Emerging Markets Equity Research 3 July 2008 Adrian Mowat AC Emerging Markets [email protected](852) 2800 - 8599 J.P.Morgan Securities (Asia Pacific ) Limited Deanne Gordon South Africa [email protected](27-21) 712 0875 J.P.Morgan Equities Ltd. Ben Laidler Latin America [email protected](562) 425 5407 Inversiones y Asesorias Chase Manhattan Ltda Peter Westin Russia [email protected](7-495) 967-1771 J.P. Morgan Bank International LLC Rajiv Batra Emerging Markets [email protected](91-22) 6695-3224 J.P. Morgan India Private Limited Rohan Ghalla Emerging Markets [email protected](91-22) 6719-8289 J.P. Morgan India Private Limited Global Emerging Markets Research, Foreign Exchange, and Commodities Joyce Chang Global Emerging Markets [email protected](1-212) 834-4203 J.P. Morgan Securities Inc. Key Changes Index Page # Market Performance 2 Market Drivers 3 2008 Index Targets 4 Cross-section Earnings Growth 5 Earnings Revisions 6,7 Regional Valuation 8 Sector-Country PE Matrix 9 Valuation Distribution 10 Equities relative to Bonds 11 Economic Momentum 12 Policy Rates Forecast 13 Currency Forecasts 14,15 Credit Risk 16 Emerging Market Balance Sheets 17 Emerging Market in Perspective 18 Emerging Capital Market 19 Index Weightings 20 J.P. Morgan Securities (Asia Pacific) Limited http://mm.jpmorgan.com Emerging Markets Strategy Dashboards Emerging Markets Equity Strategy Team Country Recommendation Overweight China, Mexico, Taiwan, Thailand, The Philippines Underweight JPMorgan's revisions to 2008 Real GDP growth forecasts for the US • Full year : 1.7% [1.6%] • 2Q08 : 2.0% [1.0%] • 3Q08 : 1.0% [1.5%] JPMorgan's revisions to 2009 Real GDP growth forecasts • Negative: Latin America 3.9%[4.0%], Brazil 3.8% [4.0%] JPMorgan's revisions to official interest rate forecasts • Turkey: Next move 17 Jul 08 +50bp [3Q08 +50bp ] ; Dec 08 level 17.25% [16.75%] • Peru: Next move 10 Jul 08 +25bp [4Q08 +25bp] ; Dec 08 level 6.25% [6.00%] See page 21 for analyst certification and important disclosures, including non-US analyst disclosures. JPMorgan does and seeks to do business with the companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. India, South Africa Brazil, Korea, Turkey, Poland, Market performance to 2 July 2008 • Year to date: MSCI Emerging Markets -15.1% underperforming MSCI World by 1.5% • Top market YTD in US$ terms: Argentina, Morocco and Israel • Bottom three markets YTD in US$ terms: Turkey, Philippines and India Valuations • MSCI China is currently trading at a 12m fwd PE of 12.8x, which is a premium of 6.7% to MSCI EM, as compared to a premium of 42% at the beginning of the year. • MSCI India is currently trading at a 12m fwd PE of 13.6x, which is a premium of 13.3% to MSCI EM, as compared to a premium of 64% at the beginning of the year.
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Deanne Gordon South Africa [email protected] (27-21) 712 0875 J.P.Morgan Equities Ltd.
Ben Laidler Latin America [email protected] (562) 425 5407 Inversiones y Asesorias Chase Manhattan Ltda
Peter Westin Russia [email protected] (7-495) 967-1771 J.P. Morgan Bank International LLC
Rajiv Batra Emerging Markets [email protected] (91-22) 6695-3224 J.P. Morgan India Private Limited
Rohan Ghalla Emerging Markets [email protected] (91-22) 6719-8289 J.P. Morgan India Private Limited
Global Emerging Markets Research, Foreign Exchange, and CommoditiesJoyce Chang Global Emerging Markets [email protected] (1-212) 834-4203 J.P. Morgan Securities Inc.
Key ChangesIndex Page #Market Performance 2
Market Drivers 3
2008 Index Targets 4
Cross-section Earnings Growth 5
Earnings Revisions 6,7
Regional Valuation 8
Sector-Country PE Matrix 9
Valuation Distribution 10
Equities relative to Bonds 11
Economic Momentum 12
Policy Rates Forecast 13
Currency Forecasts 14,15
Credit Risk 16
Emerging Market Balance Sheets 17
Emerging Market in Perspective 18
Emerging Capital Market 19
Index Weightings 20
J.P. Morgan Securities (Asia Pacific) Limited http://mm.jpmorgan.com
Emerging Markets Strategy Dashboards
Emerging Markets Equity Strategy Team Country Recommendation Overweight
China, Mexico, Taiwan,
Thailand, The Philippines
Underweight
JPMorgan's revisions to 2008 Real GDP growth forecasts for the US• Full year : 1.7% [1.6%] • 2Q08 : 2.0% [1.0%] • 3Q08 : 1.0% [1.5%] JPMorgan's revisions to 2009 Real GDP growth forecasts• Negative: Latin America 3.9%[4.0%], Brazil 3.8% [4.0%]
JPMorgan's revisions to official interest rate forecasts• Turkey: Next move 17 Jul 08 +50bp [3Q08 +50bp ] ; Dec 08 level 17.25% [16.75%]• Peru: Next move 10 Jul 08 +25bp [4Q08 +25bp] ; Dec 08 level 6.25% [6.00%]
See page 21 for analyst certification and important disclosures, including non-US analyst disclosures. JPMorgan does and seeks to do business with the companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.
India, South Africa
Brazil, Korea, Turkey, Poland,
Market performance to 2 July 2008• Year to date: MSCI Emerging Markets -15.1% underperforming MSCI World by 1.5%• Top market YTD in US$ terms: Argentina, Morocco and Israel• Bottom three markets YTD in US$ terms: Turkey, Philippines and India
Valuations• MSCI China is currently trading at a 12m fwd PE of 12.8x, which is a premium of 6.7% to MSCI EM, as compared to a premium of 42% at the beginning of the year.• MSCI India is currently trading at a 12m fwd PE of 13.6x, which is a premium of 13.3% to MSCI EM, as compared to a premium of 64% at the beginning of the year.
