Asian Emerging Markets

Boost Your Portfolio Thanks to This Asian Emerging Market
by Martin Denholm
October 14, 2005

This Asian country is driving the emerging markets sector - thanks to the fact that it has the fastest-growing salaries in the world. What is this country... and what's behind this growth? Find out below, along with the surprising statistics - information to help you boost your investment portfolio profits.

Here's your question of the day: What country boasts the fastest-growing salaries in the world?

I'll give you a moment to think about it.

In the meantime, I have another question for you. Yeah, I know - it's Friday and productivity sometimes isn't as high at the end of the week, so I apologize if you feel unduly taxed. But it's very simple, I assure you. Take a stab and see if you can guess how many millionaires there are in the US.

Data from market research company TNS shows the number just rose to a new record for the third straight year, confirming that the "mega-wealth effect" is alive and kicking following the economic downturn at the start of the century.

The current number is nine million.

But, perhaps more tellingly, the number of households with an annual income between $100,000 and $500,000 rose to 24.5 million. And as an indication of the slowing market, real estate accounted for only 44% of the wealth increase - a 12% drop from 2004.

Strong Corporate Growth Boosts Salaries for this Emerging Market

OK, now back to today's first question. Any ideas?

According to a survey of 70 countries by London's Mercer Human Resource Consulting, the answer is India. The report covered five areas - senior executives, management personnel, operations, clerical and technical staff - and shows that salaries will jump 7.3% above inflation next year thanks to strong corporate growth.

But in addition to the obvious inflationary pressures that such fast salary growth could cause (and Reserve Bank of India is set to combat this by raising interest rates 0.25% to 6.25% when it meets on October 25), other reports suggest that business costs are actually rising too fast and could eventually dampen many companies' appetite for outsourcing their operations to India.

That's not going to happen any time soon, though, and the economy continues to barrel along at a rapid pace. Second-quarter GDP growth hit 8.1% - a full 1% higher than forecast. And the Bombay Stock Exchange has motored along impressively over the past three months, scooting from levels around 7,250 to 8,201.73 at the close today.

Thanks to my Red Zone colleagues, you can cash in on the run by buying what they call a "super-safe" Indian stock for around $12 and watching it triple in value by June 2006.

The company just bought one of the world's best undersea cable lines at a $2.87 billion discount. It's also the primary Internet provider for India - and with 33 million Internet users taking advantage of their services, it's only a matter of time before this company launches.

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About the author:

As Taipan's resident Brit, Martin Denholm adds to the group's already strong international flavor by bringing a knowledge of the British political, economic, financial and cultural arenas. He has been with the Taipan Group since September 2002, where he acts as the group's roving "Editor-at-Large." He is the author of the "Desk of Denholm," a message that appears in the Dynamic Market Alert each day, bringing readers the latest political, economic and market news from the US, Britain, the Eurozone and other global areas. Martin is also the Executive Editor and contributes regular articles to the monthly Taipan newsletter where you can find his latest stock recommendations, as well as content from the Taipan Group's other publications.

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