The BRIC Economies Are Not Balanced.

For investors, the BRIC countries such as Brazil, Russia, India and China have never been so divided.

The stock market in China and India increased by an average of 40% this year, but the average stock market in Russia and Brazil fell by 4.2%.

This gap may be the biggest since the BRIC was created in 2001. The total market capitalization of China and India stock market is 5 trillion and 200 billion US dollars higher than that of Russia and Brazil.

Hartmut Issel, Asia Pacific Regional Equity and debt manager of the wealth management department of UBS, told Bloomberg news.

From a cyclical point of view, the four countries are almost impossible to be more unbalanced. China is slowing down, but it still shows enviable economic growth. India has begun to accelerate growth, Brazil is hitting bottom, and Russia's economic recession is likely to be inevitable.

13 years after the BRICs concept was put forward, the links between the four countries are weakening. India modi is pushing ahead with reform. The Chinese authorities are taking measures to maintain 7% of economic growth. Russia is being sanctioned, while corruption scandals in Brazil's state-owned oil companies are dragging their economies.

The Shanghai Composite Index and the standard & Poor's BSE Sensex index in India are likely to hit the biggest annual gain in five years. The Brazil St Paul index entered a bear market this month, and a sharp fall in commodity prices threatened Brazil's trade surplus. The Russian stock market fell this year due to sanctions and the ruble crisis.

The MSCI BRICs index has risen about 274% since 2001. As of yesterday's Asian market closing, the index has fallen by about 5% this year.

Aberdeen Asset Management senior investment manager Mark Gordon-James told Bloomberg news.

When the word "BRICs" was created, it was used to describe the importance of emerging market economies, but it never became a reasonable investment concept.

Exchange rate fluctuations also have an impact on the returns of foreign investors.

The yuan and the India rupee fell by less than 3% against the US dollar this year, while Brazil's real estate has fallen by about 13% this year, and the ruble has fallen more than 40%.

The total stock market value of China and India rose to a record $6 trillion and 400 billion this month, while the total market capitalization of Brazil and Russia fell to $1 trillion and 200 billion, the lowest level since at least 2005.

Morgan chase Asia Investment Director Adam Tejpaul told Bloomberg news.

The prospects for Russia and Brazil, China and India are still good. Although there may be opportunities in assets in Russia and Brazil, the prospect of economic weakness in the two countries is a deterrent for investors.

Average expectation of MICEX in Russia P / E ratio It's 5 times. The Brazil Ibovespa index is 11. The Shanghai composite index is 12, while India Sensex is 15.

　　 investment bank Julius Baer & Co analyst Pearlyn Wong told Bloomberg news.

We are most excited about the reform of China and India. Reform will benefit the economic and financial markets in 2015. China and India are also beneficiaries of falling oil prices and falling commodity prices.

In Brazil, Brazil's national oil company broke out a corruption scandal which will jeopardize President Rousseff's influence. Putin is struggling with the collapse of the ruble and banking crisis. Earlier, the Bank of Russia raised interest rates to 17%.

The Bloomberg commodity index fell 6.1% to five year low this month, the sixth consecutive month of decline, the biggest drop in 2009. Oil prices fell 45% this year, possibly the biggest decline in 2008.

Falling oil prices and metal prices may boost the economy of China and India and reduce inflation in both countries. However, this is not good news for Brazil and Russia. Commodities account for half of Brazil's exports, while 50% of Russia's government revenue comes from the energy sector.

Templeton Emerging Markets Group executive chairman Mark Mobius told Bloomberg news.

　　 BRICs It can still be regarded as an investment theme. Even with the slowdown in Brazil and Russia, the growth of emerging markets in 2015 is still expected to be higher than that in developed economies. Opportunities exist in all BRICs, although Russia's sanctions have created some difficulties.

BRIC's father, O Neill, says the BRICs are an economic concept. It happens to be an investment theme. In 2003, Goldman Sachs predicted that the BRICs will join the US and Japan in 2050 to become the world's largest economy.