Financial Investment Analysis: Global Markets

This assignment delves into the realm of global financial investment analysis. It examines various market scenarios, including those in China, India, Russia, Brazil, and emerging renewable energy sectors. The focus is on understanding the key determinants that influence investment decisions within these diverse markets. Factors such as economic growth, energy consumption, regulatory environments, and risk aversion are explored to shed light on current investment trends and opportunities.

Running head: INVESTMENT MANAGEMENT
Investment management
Name of the student
Name of the university
Author note

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Executive Summary
This is a study, which will portray the investment opportunities in the emerging
markets. The countries that have been selected for analyzing the investment opportunities are
Brazil, Russia, India and China. These four countries are emerging in nature and is grabbing
the attention of the foreign investors because of the lucrative setup of these market
economies. Brazil is one of the largest economies in the continent of Latin America and
exporters of energy. The market economy of the country is dependent on the oil and natural
gas market. Similarly, Russia is also dependent on their oil reserves and has faced a lot of
challenges in making a transition from the economy that is planned to a free market economy.
The GDP of the country has progressed immensely and the country is among the largest
economies in the world. India is one of the largest economies and one of the market leaders
of the manufacturing industry. India has made commendable growth in the service sectors as
they provide quality labours at cheap prices. China is the largest member of the BRIC in
terms of GDP and size. China is one of the fastest growing economies in Asia and the foreign
companies are making an effort to build relationship with this Chinese government to make
an entry in to foreign market. Thus, form the above report it can be concluded that the
Chinese market is the most suitable market for Australian investors. The three other emerging
economies are also growing but the economic growth of China is far greater than the other
nations. This is the right time to capitalize on the market situation and the investors will have
to make sure that they analyze the market thoroughly before entering the Chinese market.

2INVESTMENT MANAGEMENT
Table of Contents
Introduction................................................................................................................................3
Market analysis..........................................................................................................................3
Brazil investment opportunities.............................................................................................4
Russia investment opportunities............................................................................................8
India Investment opportunities.............................................................................................12
Investment opportunities in China.......................................................................................15
Suitable market.........................................................................................................................17
Balanced portfolio....................................................................................................................17
Conclusion................................................................................................................................18
Reference..................................................................................................................................19

3INVESTMENT MANAGEMENT
Introduction
This is a study, which will portray the investment opportunities in the emerging
markets. The countries that have been selected for analyzing the investment opportunities are
Brazil, Russia, India and China. These four countries are emerging in nature and is grabbing
the attention of the foreign investors because of the lucrative setup of these market
economies. Brazil is one of the largest economies in the continent of Latin America and
exporters of energy. The market economy of the country is dependent on the oil and natural
gas market (Al‐Mulali, Solarin and Ozturk 2016). Similarly, Russia is also dependent on their
oil reserves and has faced a lot of challenges in making a transition from the economy that is
planned to a free market economy. The GDP of the country has progressed immensely and
the country is among the largest economies in the world (Yang et al. 2017). India is one of
the largest economies and one of the market leaders of the manufacturing industry. India has
made commendable growth in the service sectors as they provide quality labours at cheap
prices (Negi and Prakash 2016). China is the largest member of the BRIC in terms of GDP
and size. China is one of the fastest growing economies in Asia and the foreign companies
are making an effort to build relationship with this Chinese government to make an entry in
to foreign market (Wang et al. 2016.). The report will consist of analysis of all the emerging
countries, which will help, in identifying the investment opportunities and selecting a suitable
market for the investors in Australia. Finally, the report will conclude with the development
of the balanced portfolio for the chosen market.
Market analysis
The market analysis will consist of the portfolio investment opportunities in the
countries of Brazil, Russia, India and China.

