Thursday, April 1, 2010

New Era of Global Investment

Return from the Asian market continues increase on other hand devaluation of dollar arise a fear of capital loss among the investor.
Is it the right time invest in the Asian countries and get the maximum return.
Yes its true that that Asian economy play a major role in the world economy, the boom of Chinese, India, and other east Asian countries attract all foreign investors , and the Yuan, rupees now as gained much value in the world market.
As per the US financial statistic ,Chinese economy now the third largest economy and Indian economy comes in the 6th spot ,but in the future the Chinese economy cross the Us economy and become the biggest economy of the world and India become the second largest the time frame set for this phenomena ,2025 .
The reason behind this prediction is that when the whole world facing the recession only these two Asian giant not affect much by the world recession .Other countries reduce their manpower in factory for cost cutting on the other hand, Indian and China generate new employment opportunity.
If India and China maintain the same economic growth than it’s not a big task for these economy to get this position, but it’s too early to predict that the time come to invest in the Asian market, because we never forget the downfall of Asian Tiger in mid 90s.
The growth of the Asian market total depend on the growth of the Japan as Japan is the largest economy in the Asia, and yen play big role in the Asian market, also the growth of the Asian market directly or indirectly depends on the Japanese economy but there is no sign of revive in the near future by Japanese economy.

But there is second aspect too, one time the total world economy depends on the US for there growth but now the scenario total changed.
After World War 2, dollar become the world currency and the Asian European countries directly or indirectly depends on the US export for getting the foreign currency.
Japan became one of the big economies, because after 2nd World War Japan become the biggest trading partner of US .Demand for the Japanese electronics; cars increase 10 times more than the pre War time.
GM loss there US market but the Japanese Toyota, Honda, Mitsubishi, Nissan get the new market and their demand increase many times than before.
Japanese companies also used the dumping system to increase there market share, and therefore the US market filled with Japanese electronics.

Not only Japan Euopean Union also export the 1/3 portion of total export only to US, Middle countries also export most part of there petroleum to the US.

In the present economic world, China and India’s demand for energy increase multiple times than before, these two countries require energy for their industrialization.
Economic growth of India, China, Egypt and other East Asian countries gives the new market to the world.
Indian become the biggest mall car producer in the world, new middle class population of Indonesia and China demand more luxuries goods for consumption and the demand much higher than the actual production of consumer durable goods ,therefore all big consumes producing companies open there factory in India and China.
Indian stock exchange cross the mark of 16000 points.
Main points to concentrate when invest in any Asian country ----------

1. Security issuing companies liquidity position, that industry capable to return or not.

2. Check the interest rate of that country is it fluctuate according to market or not.

3. Influence of the Govt. on the foreign investment, because the autocrat govt. impose restriction the payment of interest on foreign investment, which done in past by the Malaysian and Indonesia in past.

4. One more thing that high return means high risk but try to invest in AAA rate or in the blue chip companies to reduce the market risk.

5. Last but not the least to use portfolio management than to invest in any single industry.

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