Really like the point you make on China and its outlook - if it hasn't been able to provide positive returns for the last 20 years then you are spot on with pointing out why it would do any better against the backdrop of a declining demographics and rising debt.
Although the whole discussion reminded me of one of my favourite quotes: "China is like a pig on LSD, you have no idea which way its going to turn next" - Chanos
I would like to point out that we may be reaching an inflection point with regard to the GDP identity: More people = more hours worked = more GDP. That expression doesn't capture productivity and/or capital goods. The productivity explosion that AI and robotics promise could very well make it that we see Less people = less hours worked = more GDP.
When we're talking about virtually infinite intellectual productivity, combined with greatly higher physical productivity, the connection between GDP and demographics has never been more tenuous.
Hey Rodney! I should have probably tightened up the language there - you’re right to point out the importance of productivity and cap investment.
As an alternative to the AI boost we could even have the low productivity of the last decade or so or the very low prod of the last couple of years in europe take hold (i would guess we have the AI boost though although both are possible)! And also it’s probably worth acknowledging that more people often also means more capital investment
Nestlé (NESN.SW): A leading global food and beverage company with a significant presence in emerging markets like India, Nigeria, and China, poised to benefit from rising consumer demand.
Procter & Gamble (PG): A consumer goods giant with a wide range of products, from hygiene to household goods, well-positioned to tap into increasing consumer spending in markets like India, Nigeria, and Egypt.
Unilever (ULVR.L): With its diverse portfolio of food, beauty, and personal care brands, Unilever has a strong footprint in developing countries, particularly in Africa and Asia.
2. Telecommunications
MTN Group (MTN): A leading telecom company in Africa, MTN operates in several countries, including Nigeria, South Africa, and others in Sub-Saharan Africa. As mobile and internet penetration grows in these regions, MTN stands to benefit.
Vodafone Group (VOD): With operations across several developing markets, including parts of Asia (India and Pakistan), Vodafone is set to profit from the expanding mobile and broadband markets.
3. Financial Services
Standard Chartered (STAN.L): A significant player in emerging markets with a strong presence in countries like India, Pakistan, Bangladesh, and Nigeria, providing financial services to a growing middle class.
HSBC (HSBC): With a focus on emerging markets in Asia (China, India, Bangladesh) and Africa, HSBC stands to benefit from growing financial services demand.
Ecobank (ETI): With a presence across much of Sub-Saharan Africa, including Nigeria and the DRC, Ecobank is positioned to benefit from increasing financial inclusion and banking services.
4. Energy & Infrastructure
China National Petroleum Corporation (CNPC): A leading energy company, CNPC stands to benefit from the increasing energy demand in China, India, and Pakistan, alongside its investments in emerging market energy sectors.
TotalEnergies (TOTF.PA): A major player in the energy sector, TotalEnergies has significant operations in emerging markets, particularly in Africa (Nigeria, Egypt) and Asia (Bangladesh), where demand for energy is rising.
Caterpillar Inc. (CAT): As infrastructure development accelerates across emerging markets, especially in Africa and Asia, Caterpillar’s heavy equipment will see increased demand in markets like India, China, and Nigeria.
5. Technology & E-commerce
Alibaba Group (BABA): With a major presence in China and expanding in other Asian markets, Alibaba is well-positioned to benefit from the growing e-commerce, cloud computing, and digital services sectors across the region.
Tencent (0700.HK): A dominant technology company in China, Tencent stands to gain as internet and digital services penetration increases in Asia, including India and Pakistan.
Amazon (AMZN): Already entrenched in India, Amazon is set to capitalize on the growing e-commerce and logistics industries in other emerging markets.
Jumia Technologies (JMIA): Operating across several African countries, including Nigeria and Egypt, Jumia is poised for growth as online shopping becomes more prevalent in Africa.
6. Healthcare
AstraZeneca (AZN): With a global presence, AstraZeneca is well-positioned to benefit from rising healthcare demand in countries like India, China, and Nigeria, where access to healthcare is improving.
Johnson & Johnson (JNJ): A leader in healthcare, J&J’s diversified portfolio of pharmaceuticals, medical devices, and consumer health products allows it to capitalize on the growing demand for healthcare in developing markets.
Really like the point you make on China and its outlook - if it hasn't been able to provide positive returns for the last 20 years then you are spot on with pointing out why it would do any better against the backdrop of a declining demographics and rising debt.