4INVESTMENT MANAGEMENT

5INVESTMENT MANAGEMENT
Brazil investment opportunities
This table shows the foreign direct investment of the United States in Brazil and vice
versa. This is a Historical Cost Basis analysis, which shows that United States have the
highest number of Foreign direct investment in Brazil.
Host Country
Statistical Source
USG or
International
Statistical Source
USG or
International
Source of Data:
BEA; IMF;
Eurostat;
UNCTAD, Other
Economic Data Year Amount Year Amount
Host Country
Gross Domestic
Product (GDP)
($M USD)
2016 $1,799,436 2015 $1,774,700 World Bank
BCB
Foreign Direct
Investment
Host Country Statistical
source
USG or International
Statistical Source
USG or
International
Source of Data:
BEA; IMF;
Eurostat;
UNCTAD, Other
U.S. FDI in
partner country
($M USD, stock
2014 $111,714* 2015 $65,272** BEA data
U.S. is Historical-
Cost Basis

6INVESTMENT MANAGEMENT
positions)
Host country’s
FDI in the
United States
($M USD, stock
positions)
2015 $9,606* 2015 $23,660** BEA data
Total inbound
stock of FDI as
% host GDP
2015 26% N/A N/A IMF CDIS 2015
total inbound
investment
Table 1
(Source: Vargas et al. 2016)
The table 2 shows the countries who have invested in the Brazilian Market and the
data is little different from the data that has been sold in the previous table. This is due to the
discrepancy between the BCB and IMF where BCB calculates the FDI distribution by
checking the country with the ultimate investment (Vargas et al. 2016). However, IMF
considers the country with the most current FDI investment so there is a change in the values
in both the tables.

7INVESTMENT MANAGEMENT
Direct Investment from/in Counterpart Economy Data
(IMF Coordinated Direct Investment Survey, 2015)
From Top Five Sources/To Top Five Destinations (US Dollars, Millions)
Inward Direct Investment Outward Direct Investment
Total Inward 460,381 100 % Total Outward 145,043 100 %
Netherlands 110,210 24 % Cayman Islands 52,456 36 %
United States* 82,125 18 % Austria 30,937 21 %
Spain 57,426 12 % Brit Virgin Islands 24,523 17 %
Luxembourg 34,732 8 % The Bahamas 20,730 14 %
United Kingdom 23,213 5 % Spain 11,403 8 %
"0" reflects amounts rounded to +/- USD 500,000.
Table 2
(Source: De Carvalho,Gallucci-Netto and Siqueira 2017)

8INVESTMENT MANAGEMENT
The table 3 will show direct investment survey created by the IMF and includes the
investment portfolio amounts for different countries in the market.
Portfolio Investment Assets (IMF Coordinated Portfolio Investment Survey, June 2016)
Top Five Partners (Millions, US Dollars)
Total Equity Securities Total Debt Securities
All Countries 23,595 100% All Countries 71,816 100% All Countries 5,779 100%
United States 10,316 44 % United States 6,936 39 % United States 3,380 58 %
Cayman
Islands
2,604 11 %
Cayman
Islands
2,481 13 % Spain 713 12 %
Spain 1,685 7 % Bermuda 1,502 8 % Denmark 650 11 %
Bermuda 1,503 6 % Luxembourg 1,105 6 %
Republic of
Korea
487 8 %
Luxembourg 1,135 5 % Spain 972 5 %
Cayman
Islands
123 2 %
Table 3
(Source: Maier, Street and McKinnon 2016)
The economy of Brazil is in turmoil and the financial index in a bad shape. The
market for jobs has declined significantly and the value of the currency is very low. The rate
of interest in the market is high and so there is limited opportunity of investment in the

