In 2001, we heard about the term 'BRIC', when it was first introduced by Jim O’Neill, an economist at Goldman Sachs. About last year, I am sure most of you must have read or heard, the other term, the Fragile Five. Someone from Morgan Stanley decided that due to the various economic changes(negatively), the economics of BRIC is going to be going downhill. So what does this mean to investors?
Let's first look at some of the data from the wordbank, in terms of the current account balance for these countries, in particular, Brazil, Indonesia and India. Why these 3 countries, well, because they are having election this year, and historically has shown that most stock market react positively during the election year.
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| worldbank data |
Above is the chart from the wordbank, Indonesia has the least current deficit follow by Brazil and then India. In another graph below, ...
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