Goldman Sachs: Time to Take BRIC off Investment List

29 December 2011 (09:17)

The BRIC countries have to be taken off the list of investment goals: the time for this group’s intensive growth is now over, Goldman Sachs warns. BRIC will come to be replaced by a set of eleven most densely populated developing countries, Gazeta.Ru reports.

‘We have witnessed the peak in BRIC’s growth. Over the last decade, the mere idea of BRIC has been enough to attract investments. It is much more difficult now to believe that just having the faith in their future growth is enough to get these investments,’ says Goldman Sachs economist Dominic Wilson in his review on the BRIC countries over the last ten years and their being only half-way through to great achievements.

Goldman Sachs economist Jim O’Neill is even more pessimistic.

‘$15bn was taken out of the funds that invested in BRIC in 2011. MSCI BRIC, the index showing the cost of these countries’ shares, dropped by 23% during the year, whereas MSCI Emerging Markets Index of twenty-one developing countries lost 20%. Among the BRIC countries, the Chinese Shanghai Composite Index and BSE India Sensitive Index sank the lowest, by the same 23%. The Russian market has sagged by 18% to 20% so far, the Brazilian bourses went down by 17%,’ the expert says.

‘In 2012, the BRIC index might lose another 20%,’ feels Arjuna Mahendran, head of investment strategy for Asia at HSBC Private Bank.

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