9INVESTMENT MANAGEMENT
market. However, many analysts suggest that that is the best investment opportunities for the
foreign investors. This is due to the fact that the currency of the country is weak and the
exchange rate has a high ratio. Dollar, pound and Euro are the currencies, which are
dominating the Brazilian market so this, can be considered to be the best opportunity for
selling (Maier, Street and McKinnon 2016). The export prices have decreased significantly
due to weak currency of the country and this has increased the export of the products from
the country. The banks are providing the consumers loans at higher rates so that they can gain
even higher return from the market. The international banks feel that the best possible
strategy is to invest in the emerging markets. The decision making of the foreign investor is
the factor, which will decide the amount of revenue they can generate from the emerging
markets.
Russia investment opportunities
The Table 4 shows the foreign direct investment of United States in Russia and vice
versa.
Host
Country
Statistical
Source*
USG or
International
Statistical
Source
USG or International
Source of Data:
BEA; IMF; Eurostat;
UNCTAD, Other
Economic Data Year Amount Year Amount
Host
Country
Gross Domestic
Product
2016 $1.232 2015 $1.331

10INVESTMENT MANAGEMENT
GDP) ($T
USD)
Foreign Direct
Investment
Host Country
Statistical Source*
USG or International
Statistical Source
USG or international
Source of Data: BEA;
IMF; Eurostat; UNCTAD,
Other
U.S. FDI in
partner country
($M USD, stock
positions)
2016 $2.95
billion
2015 $9.2
billion
Host country’s
FDI in the United
States ($M USD,
stock positions)
2016 $8.09
billion
2015 $4.6
billion
Total inbound
stock of FDI as %
host GDP
2016 0.2% 2015 0.7% N/A
Table 4
(Source: Kolupaev et al. 2015)

11INVESTMENT MANAGEMENT
Direct Investment from/in Counterpart Economy Data
From Top Five Sources/To Top Five Destinations (US Dollars, Millions)
Inward Direct Investment
(2015)
Outward Direct Investment (2015)
Total Inward 257,287 100% Total Outward 286,583 100%
Cyprus 86,281 34% Cyprus 104,446 36%
Netherlands 32,368 13% Netherlands 57,461 20%
Bahamas 21,297 8% British Virgin Islands 33,501 12%
Bermuda 13,562 5% Austria 21,054 7%
Germany 13,523 5% Switzerland 16,456 6%
Table 5
(Source: Watson and Seetharam 2014)
This table shows the amount of investment made by the countries in which shows that
Cyprus is one of the leading traders of the foreign direct investment. This shows that the
Russian market is lucrative and is able to grab the attention of lot of foreign investors.

12INVESTMENT MANAGEMENT
Portfolio Investment Assets (as of December 2015)
Top Five Partners (Millions, US Dollars)
Total Equity Securities Total Debt Securities
All
Countries
68,11
9
100
%
All
Countries
2,81
4
100
%
All
Countries
65,30
4
100
%
Luxembourg
24,61
2
36%
United
States
546 19% Luxembourg
24,25
7
37%
Ireland
19,37
9
28% Cyprus 437 16% Ireland
19,37
7
30%
Netherlands 4,420 6% Luxembourg 355 13% Netherlands 4,179 6%
United
States
3,514 5% Netherlands 241 9%
United
States
2,968 5%
Cyprus 2,468 4% Ireland 42 1% Cyprus 2,031 3%
Table 6
(Source: Fischer 2016)
The table 6 shows the portfolio investment of the various countries in the Russian
market. The table will highlight the investment of the various countries in securities market in
the country of Russia.

13INVESTMENT MANAGEMENT
The investment sectors in Russia consist of the high risk and all the major multination
companies have to face challenges in operating. The local players dominate the Russian
sectors and portfolio investment is very risky, as the companies are partly owned by the state.
The reputational risk is high as most of the companies in the oil and gas sector are facing
serious disputes in ecological issues. The technology sector is also a risky sector as the
amount of return on investment is low due to the intervention from the government. The
country is not stable at an political level and the decision making of the companies in the
market are influenced by the government in the industry (Fischer 2016). However, the retail
industry in Russia brings about a lot of opportunities for the foreign investors and the growth
in the retail segment is promising. There is a lot of demand of the luxury items in the market
so the foreign investor has the opportunity of investing in this market.
India Investment opportunities
Host Country
Statistical Source*
USG or
International
Statistical Source
USG or
International
Source of Data:
BEA; IMF;
Eurostat;
UNCTAD, Other
Economic Data YearAmount Year Amount
Host Country Gross
Domestic Product
(GDP)
2015 $2.1 trillion 2015 $2.095 trillion
Mospi
World Bank
Foreign Direct
Investment
Host Country
Statistical Source*
USG or International
Statistical Source
USG or International
Source of Data:

14INVESTMENT MANAGEMENT
BEA; IMF; Eurostat;
UNCTAD, Other
U.S. FDI in partner
country (stock
positions)
2015
$19.280*
billion
2015 $28.335 billion
BEA data available
at BEA
Host country’s FDI in
the United States
(stock positions)
2012
$2.052*
billion
2014 $9.3 billion
BEA data available
at BEA
Total inbound stock of
FDI as % host GDP
2014 1.8% 2015 2.1% World Bank
Table 7
(Source: Garg and Dua 2016)
The table 7 highlights the investments that have been made by United States in India
and vice versa
Direct Investment from/in Counterpart Economy Data
From Top Five Sources/To Top Five Destinations (US Dollars, Millions)
Inward Direct Investment Outward Direct Investment
Total Inward 312,152 100% Total Outward 84,826 100%
Mauritius 63,077 20% Singapore 17,721 21%
United States 50,152 16% Mauritius 15,322 18%

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United Kingdom 45,802 15% Netherlands 12,259 14%
Germany 33,112 11% United States 8,889 10%
Singapore 32,909 11% UAE 4,449 5%
"0" reflects amounts rounded to +/- USD 500,000.
Table 8
(Source: Dua and Garg 2015)
The table 8 shows the investment that has been made by all the countries in India and
the data suggest that Mauritius has the maximum investment among all the countries.
Portfolio Investment Assets
Top Five Partners (Millions, US Dollars)
Total Equity Securities Total Debt Securities
All Countries 1,650 100% All Countries 1,640 100% All Countries 10 100%
United States 496 30% United States 494 30% Singapore 6 60%
United
Kingdom
292 18%
United
Kingdom
290 18% United States 2 40%
Luxembourg 273 17% Luxembourg 273 17%
United
Kingdom
2 40%
China P.R.236 14% China P.R.236 14%

16INVESTMENT MANAGEMENT
Mainland Mainland
Mauritius 77 5% Mauritius 77 5%
Table 9
(Source: Yildirim and Masih 2014)

17INVESTMENT MANAGEMENT
The table 9 shows the capital spent by the companies on the portfolio investments in
the Indian market. United States and United Kingdom are the two countries who have
invested the maximum amount in the portfolio market.
The foreign portfolio investment in the country is increasing at an rapid rate
due to the stability in the political aspect of the country. The investment pattern this year
shows that the foreign investors have increased the investment in equities and there high
expectation from the market. The new government has established new reforms, which is
changing the market scenario of the country (Yildirim and Masih 2014). The performance in
most of the sectors has increased rapidly and basic materials have outperformed all the other
market. Telecom and Information technology market are underperforming. Thus, the overall
scenario shows that it is feasible to invest in the market as it proving the foreign investors
with a lot of opportunities.
Investment opportunities in China
Economic Data
Yea
r
Amount
Yea
r
Amount
Host Country Gross Domestic Product (GDP) (in US$)
201
6
$11.39
trillion
201
5
$11.01
trillion
U.S. FDI in partner country (in US$, stock positions)
201
5
$70 billion
201
5
$74.56
billion
Host country’s FDI in the United States (in US$, stock
positions)
201
5
$40.8 billion
201
5
$14.84
billion
Total inbound stock of FDI as % host GDP 201 16% 201 11.1%

