturers,
as generated by the local currency's strong revaluation. Thus, the index of industrial
production reported a marginal increase of 0.1% in October, with respect to
September.

OPPORTUNITY

• For the creation of new knowledge, and for the dismantling of obsolete activities and
the start-up of more efficient new ones.
• To bring currency down to a reasonable value.
• Business land opportunity for Brazil it has productive and beautiful regions with a
very fertile soil.
• An income opportunity in Brazil, that yields 18.8% annually.
• As Brazil is rich in resources it has much business opportunity.
• There is lot of space in communication, transportation, export, and technology sector
for Brazil.
• Brazil has great ethanol production capacity, which is good option for petrol in next
year.

THREAT:-

• Corruption, Ignorance & Complacency is common threat in brazil.


• Climate threat for Brazil Soya export.
• Brazilian business faces a wave of strikes. Emboldened by an economic recovery that
is expected to push growth above 4% this year, workers in several industries are
threatening walkouts for higher wages. Bank employees in 30 cities have been on
strike for a week, while a walkout at airline Vasp grounded flights on Sept 21. Metal
and chemical workers in Brazil's industrial belt are also threatening strikes. Workers
are demanding pay hikes on the order of 4% to 17% above inflation, which is already
running higher than the Central Bank's year target of 5.5%. Brazil's left-leaning
President, Inácio Lula da Silva, a onetime union leader, has so far resisted calls to
intervene in negotiations involving civil workers in the state of Sao Paulo.
• High inflation rate causes darer of many products
• The threat of weapons of mass destruction in Brazil.

RUSSIA:-

Russia the Russian Federation is a transcontinental country extending over much of northern
Eurasia It is a semi-presidential republic comprising 83 federal subjects. Russia shares land
borders with the following countries (anticlockwise from northwest to southeast): Norway,
Finland, Estonia, Latvia, Lithuania, Poland (via Kaliningrad Oblast), Belarus, Ukraine,
Georgia Abkhazia South Ossetia, Azerbaijan, Kazakhstan, China, Mongolia and North
Korea. It also borders the Arctic Ocean, the Pacific Ocean, the Caspian Sea, the Baltic Sea,
and the Black Sea. Russia is close to the United States (Alaska) and Japan.

At 17,075,400 square kilometers, Russia is the largest country in the world, covering more
than an eighth of the Earth’s land area; with 142 million people, it is the ninth largest by
population. It extends across the whole of northern Asia and 40% of Europe, spanning 11
time zones and incorporating a great range of environments and landforms. Russia has the
world's greatest reserves of mineral and energy resources and is considered an energy
superpower. It has the world's largest forest reserves and its lakes contain approximately one-
quarter of the world's unfrozen fresh water.

Russia established worldwide power and influence from the times of the Russian Empire to
being the largest and leading constituent of the Soviet Union, the world's first and largest
constitutionally socialist state and a recognized superpower. The nation can boast a long
tradition of excellence in every aspect of the arts and sciences. The Russian Federation was
founded following the dissolution of the Soviet Union in 1991, but is recognized as the
continuing legal personality of the Soviet Union. It has one of the world's fastest growing
major economies and has the world's eleventh largest GDP by nominal GDP or seventh
largest by purchasing power parity with the eighth largest military budget. Russia is a
permanent member of the United Nations Security Council, a member of the G8, APEC and
the SCO and is a leading member of the Commonwealth of Independent States. It is one of
the five recognized nuclear weapons states and possesses the world's largest stockpile of
weapons of mass destruction.

ECONOMY OF RUSSIA:-

Russia is a unique emerging market, in the sense that being the nucleus of a former
superpower shows more anomalies. On one hand, its exports are primarily resource based,
and on the other, it has a pool of technical talent in aerospace, nuclear engineering, and basic
sciences. How this peculiar emerging market integrates itself into the world economy over
the coming decade is a story as significant in today's world as the reemergence of China and
India
Russia ended 2007 with its ninth straight year of growth, averaging 7% annually Although
high oil prices and a relatively cheap ruble initially drove this growth, s Over the last six
years, fixed capital investments have averaged real gains greater than 10% per year and
personal incomes have achieved real gains more than 12% per year. Russia has also improved
its international financial position The federal budget has run surpluses since 2001 and ended
2007 with a surplus of about 3% of GDP. Over the past several years, Russia has used its
stabilization fund based on oil taxes to prepay all Soviet-era sovereign debt to Paris Club
creditors and the IMF. Foreign debt is approximately one-third of GDP. The state component
of foreign debt has declined, but commercial debt to foreigners has risen strongly. During
President PUTIN's first administration, a number of important reforms were implemented in
the areas of tax, banking, labor, and land codes. These achievements have raised business and
investor confidence in Russia's economic prospects, with Rising inflation returned in the
second half of 2007, driven largely by unspecialized capital inflows and by rising food costs,
and approached 12% by year-end. In 2006, Russia signed a bilateral market access agreement
with the US as a prelude to possible WTO entry, and its companies are involved in global
merger and acquisition activity in the oil and gas, metals, and telecom sectors. Despite
Russia's recent success, serious problems persist. Oil, natural gas, metals, and timber account
for more than 80% of exports and 30% of government revenues, leaving the country
vulnerable to swings in world commodity prices. Russia's manufacturing base is dilapidated
and must be replaced or modernized if the country is to achieve broad-based economic
growth. The banking system, while increasing consumer lending and growing at a high rate,
is still small relative to the banking sectors of Russia's emerging market peers. Political
uncertainties associated with this year's power transition, corruption, and lack of trust in
institutions continue to dampen domestic and foreign investor sentiment. PUTIN has granted
more influence to forces within his government that desire to reassert state control over the
economy. Russia has made little progress in building the rule of law, the bedrock of a modern
market economy. The government has promised additional legislative amendments to make
its intellectual property protection WTO-consistent, but enforcement remains problematic.