Emerging Markets Equity Strategy ResearchJ.P. Morgan Securities (Asia Pacific) Limited: Adrian Mowat (852) 2800-8599 , [email protected] Equities Limited: Deanne Gordon (27-21) 712 0875, [email protected]
Market Performance: MSCI AC Performance by Regions, Countries and Sectors
Change vs dollar 9.5% 4.7% -3.9% 4.0% 1.8% 11.8% -14.3% 5.1% 15.2% -5.9% 14.5% 14.1% 17.4% 3.8% 6.7% 0.2%
Notes Updated as of Jul 2Source: Bloomberg, MSCI.Regional headings first sorted by regional weights in the MSCI EMF and then country headings from left to right by relative weights within the MSCI EMFIndices: Regions in US$ and countries in local currency. Local currency movements against the dollar : appreciation / (depreciation)Country and sector cross sections in italic blue have outperformed their indices by more than 2%. Shaded areas have underperformed their indices by more than 2%.
July 3, 2008
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Emerging Markets Equity Strategy ResearchJ.P. Morgan Securities (Asia Pacific) Limited: Adrian Mowat (852) 2800-8599 , [email protected] Equities Limited: Deanne Gordon (27-21) 712 0875, [email protected]
Outlook: Market DriversGlobal and developed market driversCountry Positive NegativeGlobal Equities discounting US recession Recession like dynamics, credit crunch, inflation, risk aversion, high oil pricesUS Abating recession fears, fiscal package stimulating consumer spending Sub-prime & housing issues, slower earnings growth, high oil prices and inflationEurope Steepening yield curve, cheap valuations, stabilizing credit markets Weakening growth indicators, negative earnings revisions, currency headwinds, high inflation and potential
rate hikeUK Valuations cheap, currency weakness, wage growth under control Potentially weaker consumer, slowdown in housingJapan Corporate pricing power, rising asset prices, new credit cycle, reasonable valuations, interest rate rise Cyclical earnings, recent weak manufacturing and yen volatilityAustralia Strong terms of trade, consumer tax cuts on the way, corporate pricing power Strong currency headwinds for earnings, weak housing, bank funding costs and asset quality issues,
commodity price risk, slowdown in economic activity post rate hikes, high inflationHong Kong China macro (currency revaluation, possible policy loosening), low real rates, reflation continues, strong
corporate earnings growth, China investment flowsProperty price increases concentrated in luxury end of the market, weak US equity outlook
Singapore Return of 'safe haven' status for Singapore, Banks stocks re-rating from better volume / margins, Property launches leading to real estate run up
Emerging Market DriversCountry Positive NegativeChina Headline CPI trending down in 2H08, resumption of RMB appreciation, potential switch in policy focus from
inflation to growth, reform & liberalization on track, lower corporate tax rate, strong domestic demand, strong earnings growth, QDII flows, potential eased loan growth control, liberalization in oil price
Potential further macro tightening, social stability issues, soaring crude oil price, broader and deeper US/global recession, policy mis-step risks, recent weather disruptions
India Long term economic growth, demographics, cash positions with mutual funds and insurance companies, rising wage levels
High inflation, widening current account deficit, depreciating Rupee, politics, expensive valuations, US slowdown impact on Indian IT
Indonesia High soft commodity prices Crowded carry trade, limited policy flexibility, high inflation trending upwards, increase in bond issuance to meet subsidies, interest rate tightening, higher real interest rates
Korea New government potentially pro-growth and possibilities for deregulations in property sector High inflation with slower economic growth, low domestic investment and consumption, fading positive impact from depreciation of KRW on export names
Malaysia Strong domestic demand, strong ringgit, soft commodity play, 9MP pump priming Near term political uncertainty, limited GLC reform, accounting scandals, delays in 9 MP infrastructure projects
Pakistan Fast growing economy, peaking interest rates, cheap valuations, strong ROEs, M&A, privatizations Political risk, infrastructure issues, power deficit, fiscal and current account deficits, high inflation, interest rate tightening
Philippines Fiscal consolidation, OFW remittances and BPO sector to see continued strength, investment cycle upturn Global risks to affect risk appetite on emerging economies, food inflation, low liquidity, political noise, Middle east unrest, interest rate tightening
Taiwan Pro-growth initiatives by new government, closer cross-straits relationships, investment positioning (consensus UW position among FIs)
High emerging market inflation to drag growth, high valuations across non-tech space
Brazil Strong reserve position, twin surpluses, counter-cyclical monetary policy,structural change in many sectors driving growth and equity market deepening.
Czech Republic Domestic demand-led GDP growth Rich valuations. Political uncertainty, inflationHungary Easing of macro fears, bond spread compression HUF becoming more crowded. Lack of real buy-in on reform by Socialist partyMexico Economy resilient to US slowdown, Domestic demand strong, Fiscal spending supportive, Reform agenda
ongoing, De rated market.Still vulnerable to the US cycle and Inflation
Poland Fixed investment growth, high household income Rising input cost, margin pressure, hawkish central bank, local mutual fund redemptionsRussia Abundant domestic liquidity, consumer boom, commodity prices, fixed investment growth, potential oil tax
reformHeavily skewed to commodity exposure, cost and wage growth, interest rate tightening
South Africa SA not over owned by foreigners, infrastructure investment, valuations Rand exchange rate wildcard, viewed as commodity play, tightening monetary policy, electricity outage, political uncertainity, cash flush SA corporate balance sheets
Turkey Valuations Politics, central bank easing fully priced in to equity markets, declining earnings expectations, rising inflation expectations, large current account deficit
Source: JPMorgan. Updated as of Jul 2008
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Emerging Markets Equity Strategy ResearchJ.P. Morgan Securities (Asia Pacific) Limited: Adrian Mowat (852) 2800-8599 , [email protected] Equities Limited: Deanne Gordon (27-21) 712 0875, [email protected]
Outlook: December 2008 Index TargetsLocal Market Index MSCI Local Index Valuations (PE)
Updated as of Jul 2Source: MSCI, Datastream, JPMorgan estimatesNote: Local Index used shown in brackets. Index targets for US from JPMorgan's US Equity Strategy team and for UK, MSCI Europe and MSCI EMU from JPMorgan's European Equity Strategy team.# Note that we have not included the forecast 10% move in the Renminbi in the MSCI China forecast.## Dividend yield is time-weighted to arrive at expected 2006 total USD returns. * Euro used for forex in MSCI Europe and MSCI EMU. ~ Consensus forecast is used for Pakistan Rupee** No index target. The number herein refers to current index level.*** Emerging Market index target derived based on weighted calculations of individual countries' target returns^ Forex return for Russia is zero as shares are traded in US$.
