India: Most Attractive Investment Destination

India has overtaken China as the most attractive investment destination, according to Ernst & Young (EY), with the sharp depreciation in the rupee and opening up of new sectors to foreign players boosting the South Asian nation’s allure. This according to report published on CNBC. Companies are most likely to invest in India, followed by Brazil (2), China (3), Canada (4) and the United States (5), EY’s ninth bi-annual Capital Confidence Barometer – a survey of 1,600 senior executives across more than 70 countries – showed. Other nations in the top 10 are South Africa (6), Vietnam (7), Myanmar (8), Mexico (9) and Indonesia (10).

Sectors with the highest level of possible deals in India include Automotive, Technology, Life Sciences and Consumer Products.

The survey reported that 38 percent of the respondents feel that Merger and Acquisition  volumes in India are expected to improve over the next 12 months, while 30 percent believe that these will remain stable. “The investor outlook for India remains positive, despite the challenges the country’s economy has faced in the recent past. At the same time, the improved condition of the world economy has helped increase confidence amongst deal makers, prompting them to take a bolder stance toward executing transactions,” said Amit Khandelwal, National Leader & Partner — Transaction Advisory Services, EY. “After two years, European countries (Britain and Germany) have made a comeback on the potential investment destinations list for Indian companies,” the report said. In August, the Indian government announced relaxation in foreing investor  norms in many sectors, including multi-brand retail and telecom.

 

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December 11, 2013   No Comments

GDP: Comparing Countries Over Time

The rise of Eastern economies is more properly called the “return” of these erstwhile economic powerhouses, especially China and India.

(Note that Angus Maddison did not seem to value the pre-Columbian nations of the Americas at all in his analysis, so the numbers are perhaps a bit skewed).

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June 6, 2013   No Comments

China, India leading in tourist spending in U.S.

According to Los Angeles Times, visitors from China are now the biggest-spending travelers to the U.S.

In all of the U.S. the average spent as a whole by Chinese visitors is $7,105, by Indian visitors is $6,659, by Brazilian visitors is $5,604, and by Japanese visitors is $4,541.

In California alone, Chinese visitors spend an average $2,932, Brazilian visitors spend an average of $2,404, Indian visitors spend an average $1,983, and visitors from Japan spend $1,969. Roughly 33% of their spending goes towards gifts and souvenirs for family and friends. They spend so much that they helped set a record for spending by foreign visits to the U.S. – $168.1 billion in 2012.

Chinese tourists spend mostly on high-end clothes and accessories featured in American movies because steep Chinese taxes make such brands two to three times more expensive in China. In addition, Chinese tourists stock up on vitamins because they are dubious of supplement quality sold in China.

What this means

When I first began living in California, it was busloads of Japanese tourists that drove retail, recreational and tourist spending. This was followed by investors from Japan starting to buy up hotels, office buildings and more.  In recent years returning Chinese tourists seem to have sparked a mini-real estate boom on the West Coast as homes are swept up in all-cash offers. Expect an Indian wave of real estate investors soon.

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June 6, 2013   No Comments

Labor costs in China are rising

According to an article  on EMSnow.com,  labor costs in China are rising fast due to pressure from human right organizations but also from government regulations to avoid social unrest and rising middle class expectations. CBA forecasts that the costs might keep increasing in the next two or three years. According to the article, electronics manufacturing data shows that there is not an unlimited supply of cheap labor in China, despite the huge population.

Moreover, according to the Economist, the increase of the costs has started in the coastal provinces where factories have clustered. In 2012, an investment bank has released a survey which stated that wages had already risen by 10% that year. According to Dale Weathington from Kolcraft (an American firm that uses China contract manufactures to make baby stollers in southern California), China’s coastal provinces are losing their power to  draw workers out of the hinterland. In previous years 95% of Mr Weathington’s  contract staff returned to work after the Chinese new year, compared to only 85% in 2012.

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May 16, 2013   No Comments

Top Asia Pac investment destinations

According to the FDi report 2013, here are the five destinations which were preferred to invest in Asia-Pacific in 2012.

As you can see, China is the favorite country for FDI, quickly followed by India with a number of projects reaching 704.  In total, the region of Asia-Pacific has attracted 3,740 projects with a 31.7% global market share.

Let’s now take a closer look at the top 5 source countries from Asia-Pacific in 2012.

As you can read, outward FDI from Asia-Pacific decreased in 2012. In total, project numbers fell by 18.52% and the highest decrease happened in India with a percentage of 30.20. Japan is still the dominant investor from the region with 873 projects although it represents a change of -11.91%.

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May 10, 2013   No Comments