STOCK MARKET OF RUSSIA:-.


The Russian Trading System is a stock market established in 1995 in Moscow, consolidating
various regional trading floors into one exchange. Originally RTS was modeled on
NASDAQ's trading and settlement software; in 1998 the exchange went on line with its own
in-house system. Initially created as a non-profit organization, at the moment RTS is in the
process of reorganization: it is being transformed into a joint-stock company. RTS data is
distributed world-wide through major financial information vendors such as Reuters.

Russia's stock market surged 686 percent from 2001 through 2005 - and another 66 percent
2006The RTS Stock Exchange markets are open from 10:30 a.m. till 6:00 p.m. Moscow time
(GMT+3).

RTS Indexes

The RTS Stock Exchange calculates and publishes 9 indexes: RTS Index, RTS-2 Index, and 7
sect oral indexes. The RTS Index and the RTS-2 Index are calculated using two different lists
of stocks The RTS Index, RTSI, the official Exchange indicator, first calculated on
September 1, 1995, is similar in function to the Dow Jones Average in New York City

RTSI is computed on thirty-minute intervals using real-time prices of the 50 most liquid
Russian stocks listed on the Exchange and is relayed to the RTS Web site, RTS workstations
and news agencies. The constituent list of stocks is reviewed every 3 months.The RTS-2
Index is calculated based on the list of 69 second-tier stocks.

ANALYSIS:

STRENGTHS:-

• Good universities; excellent engineering skills


• Dynamic local vendor landscape (particularly in Russia)
• Lowest labor cost across Europe; lower attrition rates than India
• Geographic and cultural proximity to Western Europe (with some exceptions Reform
oriented govt.)
• Strong trade balance
• Strong natural resource based groups, including major deposits of oil, natural gas,
coal, and many strategic minerals, timber .
• High S&T manpower
• Strong basic research
• High S&T capability
• High average educational levels
• Software development capabilities
• Poverty has declined steadily and the middle class has continued to expand.
• Oil export earnings have allowed Russia to increase its foreign reserves from $12
billion in 1999 to some $470 billion at yearend 2007, the third largest reserves in the
world.
• Foreign direct investment rising from $14.6 billion in 2005 to approximately $45
billion in 2007.
• In 2007, Russia's GDP grew 8.1%, led by non-tradable services and goods for the
domestic market, as opposed to oil or mineral extraction and exports.
• Russia has made little progress in building the rule of law, the bedrock of a modern
market economy.

WEAKNESS:-

• Relative geopolitical instability


• Travel restrictions to and from Russia
• Weak business education
• Potential corruption; potential security and IP protection issues
• Weak infrastructure outside metropolitan areas
• Poor investment climate
• Poor rule of law
• Weak financial system
• Dutch disease
• Poor linkages with productive sector
• Insufficient use of global knowledge
• Weak diffusion systems
• Poor link to labor market
• Weak Life Long Learning
• Lack of flexibility of educational system
• Low penetration ratios
• High prices
• Poor application and use

OPPORTUNITIES:-

• Become more sought after as inter-national track record with clients grows
• Become more attractive as rates in new EU member states move up
• More agile local vendors as a result of enhanced government support
• Build more external awareness following merger of Fort Ross and RusSoft
• Reverse capital flight and tap FDI by improving investment climate
• Develop financial system
• Tap global knowledge to increase value added in natural resources and diversify
economy
• Harness potential of strong S&T base
• Launch major re-skilling program
• Institute LL learning
• Reform higher education to market needs
• Expand penetration ratios
• Focus on applications
• Mordnization of business system.

THREATS:-

• India, China, new EU member states


• Qualified staff moving abroad
• Lack of quality middle management
• Rising costs of living in metropolitan areas (St. Petersburg, Moscow) to push up labor
costs
• Continued capital flight
• Big industrial groups may capture government
• Falling behind global advances in knowledge
• Continued loss of scientific talent
• Continued brain drain
• Resistance from established institutions
• Rigid university curri-culums
• Risk of digital divide
• Russia’s growth is acknowledged as unsustainable
• Russia is too dependent on natural resource sector (only sector growing, accounts for
80% of exports)
• Industrial sector is technologically outmoded and not competitive
• Russian economy suffers from overvalued exchange rate because of strong natural
resource exports
• Only dynamic actors are natural resource based industrial groups
• High human capital and strong science base are depreciating
• Russia risks becoming just a natural resource exporting economy
• Russia needs to diversify and upgrade its economy to improve international
competitiveness
• Russia risks becoming just a natural resource exporting economy
• Russia needs to diversify and upgrade its economy to improve international
competitiveness

INDIA :-

It is the seventh largest country by geographical area, the second most populous country, and
the most populous democracy in the world. Bounded by the Indian Ocean on the south, the
Arabian Sea on the west, and the Bay of Bengal on the east, India has a coastline of
7,517 kilometers (4,671 mi). It borders Pakistan to the west; China, Nepal, and Bhutan to the
north-east; and Bangladesh and Burma to the east. India is in the vicinity of Sri Lanka, the
Maldives, and Indonesia in the Indian Ocean.

