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Leopard Asia Frontier Universe

Click on the country link below to view the economic snapshot, stock market overview and GDP forecast for each of the twelve target countries within the Leopard Asia Frontier Universe.

Bangladesh

Overview

With over 160 million people, a young and cheap labor force and strategic location between India and China — two of largest engines of global economic development over the past decade — Bangladesh has strong prospects for continued economic growth for the foreseeable future. The extent of Bangladesh’s growth will largely depend on its leaders’ ability to improve economic and diplomatic ties among its neighbors. Completion of a highly-anticipated Indo-Bangladeshi free-trade agreement will help spur Bangladesh’s already surging garment, pharmaceutical and software industries. Bangladesh has also begun to construct large infrastructure projects, such as electrical power plants, to address domestic and regional energy needs. In addition, with 50% of its workforce in the service sector, Bangladesh has the potential to become an offshore centre for outsourcing, which would help diversify its economy.

Stock Market:

Bangladesh holds two separate stock exchanges, the Dhaka Stock Exchange (DSE, established in 1954) and the Chittagong Stock Exchange (CSE, established in 1995). The DSE has a total of 232 listed companies with a market capitalization of US$ 28 billion and a PE ratio of 12.04. The CSE is located in southeastern Bangladesh, hosts 237 companies, has a market capitalization of over US$ 4 billion and a PE ratio of 12.06 (Q4, 2011).

Forecast Summary: 2011 2012 2013 2014 2015 2016
Real GDP Growth (%): 6.7 6.3 6.1 6.3 6.4 6.5
*Source: The Economist

Bhutan

Overview

Bhutan’s economy is one of the world’s smallest and least developed, yet has experienced tremendous growth over recent years and is forecasted to grow at an annual rate of 7.9% through 2014. Bhutan’s economy is largely driven by its hydroelectricity, tourism, agriculture and forestry sectors. Bhutan has also benefited from recent sub-regional economic cooperation efforts, particularly the establishment of Bilateral Free Trade Agreements between India and Bangladesh, Bhutan’s two largest trading partners. In attempts to promote continued economic expansion, the government is expected to further promote fast-growing industries that offer potential employment opportunities, particularly tourism, financial services and information technology.

Stock Market:

The Royal Securities Exchange of Bhutan Ltd. (RSEBL) was founded in 1993 with assistance from the Asian Development Bank and is currently owned by four brokerage firms: BOB Securities Ltd., BNB Securities Ltd., Brook Securities Ltd., and RICB Securities Ltd. The RSEBL lists 20 companies holds a market capitalization of US$ 249 million as of 2011.

Forecast Summary: 2010 2011 2012 2013
Real GDP Growth (%): 7.0 6.8 8.3 8.5
*Source: The Economist

Cambodia

Overview

After decades of political mismanagement and civil war, Cambodia has recently begun to capitalize on its economic potential. Since adopting free-market economic policies in the 1990’s and increasing its integration within the international community Cambodia’s economy has flourished. From 1998 to 2007, Cambodia’s GDP growth ranked sixth in the world (9.8%) and fastest in the Far East after China. Cambodia’s continued upward trajectory will be driven by several factors. Cambodia is resource-rich with newfound offshore oil and gas deposits in the Gulf of Thailand and mineral deposits in the northern provinces. Tourism is also growing quickly; Cambodia is home to pristine beaches, world class cultural relics (Angkor Wat) and a burgeoning eco-tourism sector. Cambodia also benefits from a young and cheap workforce, and a growing middle-class.

Stock Market:

The Cambodia Securities Exchange (CSX) was established in July of 2011 and is headquartered in Phnom Penh. Currently, no companies are listed/traded on the CSX.

Forecast Summary: 2011 2012 2013 2014 2015 2016
Real GDP Growth (%): 6.1 5.5 6.2 7.0 7.0 7.2
*Source: The Economist

Laos

Overview

Although one of the few remaining one-party communist states, the Laotian government’s attempts to decentralize control of the economy and encourage private enterprise starting in 1986 has resulted in an annual growth rate of 6% from 1988-2008. Laos’ economy has maintained consistently high GDP rates through 2012 due to strong growth among its main trading partners in the region, particularly China. High prices on the global commodities market have improved foreign interest in Laos’ extractive sector prospects, and foreign mining companies are increasing production and looking to attain additional concessions. Laos looks to benefit from in increase of agriculture production, which accounts for 33% of GDP and employs 75% of the population, as large swaths of land have been leased to foreign investors for further agricultural development. As of December 2011, the Laotian government has pursued efforts to promote entrepreneurship as the basis for economic growth by initiating a US$2 million small and medium-sized enterprise (SME) development fund, with priority given to agricultural processing companies.