Index used
MSCI EMU
FTSE 100TOPIX
STIHSI
MSCI Europe
ASX 200
S&P 500
July 3, 2008
Current Index Level
Index Forex
MSCI US $ IndexForex
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Emerging Markets Equity Strategy ResearchJ.P. Morgan Securities (Asia Pacific) Limited: Adrian Mowat (852) 2800-8599 , [email protected] Equities Limited: Deanne Gordon (27-21) 712 0875, [email protected]
Profit Outlook: Earnings Forecasts Matrix for Countries and SectorsWeight EPS Growth Weight EPS Growth Weight EPS Growth
EM (%) JPMorgan Consensus China (%) JPMorgan Consensus India (%) JPMorgan ConsensusMedian 2008 2009 Median 2008 2009 Median 2008 2009 Median 2008 2009 Median 2008 2009 Median 2008 2009
Median 2008 2009 Median 2008 2009 Median 2008 2009 Median 2008 2009 Median 2008 2009 Median 2008 2009Total Market 100.0 12.1 8.2 15.7 9.9 5.1 12.8 Total Market 100.0 -1.2 2.6 8.1 1.4 2.5 12.3 Total Market 100.0 20.2 17.1 9.8 16.8 114.3 8.7Consumer Discretionary 2.7 12.1 12.1 17.6 2.5 2.5 15.7 Consumer Discretionary 2.2 -3.3 -1.6 18.6 1.3 0.6 15.8 Consumer Discretionary 2.6 21.2 21.3 11.1 23.0 23.3 12.2Consumer Staples 0.0 NA NA NA NA NA NA Consumer Staples 1.5 22.7 22.7 11.5 18.3 18.3 11.3 Consumer Staples 1.6 0.9 0.9 8.2 70.6 70.6 40.3Energy 0.0 NA NA NA NA NA NA Energy 0.9 -24.6 -24.6 3.4 -24.6 -24.6 3.4 Energy 44.8 1.0 13.7 15.7 2.5 11.0 7.9Financials 44.5 9.9 -0.1 26.2 9.9 -2.7 19.9 Financials 18.4 15.7 4.0 12.9 17.1 11.8 24.1 Financials 32.2 14.9 30.0 13.4 15.1 -301.2 14.9Health Care 0.0 NA NA NA NA NA NA Health Care 0.0 NA NA NA NA NA NA Health Care 0.0 NA NA NA NA NA NAIndustrials 9.9 5.1 8.4 22.1 7.8 12.1 10.2 Industrials 3.4 5.4 3.2 11.1 5.4 -10.8 13.3 Industrials 1.4 136.7 136.7 -22.7 136.7 136.7 -22.7Information Technology 0.0 NA NA NA NA NA NA Information Technology 54.2 -6.5 3.6 11.2 -3.3 1.4 14.3 Information Technology 0.0 NA NA NA NA NA NAMaterials 0.0 NA NA NA NA NA NA Materials 14.5 -1.8 -3.0 -6.9 1.6 1.0 -1.3 Materials 7.4 -7.9 -13.5 -12.2 -8.4 -13.7 -3.4Telecommunication Services 33.5 13.3 12.6 14.4 10.4 9.8 12.1 Telecommunication Services 5.0 17.1 22.9 9.3 9.4 17.8 7.8 Telecommunication Services 8.0 55.5 41.2 -7.0 35.7 25.1 6.9Utilities 9.5 37.5 19.1 -21.8 38.6 9.0 -9.0 Utilities 0.0 NA NA NA NA NA NA Utilities 2.0 13.8 13.1 -7.8 6.9 6.1 -6.0
Median 2008 2009 Median 2008 2009 Median 2008 2009 Median 2008 2009 Median 2008 2009 Median 2008 2009Total Market 100.0 - - - 23.5 25.3 12.0 Total Market 100.0 - - - 10.7 -1.4 14.8 Total Market 100.0 - - - 17.3 2.1 19.1Consumer Discretionary 0.8 - - - NA NA NA Consumer Discretionary 4.3 - - - 17.7 30.9 16.0 Consumer Discretionary 4.7 - - - 15.2 -27.0 22.7Consumer Staples 0.5 - - - 44.7 44.7 32.7 Consumer Staples 0.0 - - - NA NA NA Consumer Staples 10.9 - - - 20.0 16.7 23.9Energy 62.9 - - - 16.1 28.7 11.4 Energy 14.9 - - - -15.0 -12.5 0.7 Energy 6.4 - - - -17.2 -17.2 5.3Financials 9.7 - - - 34.0 34.0 24.2 Financials 51.6 - - - 10.7 4.4 31.3 Financials 41.6 - - - 15.6 1.4 19.5Health Care 0.5 - - - NA NA NA Health Care 0.9 - - - 68.8 68.8 48.2 Health Care 0.0 - - - NA NA NAIndustrials 0.0 - - - NA NA NA Industrials 5.4 - - - 38.9 61.2 30.4 Industrials 13.2 - - - 2.9 -6.7 15.7Information Technology 0.0 - - - NA NA NA Information Technology 2.3 - - - 4.8 4.8 6.5 Information Technology 0.0 - - - NA NA NAMaterials 14.9 - - - 59.8 6.6 6.8 Materials 9.6 - - - -14.5 -14.5 -11.1 Materials 9.1 - - - 43.0 39.3 40.0Telecommunication Services 10.8 - - - 22.6 28.6 16.9 Telecommunication Services 11.0 - - - 9.0 9.0 5.1 Telecommunication Services 14.1 - - - 39.6 39.6 9.6Utilities 0.0 - - - NA NA NA Utilities 0.0 - - - NA NA NA Utilities 0.0 - - - NA NA NA
Source: I/B/E/S, MSCI, JPMorgan. Updated as Jul 2008Note: Average earnings growth calculated based on earnings aggregate of MSCI contituents. Consensus numbers are used for stocks not covered by JPMorgan under JPMorgan forecasts calculation. Median numbers are for the year 2008.
July 3, 2008
5
Emerging Markets Equity StrategyJ.P. Morgan Securities (Asia Pacific) Limited: Adrian Mowat (852) 2800-8599 , [email protected] Equities Limited: Deanne Gordon (27-21) 712 0875, [email protected]
Profit Outlook: Changes in 2008 and 2009 EPS Forecasts
Source: I/B/E/S Updated as of Jul 2Notes: The dashboard aims to show changes in earnings expectations. All year ends are for December. EPS figures are normalized, starting at 100 on base date Feb 2007 for ease of comparison. These numbers are directly from IBES aggregate and may differ from those in the growth expectations pages where adjustments are made for exceptional items.