India is a parliamentary republic consisting of 28 states and 7 union territories. It has the
world's twelfth largest economy at market exchange rates and the fourth largest in purchasing
power. Economic reforms have transformed it into the second fastest growing large economy;
however, it still suffers from high levels of poverty, illiteracy, and malnutrition. A pluralistic,
multilingual, and multiethnic society India is also home to a diversity of wildlife in a variety
of protected habitats.
ECONOMY:-

The economy of India, measured in USD exchange-rate terms, is the twelfth largest in the
world, with a GDP of around $1 trillion (2008). It recorded a GDP growth rate of 9.1% for
the fiscal year 2007–2008 which makes it the second fastest big emerging economy, after
China, in the world. At this rate of sustained growth many economists forecast that India
would, over the coming decades, have a more pronounced economic effect on the world
stage. Despite this phenomenal rate of growth, India's large population has a per capita
income of $2,659, measured by PPP, and $978, measured in nominal terms (revised 2007
estimate). The World Bank classifies India as a low-income economy.

India's economy is diverse and consists of various activities including manufacturing,


agriculture and services. Although (exact fraction needed here) of the Indian workforce still
earn their livelihood directly or indirectly through high tech, services are a growing sector
and play an increasingly important role in India's economy. The advent of the digital age, and
the large number of young and educated populace fluent in English, is gradually transforming
India as an important 'back office' destination for global outsourcing of customer services and
technical support. India is a major exporter of highly-skilled workers in software and
financial services, and software engineering. Other sectors like manufacturing,
pharmaceuticals, biotechnology nanotechnology, telecommunication shipbuilding, aviation,
tourism and retailing are showing strong potentials with higher growth rates.

India followed a socialist-inspired approach for most of its independent history, with strict
government control over private sector participation, foreign trade, and foreign direct
investment. However, since the early 1990s, India has gradually opened up its markets
through economic reforms by reducing government controls on foreign trade and investment.
The privatisation of publicly owned industries and the opening up of certain sectors to private
and foreign interests has proceeded slowly amid political debate.

India faces a fast-growing population and the challenge of reducing economic and social
inequality. Poverty remains a serious problem, although it has declined significantly since
independence

STOCK MARKET OF INDIA:-

Indian stock market run by two popular exchange, Bombay stock exchange (BSE) and
national stock exchange (NSE) out of them some regional exchange are also running.
Bombay Stock Exchange :-

The Bombay Stock Exchange, in Mumbai, is Asia's oldest and


India's largest stock

BSE:- Bombay Stock Exchange, or BSE) is the oldest stock


exchange in Asia. It is also the biggest stock exchange in the world
in terms of listed companies with 4700 listed companies as of August 2007. It is located at
Dalal Street Mumbai, India. On 31 December 2007, the equity market capitalization of the
companies listed on the BSE was US$ 1.79 trillion, making it the largest stock exchange in
South Asia and the tenth largest in the world

The Bombay Stock Exchange was established in 1875. Around 6,000 Indian companies list
on the stock exchange, and it has a significant trading volume. The BSE SENSEX , also
called the "BSE 30", is a widely used market index in India and Asia Though many other
exchanges exist

National Stock Exchange:-

NSE: - The National Stock Exchange of India Limited or S&P CNX NIFTY (NSE), is a
Mumbai-based stock exchange. It is the largest stock exchange in India in terms of daily
turnover and number of trades, for both equities and derivative trading.. Though a number of
other exchanges exist, NSE and the Bombay Stock Exchange are the two most significant
stock exchanges in India and between them are responsible for the vast majority of share
transactions. The NSE's key index is the S&P CNX Nifty, known as the Nifty, an index of
fifty major stocks weighted by market capitalization.NSE is mutually-owned by a set of
leading financial institutions, banks, insurance companies and other financial intermediaries
in India but its ownership and management operate as separate entities. As of 2006, the NSE
VSAT terminals, 2799 in total, cover more than 1500 cities across India. In October 2007, the
equity market capitalization of the companies listed on the NSE was US$ 1.46 trillion,
making it the second largest stock exchange in South Asia. NSE is the third largest Stock
Exchange in the world in terms of the number of trades in equities. It is the second fastest
growing stock exchange in the world with a recorded growth of 16.6%.
ANALYSIS:

STRENGTHS

• Highly educated , skilled ,young, capable & dynamic human resources


• English speaking & analytical students
• World class business-social-spiritual –political leader, Professor, scientist, Manager-
Doctor-Engineer-Civil servants etcs
• Very rich in Natural & Living resources
• Biodiversity & Traditional knowledge base
• Diversity vs. Ideas-Innovation-Integration
• Powerful spiritual strength (yoga-Ayurvada-Healing-therapy services)
• Geographical location (whole markets are shifting toward Asian nations)
• India Strategic position at various platforms
• Big democracy, Big market & free media
• Range of emerging professional champions
• IT & Software superpower