Stock Market:

The Lao Securities Exchange (LSX) was founded in January 2011 with technical and financial support from South Korea. LSX, headquartered in Vientiane, currently lists two companies; EDL Generation-Public Company, which is a subsidiary of the state-owned energy company Electricite du Laos, and Banque pour Le Commerce Exterieur Lao (BCEL), the countries largest bank. LSX has a total market capitalization of over US$ 590 million as of March 2012.

Forecast Summary: 2010 2011 2012 2013
Real GDP Growth (%): 8.4 8.5 7.7 8.2
*Source: The Economist

Maldives

Overview

The Maldives, an island nation in the Indian Ocean, has experience consistent economic growth throughout the better part of the last decade with annual real GDP growth averaging 6%. The Maldives economy is primarily dependent on tourism –more than 700,000 tourists visit annually — and its spinoffs in the transportation, communication and construction sectors. Fishing remains an important aspect of the economy as well, though catch has dropped substantially in recent years. The government has begun to privatize certain sectors, starting with the main airport, and is partially privatizing the energy sector. In addition, the government is aggressively promoting the construction of new resorts throughout the islands.

Stock Market:

The Maldives Stock Exchange (MSE) is located in Male, Maldives, and was established in April 2001. Currently the MSE lists six companies; Maldives Transport and Contracting Company Plc, Bank of Maldives, State Trading Organization, Maldives Tourism Development Corporation Plc, Amana Takaful Maldives and Dhivehi Raajjeyge Gulhun Plc. MSE has a total market capitalization of over US$ 496 million as of March 2012.

Forecast Summary: 2007 2008 2009 2010 2011 2012
Real GDP Growth (%): 12.1 12.0 -6.5 9.9 8.3 8.0
*Source: The Economist

Mongolia

Overview

Although the least densely populated country in the world, Mongolia has the potential to see the greatest growth of any country within Leopard’s Asia Frontier Universe. Mongolia’s economy is traditionally based on herding and agriculture, but is expanding aggressively due to foreign investments in large mining projects that capitalize on the country’s vast deposits of coal, copper, gold, tungsten, tin, nickel, zinc, silver and iron. Real GDP is expected to expand by 16.1 % in 2012, up 10 % from the previous year, as exports from several mining projects are sold. Mongolia’s growth is also steered by record levels of agriculture production in 2011, and the spillover from China’s epic growth.

Stock Market:

The Mongolian Stock Exchange (MSE), located in Ulan Bator, was established in 1991 and is the country’s sole stock exchange. The MSE lists over 330 companies and has a market capitalization of approximately US$2 billion.

Forecast Summary: 2010 2011 2012 2013
Real GDP Growth (%): 6.1 17.3 14.8 17.3
*Source: The Economist

Myanmar

Overview

Following recent democratization measures, including the release of hundreds of political prisoners, cease-fire agreements with ethnic rebels, and the incorporation of long-time human rights champion Aung San Suu Kyi into the political process, it is apparent Myanmar is determined to become fully integrated into the international community. After being isolated for the better part of the last three decades, Myanmar is emerging as a potentially high-growth target market due to its abundance of natural resources, including oil and gas, attractive tourist destinations, and young, well-educated labor force eager to work at regionally-competitive wages. These attributes, coupled with its strategic location bordering China, India, Thailand and Laos, provide Myanmar with the potential to emerge as one of the most dynamic economies of the twenty-first century.

Stock Market:

The Myanmar Securities Exchange was established in 1996 as a joint venture with Japanese broker Daiwa Securities Co. The exchange lists just two companies and is considered the world’s smallest, if not most primitive stock exchange. Officials from the Tokyo Stock Exchange (TSE) have begun talks with Myanmar regulators to help create a more formalized and advanced stock exchange by 2015.

Forecast Summary: 2011 2012 2013 2014 2015 2016
Real GDP Growth (%): 4.8 4.6 5.0 6.0 6.5 7.0
*Source: The Economist

Nepal

Overview

After ten years of civil war between the government and Maoist rebels ended in 2006, Nepal is now looking to shed its violent past and provide its citizens with political stability and economic growth. In the foreseeable future, economic growth will largely depend on the government’s ability to exploit the country’s hydroelectric power potential, which could provide electricity to energy-hungry neighbors in the sub-region, including India and Bangladesh. Additional natural resources consist of quartz, timber, copper, cobalt and iron ore. Increased agricultural production, which amounts to one-third of GDP and employs 75% of the work force, will also be a crucial element for any near-term economic growth. Nepal’s inchoate tourism industry also has potential to spur economic growth.