July 3, 2008
World EM Asia EM Europe
China
Brazil Russia
Emerging Markets (EM)
KoreaEM Latin America
South Africa Mexico
Taiwan
95
100
105
110
115
120
Feb-07 Jun-07 Oct-07 Feb-08 Jun-08
2008
2009
95
100
105
110
115
120
125
130
Feb-07 Jun-07 Oct-07 Feb-08 Jun-08
2008
2009
99
104
109
114
119
124
129
Feb-07 Jun-07 Oct-07 Feb-08 Jun-08
2008
2009
96
104
112
120
128
136
144
Feb-07 Jun-07 Oct-07 Feb-08 Jun-08
2008
2009
100
110
120
130
140
Feb-07 Jun-07 Oct-07 Feb-08 Jun-08
2008
2009
80
90
100
110
120
130
140
Feb-07 Jun-07 Oct-07 Feb-08 Jun-08
2008
2009
80
90
100
110
120
130
Feb-07 Jun-07 Oct-07 Feb-08 Jun-08
2008
2009
95
105
115
125
135
145
155
Feb-07 Jun-07 Oct-07 Feb-08 Jun-08
2008
2009
90
95
100
105
110
115
120
Feb-07 Jun-07 Oct-07 Feb-08 Jun-08
2008
2009
95
100
105
110
115
120
Feb-07 Jun-07 Oct-07 Feb-08 Jun-08
2008
2009
95
105
115
125
135
145
Feb-07 Jun-07 Oct-07 Feb-08 Jun-08
2008
2009
90
100
110
120
130
140
150
Feb-07 Jun-07 Oct-07 Feb-08 Jun-08
2008
2009
6
Emerging Markets Equity StrategyJ.P. Morgan Securities (Asia Pacific) Limited: Adrian Mowat (852) 2800-8599 , [email protected] Equities Limited: Deanne Gordon (27-21) 712 0875, [email protected]
Profit Outlook: Changes in 2008 and 2009 EPS Forecasts
Updated as of Jul 2Source: I/B/E/SNotes: The dashboard aims to show changes in earnings expectations. All year ends are for December. EPS figures are normalized, starting at 100 on base date Feb 2006 for ease of comparison. These numbers are directly from IBES aggregate and may differ from those in the growth expectations pages where adjustments are made for exceptional items.
July 3, 2008
India Israel Poland
Indonesia
Hungary
Malaysia
TurkeyChile
Philippines
Thailand
Czech. Republic Argentina
100
105
110
115
120
125
Feb-07 Jun-07 Oct-07 Feb-08 Jun-08
2008
2009
95
98
101
104
107
110
Feb-07 Jun-07 Oct-07 Feb-08 Jun-08
2008
2009
95
105
115
125
135
145
155
Feb-07 Jun-07 Oct-07 Feb-08 Jun-08
2008
2009
90
100
110
120
130
140
Feb-07 Jun-07 Oct-07 Feb-08 Jun-08
2008
2009
90
100
110
120
130
Feb-07 Jun-07 Oct-07 Feb-08 Jun-08
2008
2009
90
95
100
105
110
115
120
125
Feb-07 Jun-07 Oct-07 Feb-08 Jun-08
2009
2008
96
98
100
102
104
106
108
110
112
Feb-07 Jun-07 Oct-07 Feb-08 Jun-08
2008
2009
95
100
105
110
115
120
Feb-07 Jun-07 Oct-07 Feb-08 Jun-08
2008
2009
95
105
115
125
135
Feb-07 Jun-07 Oct-07 Feb-08 Jun-08
2008
2009
38
58
78
98
118
138
158
Feb-07 Jun-07 Oct-07 Feb-08 Jun-08
2008
2009
92
98
104
110
116
122
128
134
140
Feb-07 Jun-07 Oct-07 Feb-08 Jun-08
2008
2009
80
90
100
110
120
130
Feb-07 Jun-07 Oct-07 Feb-08 Jun-08
2008
2009
7
Emerging Markets Equity Strategy ResearchJ.P. Morgan Securities (Asia Pacific) Limited: Adrian Mowat (852) 2800-8599,[email protected] Equities Limited: Deanne Gordon (27-21) 712 0875, [email protected]
Value: Regional and Countries Valuations
2-Jul-08 Avg. Current 12m Prospective Avg. Current Prospective Avg. Current ProspectiveMSCI Index 2006 Trailing Fwd 2007 2008E 2009E 2006 Trailing 2007 2008E 2009E 2006 Trailing 2007 2008E 2009E 2006 2007 2008E 2009E
Source: I/B/E/S, MSCI, JPMorgan* Market forecast numbers are derived from bottom-up calculations of each individual MSCI constituents using I/B/E/S estimates. IBES Estimates are not available for Morocco, Jordan, Peru and Colombia. Updated as of Jul 2For all other markets, forecast numbers are derived from bottom-up calculations of each individual MSCI constituents using JPM estimates for covered stocks and I/B/E/S estimates for the rest.