WEAKNESSES:

• Lack of trained & skill work force


• Small supply of specialize professional
• Lack of spirits of entrepreneurship, patriotisms and leadership skill
• Lack of effective & execution framework
• Lack of Indian management models
• Lack of transparency-Trust-Responsibility
• Lack of learning habits & Team work spirit
• Fear of sharing knowledge & taking risk
• Thinking win-lose lose-win look-outside
• Slow absorption of Innovation & change
• Lack of Indian management models
• Absence of greater technology impetus
• Unawareness: Quality-Standardization
• Lack of Emotional-Spiritual development
• Rush of getting high marks not Development

OPPORTUNITIES

• Big potential market in education Sector & emerging new market Segment in services
(create it)
• General Agreement of trade on Services
• Research & Development capability
• Generate intellectual property
• Resource Building capacity
• Competition- cost – Quality service

THREATS

• A feeling of unstable government


• Self centered political leadership
• Slow & Dysfunctional judiciary and corrupt law enforcers
• Regulation, protection and restriction
• Mechanistic -stable-Layered-complex system
• Corruption, Ignorance & Complacency
• High competitive & marketing forces
• To patent Indian intellectual property by outsider (unawareness about own
research)
• Fast change Internet-information technology& new Inventions-Technology-
Innovations
• Diversity vs. Imbalance- clashes
• Regional-Religion-caste-culture conflicts
• Migration of all branch to software job
• Job seeking mind sets, not job creator
• Unnecessary social pressure on students
• Excessive rich & powerful mindsets

CHINA:-
China has one of the world's oldest people and continuous civilizations, consisting of states
and cultures dating back more than six millennia. It has the world's longest continuously used
written language system, and is the source of many major inventions, such as what the British
scholar and biochemist Joseph Needham called the "four great inventions of Ancient China":
paper the compass, gunpowder, and printing. Historically, China's cultural sphere has
extended across East Asia as a whole, with Chinese religion, customs, and writing systems
being adopted to varying degrees by neighbors such as Japan, Korea and Vietnam. The last
Chinese Civil War has resulted in two political entities using the name China.

The People's Republic of China (PRC), commonly known as China, has control over
mainland China, and the largely self-governing territories of Hong Kong (since 1997) and
Macau (since 1999). The Republic of China (ROC), commonly known as Taiwan, has control
over the islands of Taiwan, Pescadores, Kinmen and Matsu.

ECONOMY OF CHINA:-

China’s economy today is ten times larger than it was in 1978, and continues to grow at 10
percent per year. By contrast, since 1980, roughly the beginning of economic reform in
China, up until 2005 yearend, the economy of Latin America as a whole grew 10 percent not
per year, but cumulatively. And in comparison with 28 years of 9-10 percent annual growth
in China, the growth of India’s economy has accelerated to only 6 percent, and only since
1991. The result is that the Chinese economy is now three times that of India, and the gap is
growing.

Two important dimensions of this growth are the emergence of a large middle class and a
rising income gap. As an indicator of how a few people in China have become fabulously
wealthy, in 2003, worldwide sales of Bentley automobiles were 200; 70 of them were sold in
China at price of 2 million rmb, or 250 times average urban income. The U.S. equivalent
would be if 200 people bought those cars at $7.5 million each.

The urban-rural gap was large even in the Maoist era (Mao gave a lot of lip service to
promoting the peasants’ interests, but most of that era’s policies actually favored urban
dwellers). The gaps that have increased in the reform period of the last few decades are
between the coastal areas and the inland. The coastal areas have done extremely well because
of the growing importance of foreign trade; most foreign trade involves production and
workers along a narrow strip along the coast, particularly Pearl River Delta and the Yangtze
Delta, the area from Shanghai up the Yangtze River and a little bit in the northeast. These
areas have been the major participants in international trade, with a big demand for labor, and
incomes in those areas have gone up particularly rapidly.

STOCK MARKET OF CHINA:-

The Shanghai Stock Exchange (SSE) is a Chinese stock exchange


based in the city of Shanghai, with a market capitalization of nearly
US$3.02 trillion (2007) making it the largest in mainland China and
fifth largest in the world. The current exchange was re-established
on November 26, 1990 and was in operation on December 19 of the same year. It is a non-
profit organization directly administered by the China Securitie Regulatory Commission
(CSRC).

Mainland China has a second, smaller, stock exchange: the Shenzhen Stock Exchange,
located in the city of Shenzhen. The distinction is made for Mainland China because the
Hong Kong Stock Exchange, located in the special administrative region of Hong Kong, is
the largest stock exchange in China, and has a separate history.

Shanghai Stock Exchange

ANALYSIS:

STREANTH:-

• Accelerated economic development.