Although the whole discussion reminded me of one of my favourite quotes: "China is like a pig on LSD, you have no idea which way its going to turn next" - Chanos
Thank you! I really struggle to have space for any optimism on China, especially with opportunities else
Re the quote, weird but I like it! 😂
This is great, thanks for writing it up.
I would like to point out that we may be reaching an inflection point with regard to the GDP identity: More people = more hours worked = more GDP. That expression doesn't capture productivity and/or capital goods. The productivity explosion that AI and robotics promise could very well make it that we see Less people = less hours worked = more GDP.
When we're talking about virtually infinite intellectual productivity, combined with greatly higher physical productivity, the connection between GDP and demographics has never been more tenuous.
Hey Rodney! I should have probably tightened up the language there - you’re right to point out the importance of productivity and cap investment.
As an alternative to the AI boost we could even have the low productivity of the last decade or so or the very low prod of the last couple of years in europe take hold (i would guess we have the AI boost though although both are possible)! And also it’s probably worth acknowledging that more people often also means more capital investment
Full ChatGPT recommendations:
1. Consumer Goods and Retail
Nestlé (NESN.SW): A leading global food and beverage company with a significant presence in emerging markets like India, Nigeria, and China, poised to benefit from rising consumer demand.
Procter & Gamble (PG): A consumer goods giant with a wide range of products, from hygiene to household goods, well-positioned to tap into increasing consumer spending in markets like India, Nigeria, and Egypt.
Unilever (ULVR.L): With its diverse portfolio of food, beauty, and personal care brands, Unilever has a strong footprint in developing countries, particularly in Africa and Asia.
2. Telecommunications
MTN Group (MTN): A leading telecom company in Africa, MTN operates in several countries, including Nigeria, South Africa, and others in Sub-Saharan Africa. As mobile and internet penetration grows in these regions, MTN stands to benefit.
Vodafone Group (VOD): With operations across several developing markets, including parts of Asia (India and Pakistan), Vodafone is set to profit from the expanding mobile and broadband markets.
3. Financial Services
Standard Chartered (STAN.L): A significant player in emerging markets with a strong presence in countries like India, Pakistan, Bangladesh, and Nigeria, providing financial services to a growing middle class.
HSBC (HSBC): With a focus on emerging markets in Asia (China, India, Bangladesh) and Africa, HSBC stands to benefit from growing financial services demand.
Ecobank (ETI): With a presence across much of Sub-Saharan Africa, including Nigeria and the DRC, Ecobank is positioned to benefit from increasing financial inclusion and banking services.
4. Energy & Infrastructure
China National Petroleum Corporation (CNPC): A leading energy company, CNPC stands to benefit from the increasing energy demand in China, India, and Pakistan, alongside its investments in emerging market energy sectors.
TotalEnergies (TOTF.PA): A major player in the energy sector, TotalEnergies has significant operations in emerging markets, particularly in Africa (Nigeria, Egypt) and Asia (Bangladesh), where demand for energy is rising.
Caterpillar Inc. (CAT): As infrastructure development accelerates across emerging markets, especially in Africa and Asia, Caterpillar’s heavy equipment will see increased demand in markets like India, China, and Nigeria.
5. Technology & E-commerce
Alibaba Group (BABA): With a major presence in China and expanding in other Asian markets, Alibaba is well-positioned to benefit from the growing e-commerce, cloud computing, and digital services sectors across the region.
Tencent (0700.HK): A dominant technology company in China, Tencent stands to gain as internet and digital services penetration increases in Asia, including India and Pakistan.
Amazon (AMZN): Already entrenched in India, Amazon is set to capitalize on the growing e-commerce and logistics industries in other emerging markets.
Jumia Technologies (JMIA): Operating across several African countries, including Nigeria and Egypt, Jumia is poised for growth as online shopping becomes more prevalent in Africa.
6. Healthcare
AstraZeneca (AZN): With a global presence, AstraZeneca is well-positioned to benefit from rising healthcare demand in countries like India, China, and Nigeria, where access to healthcare is improving.
Johnson & Johnson (JNJ): A leader in healthcare, J&J’s diversified portfolio of pharmaceuticals, medical devices, and consumer health products allows it to capitalize on the growing demand for healthcare in developing markets.