Morgan Stanley favors TIPs over BRICs

Ruchir Sharma, the head of Morgan Stanley’s Emerging Markets favors TIPs over BRICs

Ruchir Sharma, the head of Morgan Stanley’s Emerging Markets says rapid growth can’t be sustained and it’s time to look for the next decade’s big growers for big returns. For the last decade it’s all about “BRICs” or Brazil, Russia, India and China, but after a decade of rapid growth, the world’s most celebrated emerging markets are poised to slow down.

In his interviews, Mr. Sharma, defines a “Breakout Nation” as:
a. a country that is able to beat expectations in terms of growth rate
b. a country that’s able to grow faster than other countries in the same income class per capita income

Here’s the 5-Year GDP (Gross Domestic Product) Forecast of the Breakout Nations

Philippines:  6.0% GDP Growth 2012-16
Indonesia:    6.5% GDP Growth 2012-16
Poland:        4.0% GDP Growth 2012-16

Source: Morgan Stanley Investment Management

Below is the IMF GDP Growth Forecasts

                      2012    2013       2017
Indonesia         6.1%    6.1%       7.0% 

Philippines       4.2%    4.7%       5.0%

Turkey             2.3%    3.2%       4.6%  Source: Breakout nations by Ruchir Sharma

All 3 countries favored by Morgan Stanley also belong to Goldman Sach's Next 11 group of emerging economies.

http://www.pnoytrader.com/2012/05/forget-the-brics-buy-tip/

The Philippines climbs to Number 1

The Philippine Stock Exchange climbs as the top gainer in Asia in 2011, better than the previous year's 3rd best gainer in Asia for 2010.

Next target:  Top gainer worldwide, and we are on our way there with record high after record high being set in 2012.

2010 Performance
Top gainers in Asia
1.  Indonesia
2.  Thailand
3.  The Philippines

2011 Performance
1.  The Philippines (3rd best gainer worldwide)
2.  Indonesia
3.  Malaysia

2012?

The Philippines is one of The Next Eleven

     The Next Eleven (or N-11) are eleven countries — Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, the Philippines, South Korea, Turkey, and Vietnam—identified by Goldman Sachs investment bank as having a high potential of becoming the world's largest economies in the 21st century along with the BRICs (Brazil, Russia, India, China). The bank chose these states, all with promising outlooks for investment and future growth, on December 12, 2005.

     Goldman Sachs used macroeconomic stability, political maturity, openness of trade and investment policies, and the quality of education as criteria. The N-11 paper is a follow-up to the bank's 2003 paper on the four emerging "BRIC" economies, Brazil, Russia, India, and China.

http://www.chicagobooth.edu/alumni/clubs/pakistan/docs/next11dream-march%20'07-goldmansachs.pdf

http://www.ryanallis.com/wp-content/uploads/2008/07/expandingmiddle.pdf

http://www2.goldmansachs.com/our-thinking/brics/brics-reports-pdfs/long-term-outlook.pdf