• Increased comprehensive national strength.
• GNP increasing an average of 9% annually
• Export growth of 25% and imports up 15%.
• Will continue to dominate light and medium-tech industries.
• Key Money Recipient and Direct Foreign investment
• Leads world in direct foreign investment - $135 billion.
• All China's exports (or about $46.9 billion).
• This netted about $8.4 billion in taxes
• Moving to a market economy.
• Will be one of the world's six largest economies by 2020 with Japan, Indonesia, India,
and Korea and the US, according to the World Bank.
• Rich reserves of natural resources.
• Chinese prefer to work with U.S. companies for oil exploration and coal mine
development.
• Chinese allow compensation, trade, or cooperative ventures.
• Large Population Base and Potential Customers per capita consumption is low, but
with a large population, opportunity is incredible, especially for low-end products.
Also represent large future potential as buying power is increasing rapidly.
• World's most lucrative market (Schafer, 1996) of which China represent one-sixth of
the world’s population.
• Favorable Government Policies. Committed to economic growth at the national policy
level.
• Overseas-funded enterprises are granted equal status as domestic enterprises for taxes,
sales & transportation, purchase, distribution and operations.

WEAKNESSES

• Hard to control distribution of products.


• Some disorder in the financial sector.
• Energy, transportation, and important raw material have remained issue slowing
growth.
• Agriculture lacks staying power.
• Production in cities has displaced rural worker
• Average inflation is 15%, and surplus labor has regulated in rising unemployment and
inequalities in income distribution.
• Wage growth has not kept pace with inflation
• Infrastructure Railway, roads, communications and power supply are below standard.
• Employees need customer service tranning.
• training.
• 180 million illiterates or semi-illiterates over the age of 15.
• Little concept of maintenance or quality control.
• Employees could lack the productivity and innovation to guarantee continuous
growth.
• Shortage of construction funds for expansion of infrastructure and industrial
production capacity.
• expansion of infrastructure and industrial product capacity.
• Short supply of energy in some industrial market.
• Lack of electricity, fuel, and raw material.
• Lack of modern pollution control.
• Sewage, industrial waste, and pollution are growing problems, and china is home to
four of the world,s ten dirties cities.

OPPORTUNITIES:-

• Direct Investments or Joint Ventures.


• To provide advanced technology that can be mastered by the chinese
• Easy-to-target bottleneck industries of energy, communication, and transportaion.
• Equity and contractual ventures provide quicker access to the market.
• Partners in China can help with the bureaucracy, coustmer base and distribution.
• Financing Infrastructure Projects
• Opportunity to increase the available electricity to more than 120 million rural
citizens without electricity
• Need for overseas investment in coastal ports since more than 90% of exports are
• Carried by sea..
• Chrysler has a China Concept Vehicle made of recycled plastic planned to sell for
about $5,000.
• Improving Trade Relations, APEC, the Asian Pacific Economic Cooperation Forum,
leaders have a vision to create the world's biggest free trade region for developing
countries in Asia by 2020 3-year moratorium on adding new members in APEC
expires on December 31, 1996. The 18 member nations including Hong Kong, China,
and the U.S. will have other future trade partners.
• Tariffs cut on computers,
• semiconductors, and telecommunications equipment and other information equipment
to boost competitiveness.

THREATS
• Long-Run Success
• Effectiveness of investments in China
• will only be evident in the long-run and policies make it hard for non-China
companies to make money.
• Reporting and Accounting Standards Fall behind Western requirements.
• Only a small group of certified practicing accountants in China.
• Lack of modern financial reporting makes the economy less attractive to foregine
investors.
• Lack of a legal structure .
• Cultural Differences and Tradition Cause of many business conflicts
• Advocate collectivism and not individualism. Citizens have a long-term view and the
rigid educational systems stifle individualism
• Chinese take time in negotiations and dispute resolution.
• Non-Western work habits and slow bureaucracy are frustrating.
• Prefer harmony in all family, business, and social settings
• Must hire Chinese managers to better understand the role of courtesy, sensitivity, and
perception in the culture
• Uncertain Advertising Market, Strict advertising rules that ban, superlative claims and
comparative advertising
• Differences in dealing with government controlled media.
• Political Risk
• Rapid internal changes in Chinese society.
• Rising jobless rate, social unrest, and nonperforming
• state enterprises (A Hard Soft' Landing ...," 1996).
• Bringing China's mixed market and centrally planned economy into World Trade
Organization GATT.
• Risk from further market-oriented reform.
• Revelations between the central Chinese government and fast growing provinces
• Changes to a single currency, length of workweek, and tax system as well as unclear
responsibilities.
• Corruption is widespread at township, county, and even provincial levels
• Lack of protection of intelligent property.
• Slow government approvals for operations.
• Differences over human rights, trade, and nuclear weapon non-proliferatio
• State-Run Enterprises vs. Entrepreneurs
• Failure to reform and privatize state both heavy industries and high tech.
• The state enterprises take 70% of bank lending and yield overproduction, inefficiency
and wasted funds on misguided property and financial investment.
• Entrepreneurs are forced to raise funds from local governments, friends, or foreigners
due to lack of access to capital.

China's economic modernization presents great opportunities to U.S. businesses. If we are to


strengthen our economic performance and enhance our long-term economic security,
U.S.companies must move quickly to capitalize on the world's fastest growing market.
Despite the risks, problems, and challenges, there can certainly be rewards for U.S.
companies that are planning to operate in China.