July 3, 2008
P/E (x) Div. Yield (%) P/BV (x) ROE (%)
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Emerging Markets Equity Strategy ResearchJ.P. Morgan Securities (Asia Pacific) Limited: Adrian Mowat (852) 2800-8599,[email protected] Equities Limited: Deanne Gordon (27-21) 712 0875, [email protected]
Consumer Discretionary 10.2 NA 9.0 10.6 14.8 7.2 NA NA 19.9 16.4 19.2 14.5 16.6 NAConsumer Staples 12.9 23.8 10.9 NA NA 14.7 NA NA NA 17.8 17.7 18.4 14.7 NAEnergy 9.1 8.9 10.6 NA 9.3 7.0 9.8 NA NA 12.6 12.9 NA NA 10.9Financials 8.4 12.0 7.5 8.6 11.2 5.0 7.1 10.8 12.7 11.6 11.4 15.4 NA 7.6Health Care 14.6 NA 10.8 NA 22.0 NA 13.6 NA 18.5 NA NA NA NA NAIndustrials 12.5 NA 10.8 12.3 18.0 10.7 NA 16.8 NA 14.4 14.1 15.4 14.2 NAInformation Technology 13.3 NA 8.0 14.7 16.6 NA NA NA NA 20.2 20.2 NA NA NAMaterials 11.1 10.4 12.2 12.9 6.7 9.1 NA 9.5 11.5 11.4 12.0 8.8 12.5 6.3Telecommunication Services 13.3 14.4 13.5 11.9 11.5 8.8 9.6 13.7 14.3 12.9 11.1 13.7 12.8 10.0Utilities 14.3 NA NA NA NA NA NA NA 14.3 12.6 10.9 NA 20.1 NAMarket Aggregate 10.1 9.8 10.3 12.2 10.6 6.8 8.6 12.8 14.4 12.7 12.5 13.2 15.4 10.1Sector Neutral* 10.9 12.2 10.3 11.8 11.9 8.7 10.6 12.0 12.9 13.6 13.6 12.9 12.6 10.2
Source: IBES, MSCI, JPMorgan. Note: PEs are derived from bottom-up calculations of each individual MSCI constituents using JPM estimates for covered stocks and IBES estimates for the rest.*Sector neutral PE are calcuated by using sector weights of MSCI EM and sector PE of respective markets (MSCI EM sector PE used where country sector does not exist) Updated as of Jul 2
July 3, 2008
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Emerging Markets Equity Strategy ResearchJ.P. Morgan Securities (Asia Pacific) Limited: Adrian Mowat (852) 2800-8599,[email protected] Equities Limited: Deanne Gordon (27-21) 712 0875, [email protected]
Value: Distribution Tables for PE, PBR, DY and RoE
2008E: Price to Earnings Ratio (x) 2008E: Price to Book Value Ratio (x)Weighted Quartiles Weighted QuartilesAverage Min Lower Median Higher Max Average Min Lower Median Higher Max
2008E: Dividend Yield (%) 2008E: Return on Equity (%)Weighted Quartiles Weighted QuartilesAverage Min Lower Median Higher Max Average Min Lower Median Higher Max
Source: Datastream, IBES, MSCI, JPMorgan. Updated as of Jul 2Note: Weighted average numbers based on aggregate of MSCI contituents. Consensus numbers are used for stocks not covered by JPMorgan. * only consensus numbers are used
July 3, 2008
10
Emerging Markets Equity Strategy ResearchJ.P. Morgan Securities (Asia Pacific) Limited: Adrian Mowat (852) 2800-8599 , [email protected] Equities Limited: Deanne Gordon (27-21) 712 0875, [email protected]
Value: Equities relative to Bonds
Country 1-month 3-month 6-month 12-month 36-month 36-month annualised
Source: Bloomberg, JPMorgan, DataStream, MSCI, IBES Note: GBI-EM Bond Maturity and Yield to Maturity are used for each country. Updated as of Jul 2
July 3, 2008
Relative outperformance of equities versus bonds by country (%)
Relative value of equities versus bonds by country
For 'DDM Implied Growth', we use a dividend discount model based on expected payout ratios for 2008 (except Colombia and Peru where we use current trailing payout ratio)
Perpetual Implied Growth Rates are calculated based on the Gordon Growth Model:
G= R - D/V
G= Implied Growth RateR= Required Growth Rate (Risk free rate + Equity Risk Premium)D= Index DividendV= Index Value
Note: Equity risk premium of 4%. Risk free rates are 10-year benchmark or nearest equivalent.
JPMorgan's GBI - EM bond indices track local currency government bonds issued by emerging economies.
The indices are easily replicable and represent the local bond portfolio that can be accessed by an international investor.
For more information on these indices please visit www.morganmarkets.com or contact Gloria Kim at [email protected]
The table shows the difference between the MSCI equity benchmark returns in local currency and the GBI - EM benchmark returns for each country.
Positive numbers indicate outperformance by equities.
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Emerging Markets Equity Strategy ResearchJ.P. Morgan Securities (Asia Pacific) Limited: Adrian Mowat (852) 2800-8599 , [email protected] Equities Limited: Deanne Gordon (27-21) 712 0875, [email protected]
Economic Forecasts: Changes in Real GDP Forecasts
Real GDP Growth (% Y/Y) Change in Forecasts Past 3 months (%) Economic Momentum Inflation JPM