18INVESTMENT MANAGEMENT
Economic Data
Yea
r
Amount
Yea
r
Amount
4 5
Table 10
(Source: Dollar 2017)
The table 10 shows the foreign investment made by United States in China and vice versa.
From Top Five Sources/To Top Five Destinations ()
Inward Direct
Investment
Amount (US Dollars,
Millions
%
Outward Direct
Investment
Amoun
t
%
Total Inward 2,579,564
100
%
Total Outward
100
%
China, P. R. Hong
Kong
1,238,823 48%
Brit Virgin Islands 328,085 13%
Japan 151,926 6%
Singapore 111,218 4%
United States 78,490 3%
Table 11
(Source: Carpenter, Lu and Whitelaw 2015)

19INVESTMENT MANAGEMENT
The table 11 shows the various who have made their investment in the country of China.
China is the fastest growing nation in the world and the economy of the country is
growing at a rapid rate. This has made the country lucrative for the foreign investors and
investment in the country has increased significantly in the year of 2017 (Carpenter, Lu and
Whitelaw 2015). The record suggest that there has been surplus in the investment and foreign
direct investment have increased significantly.
Suitable market
China is the market that is most suitable for Australian investment as the growth in
the Chinese market is highest among all the other countries in the world. Australia is among
the countries who invest a lot in the foreign market and the Australians have invested a lot of
amount in the foreign market (Borst and Lardy 2015). India, Russia and brazil are also
growing but it is the best time for the investor to be investing in the Chinese market as the
revenue that they can be generated from this market will be more than the other markets.
Balanced portfolio
In order to gain from the Chinese market the investors will have to create a balanced
portfolio so that they can mitigate all the risk and improves the return from the market. The
balanced portfolio in the Chinese market is shown below:
XS1068221230 0 LONGFOR PROPERTI
LNGFOR 6 3/4 05/28/18
10.08%
700 HK Tencent Holdings Ltd 8.25%
884 HK CIFI Holdings Group Co Ltd 5.84%
XS1014156274 KWG PROPERTY HOL 5.80%

20INVESTMENT MANAGEMENT
KWGPRO 8.975 01/14/19
XS1149696996 YUZHOU PROPERTIE
YUZHOU 9 12/08/19
5.71%
Table 12
(Source: Created by author)
This is a portfolio, which consist of the unit holders that have a moderate capital
appreciation in the long term and the potential to generate revenue by investing in the fixed
securities and equities. These securities and equities are available in both on shore and off
shore China.
Conclusion
Thus, form the above report it can be concluded that the Chinese market is the most
suitable market for Australian investors. The three other emerging economies are also
growing but the economic growth of China is far greater than the other nations. This is the
right time to capitalize on the market situation and the investors will have to make sure that
they analyze the market thoroughly before entering the Chinese market.

21INVESTMENT MANAGEMENT
Reference
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growth relationship: an empirical investigation of Brazil. Biofuels, Bioproducts and
Biorefining, 10(6), pp.753-775.
Borst, N. and Lardy, N., 2015. Maintaining financial stability in the People's Republic of
China during financial liberalization.
Carpenter, J.N., Lu, F. and Whitelaw, R.F., 2015. The real value of China's stock market (No.
w20957). National Bureau of Economic Research.
De Carvalho, A.G., Gallucci-Netto, H. and Siqueira, E.M., 2017. Determinants of success in
venture capital investments: evidence from Brazil. Venture Capital, 19(3), pp.147-161.
Dollar, D., 2017. United States-China two-way direct investment: Opportunities and
challenges. Journal of Asian Economics, 50, pp.14-26.
Dua, P. and Garg, R., 2013. Foreign Portfolio Investment Flows to India: Determinant and
Analysis. Centre for Development Economics, working paper, (225).
Fischer, P., 2016. Foreign direct investment in Russia: a strategy for industrial recovery.
Springer.
Garg, R. and Dua, P., 2014. Foreign portfolio investment flows to India: determinants and
analysis. World Development, 59, pp.16-28.
Kolupaev, R.V., Rogacheva, L.I., Moskalenko, A.V., Ulrikh, I.V. and Mikhailova, T.A.,
2015. Special considerations of the financial investment in Russia. Asian Social
Science, 11(7), p.297.