Unlike countries such as Russia, China has made significant progress in discarding much of
its former central planning and socialist ideas. In March 1999, the Communist party adopted
a plan to accelerate liberalization of the economy. Nevertheless, given the complexity of
Chinese society, one cannot predict the way China will develop politically and economically.
While few in the current leadership advocate a return to state planning, strong disagreements
remain over the pace of economic and political reform. This means that China's emergence as
an economic powerhouse will surely not follow the steady and incremental growth that Japan
experienced. But despite the turmoil ahead, China has reached the point of no return. The
current leadership is pursuing a strategy of economic reform that would not destabilize its
political power. There is little chance, however, that the Chinese would accept any effort to
roll back the clock to economic stagnation.The trend is that no matter who prevails in
Beijing, a quarter of humankind is going to continue moving ahead with economic changes
that are helping to create a 21st century

Painting BRIC by numbers


Lists Brazil Russia India China
th
Countries by total area 5th 1st 7 3rd / 4th (disputed)
Countries by
5th 9th 2nd 1st
Population
Countries by
10th 11th 12th 4th
GDP (nominal).
Countries by
9th 7th 4th 2nd
GDP (PPP)
Countries by export. 21st 11th 23rd 2nd
Countries by imports 26th 17th 16th 2nd
Countries by current
29th 5th 154th 1st
Account balance.
Countries by received FDI 16th 12th 29th 5th
Countries by foreign
7th 3rd 4th 1st
Exchange reserve.
Countries by external
25th 20th 29th 22nd
Debt.
Countries by public
47th 117th 29th 98th
debt
Countries by electricity
10th 3rd 7th 2nd
consumption
Countries by number
6th 4th 2nd 1st
Of mobile number
Countries by number
5th 11th 4th 1st
of internet user

Acoording to Goldmen sache BRICs GDP in 2050

BRIC in 2050

Gross Domestic Product [2007] Gross Domestic Product [2050][11]


GDP (millions of GDP (millions of
Rank Country Rank Country
USD) USD)
1 United States 13,843,825 1 China 70,710,000
2 Japan 4,383,762 2 United States 38,514,000
3 Germany 3,322,147 3 India 37,668,000
4 China 3,250,827 4 Brazil 11,366,000
United 5 Mexico 9,340,000
5 2,772,570 6 Russia 8,580,000
Kingdom 7 Indonesia 7,010,000
6 France 2,560,255 8 Japan 6,677,000
7 Italy 2,104,666 United
8 Spain 1,438,959 9 5,133,000
9 Canada 1,432,140 Kingdom
10 Brazil 1,313,590 10 Germany 5,024,000
11 Russia 1,289,582 11 Nigeria 4,640,000
12 India 1,098,945 12 France 4,592,000
13 South Korea 957,053 13 South Korea 4,083,000
14 Australia 908,826 14 Turkey 3,943,000
15 Mexico 893,365 15 Vietnam 3,607,000
Gross Domestic Product per capita [2007][12] Gross Domestic Product per capita [2050][13]
GDP per capita (in GDP per capita (in
Rank Country Rank Country
USD) USD)
1 United States 45,790 1 United States 91,683
United 2 South Korea 90,294
2 44,693 United
Kingdom 3 80,234
3 France 41,523 Kingdom
4 Canada 40,222 4 Russia 78,576
5 Germany 40,079 5 Canada 76,002
6 Italy 35,494 6 France 75,253
7 Japan 34,254 7 Germany 68,253
8 South Korea 19,983 8 Japan 66,846
9 Russia 9,115 9 Mexico 63,149
10 Turkey 8,893 10 Italy 58,545
11 Mexico 8,486 11 Brazil 49,759
12 Brazil 6,859 12 China 49,650
13 Iran 3,815 13 Turkey 45,595
14 China 2,485 14 Vietnam 33,472
15 Indonesia 1,918 15 Iran 32,676

Over the next 50 years, Brazil, Russia, India and China—the BRICs economies—could
become a much larger force in the world economy. We map out GDP growth, income
per capita and currency movements in the BRICs economies until 2050.

GRAPHICAL INTERPRITATION:-

1.REAL GDP GROWTH RATE GRAPH OF BRICs AND US, UK AND JAPAN

Defination of real GDP growth rate:-


The list of countries of the world sorted by their gross domestic product (real) growth rate
shows the increase in value of all final goods and services produced within a nation in a given
year -- not taking into account Purchasing power parity and taking into account inflation. It is
a measure of economic development.

Real GDP growth rate of Brazil.

1.00%
2003
4.50% -0.20%
-54.90% 21.62%
2004
1
5.10% 2005
- 2
2006 60.87% 120.00 3
2007 %
4
3.70% -
2.30% 2008 5
2650.00
%

The above graph shows real GDP Growth Rate of Brazil for six consecutive years and graph
‘B’ represent percentage change in each year. We can infer from this graph that the Brazil
economy developing year by year, it reached 4.50% from 1% in six year with 2.73% averge
growth rate.

Real GDP growth rate of Russia.

R e a l G D P G ro w th R a te o f R u s s ia % chnage in rate

200 3
8. 1 0% 4 . 20 % 20.90% 2004
200 4
2005
7 .30 % 200 5 4.69%
-4.48% 2006
6 .7 0 % 200 6 -8.22% 73.81% 2007
6. 70 % 200 7 2008
6. 40 %
200 8

The above graph shows real GDP Growth Rate of Russia for six consecutive years and graph
‘B’ represent percentage change in each year. We can infer from this graph that the Russia
economy developing year by year, it reached 8.10% from 4.20% in six year with 6.56%
average growth rate.