2008E 2009E 2008E 2009E 2008E 2009E 2008E 2009E 2Q 08E 3Q 08E 4Q 08E 1Q 09E 2008E 2009ES Korea 4.4 5.0 4.6 5.0 0.0 0.0 -0.1 0.1 2.5 3.5 4.5 5.5 4.3 3.4Taiwan 4.3 5.0 4.4 5.0 0.8 0.5 0.5 0.4 0.5 5.8 6.5 4.8 3.4 3.0China 10.5 9.8 10.0 9.5 0.0 0.0 -0.1 0.0 10.8 11.7 10.2 9.1 7.0 5.0Brazil 4.4 3.8 4.7 4.0 0.0 -0.2 0.2 0.0 3.0 4.0 4.0 3.8 5.9 6.0Russia 7.8 7.0 7.1 6.5 0.7 0.7 0.3 0.0 10.5 3.0 16.0 0.0 13.9 11.5South Africa 3.3 3.5 3.7 3.9 -0.5 -0.5 -0.7 -0.6 3.8 1.5 1.1 4.5 11.9 9.2Mexico 2.6 4.0 2.5 3.1 0.0 -0.5 -0.4 -0.6 1.0 2.0 3.0 4.9 4.5 3.5India 7.0 8.0 7.7 8.0 0.0 0.0 -0.4 -0.2 6.4 6.0 5.6 5.9 8.3 5.8Malaysia 5.2 5.5 5.8 5.8 0.5 0.2 0.2 0.0 2.4 2.0 2.4 7.4 5.8 4.7Israel na na 4.5 4.5 na na 0.0 0.0 na na na na na naPoland 5.8 5.2 5.3 5.0 0.2 -0.1 -0.2 0.0 5.0 4.5 5.5 5.3 4.3 3.6Chile 3.5 3.5 4.2 4.7 0.0 -1.5 -0.1 -0.2 5.0 1.0 5.0 4.0 7.6 3.8Turkey 3.8 5.2 3.8 4.8 -0.6 -0.8 -1.1 -0.5 0.0 -1.2 6.6 8.2 10.5 8.2Thailand 4.6 5.0 5.0 5.2 0.0 0.0 0.2 0.2 3.0 5.0 6.0 4.5 6.1 5.0Indonesia 5.3 5.2 5.9 6.1 0.3 0.0 -0.2 -0.1 5.0 3.0 4.5 5.0 11.2 9.0Hungary 2.0 2.8 2.0 2.8 0.0 0.0 -0.3 -0.1 3.0 2.8 2.9 2.8 6.7 4.4Egypt na na 5.2 na na na na na na na na na na naCzech Republic 5.0 4.5 4.6 4.9 0.0 -0.3 -0.2 0.0 5.1 5.0 5.0 4.2 6.8 3.4Argentina 6.5 3.0 6.2 3.5 0.0 0.0 0.2 -1.0 8.2 2.8 6.1 2.8 9.0 9.4Peru 8.5 6.0 7.7 6.4 0.8 0.0 0.7 0.0 7.4 5.9 4.8 6.5 5.1 3.0Philippines 4.0 4.5 5.5 6.1 0.0 0.0 -0.4 0.4 2.0 4.0 4.0 4.0 7.7 4.8Morocco na na 4.4 na na na na na na na na na na naColombia 5.0 5.0 5.5 5.1 0.0 0.0 0.0 0.1 5.9 5.5 5.1 4.5 6.1 4.3Pakistan 5.5 5.5 6.3 5.9 -1.5 na 0.0 0.0 na na na na 12.5 8.5Jordan na na 5.0 na na na na na na na na na na na
Source: JPMorgan estimates, Bloomberg Updated as of Jul 2Note: Consensus estimates for Jordan, Egypt, Pakistan and Israel sourced from WES and Morocco from EIU
Consensus JPM
July 3, 2008
(% Y/Y)Consensus GDP SAAR
-2.0
-1.0
0.0
1.0
Peru
Russ
ia
Polan
d
China
Czec
hRe
publi
cAr
genti
na
Mexic
o
Turke
y
Hung
ary
Taiw
an
S Ko
rea
Braz
ilSo
uthAf
rica
Thail
and
Colom
bia
Indon
esia
Malay
sia
India
Chile
Philip
pines
2008E GDP Growth: JPM Minus Consensus Change in Consensus Forecasts for 2008E GDP over last 3 months (%)
-1.0-0.6-0.20.20.61.0
Peru
Taiw
an
Russ
ia
Thail
and
Malay
sia
Braz
il
Arge
ntina
Colom
bia
China
Chile
S Ko
rea
Czec
hRe
publi
c
Indon
esia
Polan
d
Hung
ary
Mexic
o
India
Philip
pines
South
Afric
a
Turke
y
12
Emerging Markets Equity Strategy ResearchJ.P. Morgan Securities (Asia Pacific) Limited: Adrian Mowat (852) 2800-8599 , [email protected] Equities Limited: Deanne Gordon (27-21) 712 0875, [email protected]
July 3, 2008
Economic Forecasts: Policy Rate Trend and ForecastsPolicy Rate
Country Official interest rate 3Q'07 4Q'07 1Q'08 Current 2Q'08F 3Q'08F 4Q'08F 1Q'09F Last Change Next Change
Developed Markets
United States Federal funds rate 4.75 4.25 2.25 2.00 2.00 2.25 2.25 2.50 30 Apr 08 (-25bp) 16 Sep 08 (+25bp)
Euro Area Refi Rate 4.00 4.00 4.00 4.00 4.00 4.25 4.25 4.25 6 Jun 07 (+25bp) 3 Jul 08 (+25bp)
Japan Overnight Call Rate 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 21 Feb 07 (+25bp) Jun 09 (+25bp)
Latin America
Brazil SELIC overnight rate 11.25 11.25 11.25 12.25 12.25 13.25 14.25 14.75 4 Jun 08 (+50bp) 23 Jul 08 (+50bp)
Mexico Repo rate 7.25 7.50 7.50 7.75 7.75 8.00 8.00 8.00 20 Jun 08 (+25bp) 15 Aug 08 (+25bp)
JPMorganJPMorgan forecast:end Sep 08: 3.60end Dec 08: 3.65end Mar 09: 3.70
Thai Baht (THB)
Chinese Yuan Renminbi (CNY)
10.2
10.5
10.8
11.1
11.4
11.7
Dec 04 Nov 05 Oct 06 Sep 07 Jul 08 Jun 09
JPMorgan
Consensus
JPMorgan forecast:end Sep 08: 10.6end Dec 08: 10.6end Mar 09: 10.6
5.5
6.0
6.5
7.0
7.5
8.0
8.5
9.0
Dec 04 Nov 05 Oct 06 Sep 07 Jul 08 Jun 09
Consensus
JPMorganJPMorgan forecast:end Sep 08: 8.60end Dec 08: 8.30end Mar 09: 8.00
283032343638404244
Dec 04 Nov 05 Oct 06 Sep 07 Jul 08 Jun 09
Consensus
JPMorgan
JPMorgan forecast:end Sep 08: 34.0end Dec 08: 33.0end Mar 09: 32.0
1.92.12.32.52.72.93.13.33.53.7
Dec 04 Nov 05 Oct 06 Sep 07 Jul 08 Jun 09
JPMorgan
JPMorgan forecast:end Sep 08: 2.13end Dec 08: 2.23end Mar 09: 2.34
Consensus
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
Dec 04 Nov 05 Oct 06 Sep 07 Jul 08 Jun 09
JPMorgan forecast:end Sep 08: 1.30end Dec 08: 1.27end Mar 09: 1.24
Consensus
JPMorgan425
450
475
500
525
550
575
600
Dec 04 Nov 05 Oct 06 Sep 07 Jul 08 Jun 09
JPMorgan
Consensus
JPMorgan forecast:end Sep 08: 520end Dec 08: 520end Mar 09: 520
14
Emerging Markets Equity Strategy ResearchJ.P. Morgan Securities (Asia Pacific) Limited: Adrian Mowat (852) 2800-8599 , [email protected] Equities Limited: Deanne Gordon (27-21) 712 0875, [email protected]
Economic Forecasts: Currency Movements and Forecasts
Source: Datastream, JPMorgan estimates, Bloomberg. Updated as of Jul 2
July 3, 2008
Indonesian Rupiah (IDR) Hungarian Forint (HUF)
150
160
170
180
190
200
210
220
230
Dec 04 Nov 05 Oct 06 Sep 07 Jul 08 Jun 09
JPMorgan forecast:end Sep 08: 158end Dec 08: 160end Mar 09: 166
JPMorgan
Consensus
14
16
18
20
22
24
26
Dec 04 Nov 05 Oct 06 Sep 07 Jul 08 Jun 09
Consensus
JPMorgan
JPMorgan forecast:end Sep 08: 15.2end Dec 08: 15.3end Mar 09: 15.5
Czech Koruna (CZK) Argentinian Peso (ARS)
Peruvian Nuevo Sol (PEN) Philippine Peso (PHP)
2.8
2.9
3.0
3.1
3.2
3.3
3.4
3.5
Dec 04 Nov 05 Oct 06 Sep 07 Jul 08 Jun 09
JPMorganJPMorgan forecast:end Sep 08: 3.20end Dec 08: 3.25end Mar 09: 3.30
