BRIC s start with a B - Finance - PersonalFinance

O'Neill said that China would become a major economic power,surpassing the United States by 2035 based on the currentspeed of economic growth. The economic power and influenceof BRICs are growing.O'Neill's forecast is logical. The uprising of BRICs is changingthe structure of the world and driving the global economy. Inthe past, the world's economy was dominated by North America,the European Union and Japan. The combined GDP of BRICsin 2005 reached 4.6 trillion dollars, matching the GDP of Japan.BRICs are beginning to dominate the world's economy.China is said to be the most prominent of the four countries.It has maintained an average economic growth rate of over 9.6percent per year over the past 30 years. China's GDP increasedto 2.23 trillion dollars in 2005, which accounts for half the totalof the four countries. The economic growth rates of India, Russiaand Brazil all surpass western countries and are above averagein the world. If the economy of the "golden bricks" of t hesefour countries continues to grow at the current speed, O'Neill'sprediction will come true in the near future.The rise of BRICs is also changing the world order. This ishappening not only because of BRICs' robust economic growthbut also because of its role as an initiator and motivator of thenew international order. The four countries advocate the democratizationof international relations, oppose hegemony and callfor respect for global diversification. As developing nations, theyhave had the opportunity to learn from others and offset theirown weaknesses.The uprising of BRICs is changingthe structure of the world and drivingthe global economy.Members of BRICs are earnestly practicing the style ofinternational relations they have advocated, setting an exampleof friendly cooperation between different cultures. China andRussia, China and India, China and Brazil as well as Russiaand India have all established strategic partnerships. Russia isrich in energy and mineral resourc es, and Brazil has naturaland alternative energy technology. Both China and India aremanufacturing giants, and the relationship between Russia andIndia will doubtlessly be complementary economically.EMBI+ (Emerging Markets Bond Index Plus) risk rating forBrazil has reached another low record of 170 b.p in 03/2007.This reflects the building of confidence by foreign investors inthe Brazilian economic policy, that once again gave proof ofreliability by paying IMFs $15.5 billion debt in advance andraising a $110 billion reserve.The five key themes that we believe will shape the performanceof Brazilian market equities over the medium term are:1. Integration of emerging market labor into the global economy,with rapid growth in working-age populations and averageincomes, leading to the development of large urban consumermarkets. In fact, in our view, enhanced emerging marketlabor supply into the global economy is the most importantdeterminant of the current global boom - much morei mportant than demand side factors, such as home-equitywithdrawal in the US or easy money policy from the Fed.2. A continued boom in infrastructure construction and energydemand in the emerging world and, hence, further gains incommodity prices relative to manufactured goods prices overthe cycle.3. Further reductions in external debt burdens and the trendof real exchange rate appreciation over the cycle, versusdeveloped country peers.4. Increased household and corporate sector leverage, and thedevelopment of capital markets including mortgage markets,pension systems and liquid local currency yield curves.5. Further global industrial and services sector consolidation,characterized by emerging market companies playing anenhanced role in industry leadership.There is clearly still some spacefor profiting with Braziliansecurities, comparing P/E to thatof other countries.We continue to be believe in a 2007 re-acceleration in globalgrowth. Main risks to our benign scenario for equit ies includethe potential escalation of geopolitical tensions, a collapse of theUSD, a sharp rise in US treasury yields and sudden widening ofcorporate debt spreads.The Emerging Markets Bond Index Plus (EMBI+) trackstotal returns for traded external debt instruments in theemerging markets. The instruments include external currencydenominatedBrady bonds, loans and Eurobonds, as well as U.S.Dollar local market instruments.There is clearly still some space for profiting with Braziliansecurities, comparing P/E to that of other countries. Brazil iscurrently rated BB+ but we think it will be considered investmentgrade in 2008/2009.One could invest in thecountry directly through ADRstraded on the NYSE or throughthe Brazilian Exchange TradedFund. Some of biggest BrazilianADRs are:Petrobras (NYSE: PBR)Giant oil company that holdsdeep-sea drilling, ethanol andbiodiesel technology as wellas refineries, oil camps andpetrochemicalsAmbev (NYSE: ABV)Company that joined Interbrewand created InbevVale Do Rio Doce (NYSE:VALE) Giant mining company,recently bought IncoCompanhia Siderrgica Nacional (NYSE: SID)Recently lost Corus auctionBanco Itau (NYSE: ITUB) Commercial bankBanco Unibanco (NYSE: UBB) Commercial bankBanco Bradesco (NYSE: BBD) Commercial bankCEMIG (NYSE: CIG) Utilities CompanyGerdau (NYSE: GGB) Steal maker for building sectorEmbraer (NYSE: ERJ) Aircraft makerSadia (NYSE: SDA) Consumer discretionaryThe XV Pan American Games was held in Brazil in 2007,as well as the Fourth Annual International Traders Conference& Expo Trader Brasil. Speakers such as Jack Schwager, LarryWilliams, John Bollinger and Steve Nison, among others names,have spoken at past Expos. Confirmed speakers for 2007 includedJake Bernstein, Tom McClellan, Ryan Jones, Cornelius Luca,Ron Schelling, Buff Dormeier and many others.

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