Real GDP growth rate of India


Re al GDP Grow th rate s of india Percent change in rate

2003
4.30% -7.61%
8.50% 2004 9.52% 2003

8.30% 35.48% 2004


2005
93.02% 2005
9.20% 2006
- 2006
6.20%
2007 25.30% 2007
8.40%
2008

The above graph shows real GDP Growth Rate of Russia for six consecutive years and graph
‘B’ represent percentage change in each year. We can infer from this graph that the India
economy developing year by year, it reached 8.50% from 4.30% in six year with 7.48%
average growth rate.

Real GDP growth rate of China.

% change in rate
R eal GD P Grow th rate of C hina

2003
11.40% 8.00% 6.54%
2004
2004 13.75
2005
2005 %
9.10% 4.90% 2006
10.70% 2006 2007
0.00%
9.10% 2007 12.09 2008
10.20% %
2008

The above graph shows real GDP Growth Rate of China for six consecutive years and graph
‘B’ represent percentage change in each year. We can infer from this graph that the China
economy developing year by year, it reached 11.40% from 8.00% in six year with 9.75%
average growth rate.
US r
Real G DP G ro w th rate o f w orld m ajo
co u n tries UK
Japan
1.9 France
11. 4
2.6 G ermany
1.8 34.1
Italy
1.9
2.9
8.1 9.2 Russia
China
2.2 5.4
India
Brazil

The graph above represents the real GDP Growth Rate of world major countries which
represents world economy. It is clear from the graph that BRICs contributes substantial part
in the world economy. Represent by yellow part in above graph.

GDP (purchasing power parity) (Billion $):-

The GDP dollar estimates given on this page are derived from purchasing power parity (PPP)
calculations. Using a PPP basis is arguably more useful when comparing generalized
differences in living standards on the whole between nations because PPP takes into account
the relative cost of living and the inflation rates of the countries, rather than using just
exchange rates which may distort the real differences in income. However, economies do
self-adjust to currency changes over time, and technology intensive and luxury goods, raw
materials and energy prices are mostly unaffected by difference in currency (the latter more
by subsidies), despite being critical to national development, therefore, the sales of foreign
apparel or gasoline per liter in China is more accurately measured by the nominal figure, but
everyday food and haircuts by PPP.

Rank Country GDP (purchasing power parity) (Billion $)


1 United States 13,860
2 China 7,043
3 Japan 4,417
4 India 2,965
5 Germany 2,833
United
6 2,147
Kingdom
7 Russia 2,076
8 France 2,067
9 Brazil 1,838
10 Italy 1,800
The above figure shows the top ten countries by GDP (PPP), which shows the living standard
of the nation and it is clear from the figure tha BRICs posses good living standard in the
world , which shows its economic compatibility

2.Rank of BRICs in World Population:-

Rank Country Population


1,330,044,60
1 China
5
1,147,995,89
2 India
8
United
3 303,824,646
States
4 Indonesia 237,512,355
5 Brazil 191,908,598
6 Pakistan 167,762,040
Banglades
7 153,546,901
h
8 Russia 140,702,094
9 Nigeria 138,283,240
10 Japan 127,288,419

The above graph shows the top ten countries by population number which dipict the market
volume and labor force availability of a country.

3.STOCK MARKET COMPARISION OF BRICs WITH WORLD’S OTHER BIG


MARKET

COMPARISION OF iBOVESPA (INDEX OF BRAZIL) with DOW JONES , NASDAQ


AND S&P FOR 5 YEAR.
COMPARISION OF RTS (INDEX OF RUSSIA) with DOW JONES , NASDAQ AND
S&P FOR 5 YEAR.
COMPARISION OF BSE AND NSE (INDEX OF INDIA) with DOW JONES ,
NASDAQ AND S&P FOR 5 YEAR.
COMPARISION OF SHANGGAI (INDEX OF CHINA) with DOW JONES , NASDAQ
AND S&P FOR 5 YEAR.
UNEMPLOYMENT RATE OF BRIC COUNTRIES

Unemployment rate of Brazil


Un e m p loym e nt r ate of Ru s s ia

14 12.3
11.5 10 8.5
12 9.8 9.6 9.8 8.3
7.6
10 8 6.6
8 5.9
rate 6
6 rate
4 4
2 2
0
0
07
04

05

06

08

2004 2005 2006 2007 2008


20

20

20
20

20

Une m ploym e nt r ate o f India Un e m lo ym e n t r ate o f ch in a

9.5 9.2 12
10 8.9 10.1 9.8
7.8 10 9
7.2
8
8
6
rate 6 4.2 rate
4
4
4
2
2
0 0
2004 2005 2006 2007 2008 2004 2005 2006 2007 2008
The Graphs above shows unemployment rate of BRICs countries, which indicate tha
unemployment is decreasing per year because opportunities increasing in BRICs it make
clear that economy of BRICs countries developing year by year,

Inflation rate of BRICs and other countries


inflation rate

canada 2.4
Brazil 4.1
India 5.9
China 4.7
Russia 11.9
Italy 1.7 inflation rate
Germany 2
France 1.5
Japan 0
UK 2.4
US 2.7

FACT AND PERFORMANCE OF BRICs:-

Population: The four BRIC markets are the largest economies and have some of the largest
populations among emerging-market countries. Companies from BRIC countries have large-
and-competitive domestic markets, meaning they’re already globally competitive when they
venture abroad. The BRICs boast a combined population of 2.85 billion, around 43 per cent
of the present global total. They are believed to have a combined labor force of around 1.5
billion.