Consensus
Colombian Peso(COP)
2.5
2.8
3.0
3.3
3.5
3.8
Dec 04 Nov 05 Oct 06 Sep 07 Jul 08 Jun 09
JPMorgan
Consensus
JPMorgan forecast:end Sep 08: 2.80end Dec 08: 2.75end Mar 09: 2.75
Expected % Gain vs USD till December 2008 (JPM) Expected % Loss vs USD till December 2008 (JPM)
-12
-8
-4
0
KRW
CZK
ZAR
RUB
TRL
CLP
INR
MXN
JPY
EUR
PLN
HUF
ILS ARS
BRL
Source: Datastream, JPMorgan estimates
0
2
3
5
6
8
9
CNY
MYR
TWD
THB
IDR
PHP
COP
Source: Datastream, JPMorgan estimates
1,600
1,800
2,000
2,200
2,400
2,600
2,800
3,000
Dec 04 Nov 05 Oct 06 Sep 07 Jul 08 Jun 09
JPMorgan
JPMorgan forecast:end Sep 08: 1700end Dec 08: 1750end Mar 09: 1775
Consensus
8,500
9,000
9,500
10,000
10,500
11,000
Dec 04 Nov 05 Oct 06 Sep 07 Jul 08 Jun 09
Consensus
JPMorgan
JPMorgan forecast:end Sep 08: 9400end Dec 08: 9200end Mar 09: 9100
36
40
44
48
52
56
60
Dec 04 Nov 05 Oct 06 Sep 07 Jul 08 Jun 09
Consensus
JPMorgan
JPMorgan forecast:end Sep 08: 45.8end Dec 08: 45.0end Mar 09: 44.0
15
Emerging Markets Equity Strategy ResearchJ.P. Morgan Securities (Asia Pacific) Limited: Adrian Mowat (852) 2800-8599 , [email protected] Equities Limited: Deanne Gordon (27-21) 712 0875, [email protected]
Economic Forecasts: Credit Risk External (2008E) Fiscal Position Sovereign Ratings (Long Term Foreign Debt)
Foreign CurrentReserves Account 2008F** 2008F** 2008F** 2009F** 2008F** 2009F** Moody's S & P(US$bil) %GDP (US$bil) %GDP % GDP % GDP % GDP % GDP Rating Action Date Rating Action Date
Korea 262.4 -0.6 293.3 29.4 1.0 0.5 30.0 31.7 A2 Upgrade, stable 25-Jul-07 A Affirmed, stable 12-Oct-07Taiwan 277.8 9.1 62.0 14.6 -1.0 -1.0 37.0 37.5 Aa3 Affirmed, stable 24-Jan-02 AA- Affirmed, O/L (-) 15-Nov-07China 1589.8 7.2 368.2 8.8 -0.8 -1.0 26.4 26.5 A1 Upgrade, stable 26-Jul-07 A Upgrade, stable 27-Jul-06Brazil 192.9 -1.3 217.5 13.8 -2.2 -2.0 67.8 69.0 Ba1 Upgraded, O/L stable 23-Aug-07 BB+ Afirmed, O/L (+) 21-Dec-07Russia 476.7 2.2 433.3 25.9 3.5 2.0 5.5 5.2 Baa2 Upgrade, stable 25-Oct-05 BBB+ Affirmed, O/L stable 21-Aug-07South Africa 30.2 -6.7 65.9 22.5 0.3 0.4 24.8 22.7 Baa1 O/L changed to (+) 05-Jun-07 BBB+ Affirmed, stable 12-Jul-07Mexico 81.4 -1.9 165.0 17.5 0.0 0.0 26.3 26.1 Baa1 Upgrade, stable 06-Jan-05 BBB+ Upgrade, O/L stable 08-Oct-07India 291.3 -1.7 203.8 15.0 -3.0 -3.3 64.9 64.1 Baa3 Upgrade, stable 22-Jan-04 BBB- Upgrade, O/L stable 30-Jan-07Malaysia 116.3 12.0 52.1 23.6 -3.3 -3.1 57.3 55.8 A3 Upgrade, stable 16-Dec-04 A- O/L changed to (+), Affirmed 31-Jul-07Israel* 26.2 2.1 na na na na na na A2 O/L changed to (+) 10-May-06 A Upgrade, O/L (+) 27-Nov-07Poland 72.5 -5.7 206.3 39.7 -3.2 -3.2 47.7 48.1 A2 Affirmed, stable 18-Sep-03 A- Upgrade, O/L stable 29-Mar-07Chile 17.2 0.2 44.8 21.9 5.0 3.0 13.6 11.9 A2 Upgrade, stable 07-Jul-06 A+ Upgrade, O/L stable 18-Dec-07Turkey 117.7 -5.4 237.4 29.7 -1.7 -1.0 39.2 37.2 Ba3 Affirmed, stable 09-May-07 BB- Affirmed, O/L stable 29-Aug-07Thailand 97.8 1.1 52.0 18.1 -1.8 -1.8 29.1 31.2 Baa1 Affirmed, stable 20-Sep-06 BBB+ Affirmed, O/L stable 10-Jul-07Indonesia 57.1 1.2 124.8 26.6 -2.0 -2.0 29.5 30.0 Ba3 Upgrade, stable 18-Oct-07 BB- Affirmed, O/L stable 24-Sep-07Hungary 24.5 -5.3 139.9 85.6 -4.5 -3.8 66.2 65.8 A2 Downgrade, stable 22-Dec-06 BBB+ Affirmed, O/L stable 24-Sep-07Egypt* 17.2 -0.4 na na na na na na Ba1 Affirmed, stable 13-May-99 BB+ Affirmed, O/L stable 10-Dec-07Czech Republic 37.0 -1.9 84.4 36.9 -2.0 -2.5 na na A1 Affirmed, O/L changed to (+) 30-Mar-06 A Upgrade, O/L stable 02-Oct-07Argentina 49.3 4.2 115.9 38.0 1.3 1.1 48.6 45.7 B3 O/L changed to (+) 16-Jan-07 B+ Affirmed, O/L stable 25-Sep-07Peru 32.3 0.2 26.5 19.9 0.6 0.5 22.3 21.4 Ba2 O/L changed to stable 16-Jul-07 BB+ O/L changed to (+), Affirmed 23-Jul-07Philippines 36.0 3.3 52.3 29.3 -0.2 -0.3 57.0 50.4 B1 O/L changed to (+), Affirmed 25-Jan-08 BB- Affirmed, O/L stable 14-Sep-07Morocco* 13.6 -0.9 na na na na na na Ba1 O/L changed to stable 18-Jun-03 BB+ O/L changed to (+), Affirmed 26-Mar-07Colombia 21.8 -3.8 45.6 22.0 -1.6 -2.5 47.6 47.6 Ba2 O/L Changed to (+) 25-Jun-07 BB+ Upgrade, O/L stable 05-Mar-07Pakistan* 10.8 -3.0 na na na na 46.6 44.5 B1 O/L changed to (-), Affirmed 05-Nov-07 B+ O/L changed to (-), Affirmed 06-Nov-07Jordan* 5.3 -14.4 na na na na na na Ba2 O/L changed to stable 08-Jan-07 BB Affirmed, stable 28-Nov-06
Source: Bloomberg, JPMorgan Source: Bloomberg, JPMorgan Source: Bloomberg, JPMorgan Source: Bloomberg, JPMorganSource: CEIC, JP Morgan estimates, Moody's, Standard & Poor's, Bloomberg * Data from World Economic Outlook for April 2006 for Current Account data, ** F denotes forecast. Note: Forex reserves as of 31 March 2008 or latest available data. Updated as of Jul 2
Public Sector DebtFiscal DeficitExternal Debt
July 3, 2008
EMBI Global Spreads and Yields EMBI Asia Spreads and Yields EMBI Latin America Spreads and YieldsEMBI Europe Spreads and Yields
100
150
200
250
300
350
400
