Archive for July, 2011

Urbanization: Building a New World

July 19, 2011 Leave a comment

In this two-part series on urbanization, I will share my thoughts on how urbanization is driving infrastructure development and spending, which in turn can lay the foundation for potentially sustainable, long-term growth in emerging markets, both in terms of the economy and per capita income. Investment in infrastructure has been gathering momentum all over emerging markets, from plans to construct a high-speed train in Brazil connecting Rio De Janeiro to São Paulo, to bridges and tunnels springing up in China and India. Brazil, an export-driven economy with a large consumer market, also needs to improve its infrastructure ahead of hosting the 2014 FIFA World Cup and 2016 Olympic Games. Better infrastructure can provide the basis for potentially sustainable long-term economic growth, which in turn paves the way for interesting investment opportunities.

Over the next few decades, I believe we are likely to see an increase in several types of infrastructure investments due to rapid urbanization, which drives the increasing global demand for resources, mainly from emerging markets. I expect there will likely be many opportunities, particularly in the energy and materials sectors. Rapid urbanization in emerging markets, driven by rural populations migrating to cities in search of work and better opportunities, has put pressure on resources and prompted governments to pump money into a range of urban infrastructure-related sectors such as housing, transportation, sanitation, water, electricity and telecommunications.

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Categories: Perspective


July 8, 2011 Leave a comment

In the search for good investment opportunities around the world, I have made many interesting company visits. This time, I particularly wanted to share some of my noteworthy observations from Argentina, where we had our semi-annual analyst conference earlier this year.

Argentina has been experiencing steady growth throughout the years despite the country’s economic problems, from double-digit inflation to a shrinking trade surplus. We saw one good example of the improvements in the country when we arrived at the Ministro Pistarini International Airport, which, since its privatization, is in much better shape than it was in the past. Besides the bright and airy new wing, the customs and immigration process was quick and efficient. We then checked into a modern hotel in the Puerto Madero area in Buenos Aires, which is another good example ofArgentina’s transformation. Puerto Madero was a rundown port with derelict red-brick warehouses, but thanks to creative entrepreneurs, the warehouses lining the port canal have been transformed into offices, restaurants and apartments. The hip and wealthy have migrated to the area; across the canal are a slew of new high-rise, high-end apartments, and a half hour’s walk from the hotel along the canal is a floating casino that is seeing brisk business.

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Categories: History