Rapid Growth: China and India have two of the fastest growth rates in the world, and that
looks likely to continue. Other rapidly growing countries are much smaller - and more risky.

Natural Resources: While China and India are the major poles of global manufacturing and
service growth, the two other BRICs - Brazil and Russia - are cornucopia of commodities and
energy, which in the past have been inadequately exploited. The escalating energy and
commodity prices of the last five years have brought rapid growth to both countries, enabling
them to develop active consumer sectors with a multitude of invest able companies.

Access to Capital: Brazil recently achieved an investment grade debt rating from Standard
and Poor’s Inc., giving the Latin American country access to the major global pools of
institutional capital, while also significantly lowering the cost of its debt. Russia has built up
foreign-exchange reserves of more than $400 billion, allowing it to break free of a reliance on
foreign capital. China, with a record $1.68 trillion of foreign exchange reserves, has access to
all the capital it can handle.
India may finally have broken out of the cycle of foreign exchange constraints that had
previously prevented rapid growth: With foreign capital of almost $300 billion invested iWith
foreign reserves of $1.68 trillion, China basically has all the capital it needs for the
development projects it has on the drawing board. Bullish on BrazilAs long as world oil
prices keep increasing, or at least remain high, Russian energy companies will keep
generating record profits

On present estimates, some 74 per cent of the Russian population and 85 per cent of the
Brazilian population are urban dwellers. This is not so in the case of India and China. Urban
dwellers represent 30 per cent and 43 per cent respectively of the total population. However,
this is changing rapidly. It has been estimated that in both China and India, approximately 20
million new people are being added to urban populations each year.

Conclusion

If you’re a global investor looking for global profits - including one potential way to double
your money - you need to "Hit the BRICs."The acronym "BRIC" to stand for Brazil, Russia,
India and China, the four emerging markets the investment bank’s strategists believed would
become a dominant part of the world economy in the years ahead .Brazil, China and India -
feature sound economies with powerful growth rates, and stock markets with reasonable
valuations.

In fact, China and India are two of the fastest-growing investable economies on the planet,
and have been transformed into global leaders in both the manufacturing and service sectors.
At the same time, Brazil and Russia each has become a cornucopia of commodities, and are
emerging as global leaders in the white-hot global energy sector.

Russia has the capacity to represent a 21st-century energy superpower, then Brazil must
surely have the potential to realise the same prominence in agricultural commodities and
other raw materials. Brazil is making its presence felt in key materials and agricultural
product markets.Brazil achieve that status in agricultural and bulk commodity markets

We recognizes that Brazil, Russia, India and China have changed their political systems to
embrace global capitalism. China and India, respectively, to be the dominant global suppliers
of manufactured goods and services while Brazil and Russia would become similarly
dominant as suppliers of raw materials. Thus, the BRICs have the potential to form a
powerful economic bloc to the exclusion of the modern-day states currently of "Group of
Eight" status. Brazil is dominant in soy and iron ore while Russia has enormous supplies of
oil and natural gas. India is making flow of skilled people and making it present in
technology.

BRIC all initiated economic or political reforms to allow their countries to enter the world
economy. In order to compete, these countries have simultaneously stressed education,
foreign investment, domestic consumption, and domestic entrepreneurship. According to the
study, India has the potential to grow the fastest among the four BRIC countries over the next
30 to 50 years. A major reason for this is that the decline in working age population will
happen later for India and Brazil than for Russia and China.

Limitations

This research have following limitations

It is based on secondary data

Statically data has been taken from the CIA factbook which ix last update o second october
this year

Some of the data taken 2007 estimation

BIBLIOGRAPHY

www.economywatch.com

www.indexmundi.com

www.financeyahoo.com

www.istockanalyst.com

www.google.com

www.allbussines.com

Goldman sachs reportof 2001


Introduction to the organization

Name of the organization:

SNR Securities ( Franchisee of Angel Broking Ltd.)

Brief Histiory:

SNR Securities & Finance was established & started excellence in


customer relations in year 2000. Today, SNR Securities & Finance has
emerged as one of the most respected Stock-Broking and Wealth
Management Companies in Central India. With its unique retail-focused
stock trading business model, SNR Securities & Finance is committed to
providing ‘Real Value for Money’ to all its clients.

The SNR Securities & Finance is a registered with the Bombay Stock
Exchange (BSE), National Stock Exchange (NSE) and the two leading
Commodity Exchanges in the country: NCDEX & MCX. SNR Securities
& Finance is also registered as a Depository Participant with CDSL.

Major Operations:

Equity Trading

Commodities

Mutual Funds

Life Insurance

IPO

Depository Services

Investment Advisory

Vision statement of company:

“To provide best value of money to its investors through its innovative
products, trading & investment strategies, state of the art technology &
personalized services.”