Jun-06 Mar-07 Oct-07 Jul-085.0
5.5
6.0
6.5
7.0
7.5
8.0
Spread (L) Yield
100
150
200
250
300
350
Jun-06 Mar-07 Oct-07 Jul-085
6
6
7
7
8
Spread (L) Yield
100120140160180200220240260280300
Jun-06 Mar-07 Oct-07 Jul-085.5
6.5
7.5
8.5
Spread (L) Yield
100
150
200
250
300
350
400
Jun-06 Mar-07 Oct-07 Jul-086.0
6.26.4
6.6
6.87.0
7.27.4
7.6
Spread (L) Yield
16
Emerging Markets Equity Strategy ResearchJ.P. Morgan Securities (Asia Pacific) Limited: Adrian Mowat (852) 2800-8599 , [email protected] Equities Limited: Deanne Gordon (27-21) 712 0875, [email protected]
Source: Datastream, Bloomberg, JPMorgan. Updated as of Jul 2008
2. For the debt to equity distribution chart, each box indicates quartile levels and markets with values exceeding the scale are indicated by the open-ended top box. The diamond indicates weighted average for each market.
Note: 1. All ratios are calculated from latest financial reports available ex Banks, Insurance and Diversified financials sector and calculations are based on weighted average of companies in the MSCI EMF universe. For Altman z-score, its application on company level is such that a score of less than 1.8 indicates bankruptcy likely, between 1.8-2.7 bankruptcy likely within 2 years and more than 3 most likely safe from bankruptcy. For market as a whole, the ratio is a weighted average of companies' z-score, thereby giving a general quality of companies in the market.
3. Quartile Distribution Charts: each quartile is separated by a line, with the exception of the top quartile which is subdivided in order to show the top decile of companies, shaded in blue. Markets with values exceeding the scale are indicated by the open-ended top box. The diamond indicates the weighted mean for each market.
Debt to Equity Ratios Quartile Distribution Chart (x)
0
2
4
6
8
Kore
a
Sout
h Af
rica
Taiw
an
Braz
il
China
Mexic
o
Russ
ia
India
Malay
sia
Israe
l
Thail
and
Chile
Turk
ey
Indo
nesia
Polan
d
Hung
ary
Czec
h Re
publi
c
Arge
ntina Peru
Philip
pines
Egyp
t
Moro
cco
Pakis
tan
Jord
an
Colom
bia
17
Emerging Markets Equity Strategy ResearchJ.P. Morgan Securities (Asia Pacific) Limited: Adrian Mowat (852) 2800-8599 , [email protected] Equities Limited: Deanne Gordon (27-21) 712 0875, [email protected]
Perspective: Demographic and Key Economic Statistics
Age Gross 2008 Growth Dependency Ratio* Enrollment Ratio US$ Per capita Total Per capita Total Per capita
million %YoY Young Old Secondary** billion (US$) (%) (%) (%) (%)
Source: CEIC, Datastream, Bloomberg, US Consensus Bureau, World Bank, IMF, UNESCO, JPMorgan estimates Updated as of Jul 2* Age dependency ratio defined as dependents to working-age population.** Gross Enrollment Ratio is defined as pupils enrolled in a secondary level, regardless of age expressed as a percentage of the population in the relevant official age group *** 10-year CAGR for period 1998-2008, in local currency. # CAGR for period 1998-2008 ## Population data based on IMF estimate as on July 2007Data for Gross enrollment data for 2004 except for Malaysia, Brazil and Argentina which is for 2003
July 3, 2008
Real GDP10 year CAGR***
Population and DemographicsPopulation##
Nominal GDP2008 10 year CAGR***
18
Emerging Markets Equity Strategy ResearchJ.P. Morgan Securities (Asia Pacific) Limited: Adrian Mowat (852) 2800-8599 , [email protected] Equities Limited: Deanne Gordon (27-21) 712 0875, [email protected]
Perspective: Global Emerging Capital Markets
MSCI EMF Index Markets Concentration JPM EMBI Global
Total Market Cap Estimated Free Float Companies Average Daily
AC World Index Market Capitalisation MSCI Regional Market Capitalisation Top 8 versus Rest of Emerging Markets
EM Asia49%
EM Latin America
25%
EM Europe and Middle East
26%
North America47%
Developed Europe
29%
Emerging Markets
11%Japan
9%
Developed Asia4%
19
Emerging Markets Equity Strategy ResearchJ.P. Morgan Securities (Asia Pacific) Limited: Adrian Mowat (852) 2800-8599 , [email protected] Equities Limited: Deanne Gordon (27-21) 712 0875, [email protected]
Perspective: MSCI Emerging Market Index Composition by Countries and SectorsNumber of Companies: 785 Total Market Capitalization (in billion US$): 6740
Emerging Markets Equity Strategy ResearchJ.P. Morgan Securities (Asia Pacific) Limited: Adrian Mowat (852) 2800-8599 , [email protected] Equities Limited: Deanne Gordon (27-21) 712 0875, [email protected]
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21
Emerging Markets Equity Strategy ResearchJ.P. Morgan Securities (Asia Pacific) Limited: Adrian Mowat (852) 2800-8599 , [email protected]
J.P.Morgan Equities Limited: Deanne Gordon (27-21) 712 0875, [email protected]
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Emerging Markets Equity Strategy ResearchJ.P. Morgan Securities (Asia Pacific) Limited: Adrian Mowat (852) 2800-8599 , [email protected] Equities Limited: Deanne Gordon (27-21) 712 0875, [email protected]