BRIC Simply Implies the Combination of Few Countries

Question: Discuss about the Portfolio. Answer: Introduction: Literature Review BRIC simply implies the combination of few countries, which are Russia, China, Brazil and India. The future economy of the entire world depends on the development of these four countries (Stuenkel 2014). All the four countries have huge population and they are craving for growth, which has already started to reorganize the entire global commerce. They have young peoples who are concentrated in main cities and can impel this growth into a positive direction. However, the growing aspects of the start-ups and middle class are down in these BRIC countries. The domestic concern must be improved to provide growth in long term, strengths of investment and complement their exports. The average earning of the 800 million residents in the BRIC countries should have exceeded $ 3000 by the end of 2016. This should have effect on many industries like mobile phone, automobile, computers and many more. If income rises then it will also result in increased number of individuals having high net worth (Keukeleire and Hooijmaaijers 2014). Another factor is required to consider for supporting the market is profitability of the corporate. Profits of the corporate in BRIC countries has been consistently high during the past decade which was due to perfect corporate restructuring, reducing the level of borrowing and improving the corporate governance quality. In future if the recent problems in the credit market dont affect the growth of entire world in a very noteworthy manner then it is believed that the growth of Brazil will not be hampered significantly even though there is short term volatility in the market. In the mean time, Indias stock market has been able to reach highest levels (Cowan et al. 2014). It was expected that GDP of India and the earning of its corporate would slow down as its enters 2016 as various monetary and fiscal policy initiatives will be made to keep the inflation level under control. However, if long-term view is taken then Indian market will be slightly volatile during short term. The equity valuation of Chinese has shown upwards movements recently. However, higher valuation is expected seeing the growth of earnings in China (Frank 2013). The mergers, currency appreciation, acquisition and implementation of various plans for management incentive together with tax planning have been able to support Chinese in itiatives. The negative factor for China is its increasing trade surplus with Europe and china. Russia has suffered in the middle of the year due to turmoil in the market and no good performance in the beginning of the year to boost its value (Brtsch and Papa 2013). Therefore, most of the Russian stock has been valued at a moderate rate like shares of Lukoil and Gazprom was valued relatively low even when both of the companies have higher long-term valuation of oil than Petrobras, a Brazilian company. The key factor of Russia is the prices of oil and is unlikely to collapse but for some stock market has been trading at an average level. Forecast of the GDP of the counties of BRIC during the year 2009 to 2015 was roughly US $ 19.2 turn with an export of US $ 5.4 trn, which helps in boosting the domestic growth and creation of a new customer generation. There was a time when the growth rate of US and Europe was slowing down then BRIC countries provided massive growth opportunity for companies to penetrate the virgin markets at a large scale (Frank 2013). The growth of Chinese and Indian economy have been boosted by export and investment in manufacturing products which is largely different from the full of resource Russia and to some extent to Brazil. Therefore, any approach to exploit the BRIC growth must be accounted for in assessing the risk faced by these countries like risks in the stability of oil price (Cowan et al. 2014).. Financial market immaturity and pressure of inflation in china is also to be analyzed by the researcher. References Brtsch, C. and Papa, M., 2013. Deconstructing the BRICS: Bargaining Coalition, Imagined Community, or Geopolitical Fad?.The Chinese Journal of International Politics, p.pot009. Cowan, W.N., Chang, T., Inglesi-Lotz, R. and Gupta, R., 2014. The nexus of electricity consumption, economic growth and CO 2 emissions in the BRICS countries.Energy Policy,66, pp.359-368. Frank, W.P., 2013. International Business Challenge: Does Adding South Africa Finally Make the BRIC Countries Relevant?.Journal of International Business Research,12(1), p.1. Keukeleire, S. and Hooijmaaijers, B., 2014. The BRICS and Other Emerging Power Alliances and Multilateral Organizations in the Asia Pacific and the Global South: Challenges for the European Union and Its View on Multilateralism.JCMS: Journal of Common Market Studies,52(3), pp.582-599. Stuenkel, O., 2013. The financial crisis, contested legitimacy, and the genesis of intra-BRICS cooperation.Global Governance,19(4), pp.611-630.