Stock Market:

The Nepal Stock Exchange Limited (NEPSE) was founded in 1992 and is located in Kathmandu. The market lists 313 companies and has a market capitalization of US$ 3674.64 million as of November 2011. NEPSE lists companies in several sectors including commercial banking, hotels, hydropower, insurance, finance and development banking.

Forecast Summary: 2010 2011 2012 2013
Real GDP Growth (%): 4.6 3.5 3.7 3.4
*Source: The Economist

Pakistan

Overview

Pakistan has the capacity to see long-term economic growth comparable to BRIC nations, particularly its neighbor India. Pakistan has sizable energy resources — including natural gas and oil reserves, coal, and large hydropower potential — a large work-age population (60 million people) and large swaths of arable land. Two of Pakistan’s most important sectors, agriculture and manufacturing, are expected to improve over the next year. Pakistan’s agriculture sector accounts for 21% of GDP and primarily grows cotton, wheat and rice. Manufacturing contributes 25% of GDP, which primarily consists of textiles and apparel, food processing, pharmaceuticals, construction materials and fertilizer. Pakistan’s economy also benefits from remittances from overseas workers that have averaged approximately $1 billion a month over the past year. Pakistan’s economy is expected to grow at a modest rate of 4% over the next 5 years.

Stock Market:

Pakistan has three stock exchanges, the Lahore Stocke Exchange (LSE), the Islamabad Stock Exchange (ISE) and the Karachi Stock Exchange (KSE), which is the largest. The KSE, founded in 1947, lists 613 companies, has a market capitalization of over US$ 37 billion, and a PE Ratio of 8.00 as of February 2012.

Forecast Summary: 2011 2012 2013 2014 2015 2016
Real GDP Growth (%): 2.4 3.9 4.3 4.5 4.6 4.8
*Source: The Economist

Papua New Guinea

Overview

Papua New Guinea has seen tremendous growth in the last two years as its economy grew by 7.1% and 9.2% in 2010 and 2011, respectively. Papua New Guinea’s growth is a direct refection of the impact of high global commodity prices influencing its domestic economy and the influx of foreign investment dollars into large infrastructure projects in the extractive industries. While Papua New Guinea’s economy is expected to level out to a more moderate average rate of 6.3% a year through 2016, growth will be directly tied to commodity prices and its ability to extract resources, which include gold, copper, silver, natural gas, oil and fisheries. Agriculture accounts for 32% of GDP and supports 75% of the population. Cash crops include coffee, oil, cocoa, copra, tea, rubber, sugar and timber; 40% of the country is covered with exploitable trees. Papua New Guinea looks to invest in its underdeveloped tourism industry in attempts to diversity its economy.

Stock Market:

The Port Moresby Stock Exchange (POMSoX), founded in 1999, is the principle stock exchange of Papua New Guinea. POMSoX currently lists 22 companies and has a market capitalization of US$ 51 billion as of December 2011. Companies within the extractive and tourism industry are highly represented within POMSoX.

Forecast Summary: 2011 2012 2013 2014 2015 2016
Real GDP Growth (%): 9.2 7.7 4.4 6.2 6.8 6.6
*Source: The Economist

Sri Lanka

Overview

Since Sri Lanka’s three-decades long civil war ended in 2009, the government has pursued ambitious economic policies in attempts to spur growth on the island. Sri Lanka’s economy expanded by 8% in 20011, and after a slight lull in growth due to weak external demand, is expected to grow at an annual average rate of 7.7% a year through 2016. Economic growth will be concentrated among investment in reconstruction efforts (particularly in the north and east), large infrastructure projects, real-estate development and assorted business investment as companies seek to capture market share amid rapid economic expansion. Private consumption, fuelled by rising incomes and consistent flows of remittances, is also driving economic expansion. Sri Lanka’s 91% literacy rate and life expectancy of 75 years rank well above those in the region (including India, Bangladesh, and Pakistan) making the labor force attractive for both manufacturing and service jobs.

Stock Market:

The Colombo Stock Exchange (CSE), established in 1985, currently lists 277 companies representing 20 sectors. The CSE has a market capitalization of US$18 billion (Dec. 2011) and a PE ratio of 14.31 as of February 2012.

Forecast Summary: 2011 2012 2013 2014 2015 2016
Real GDP Growth (%): 8.0 6.3 8.0 7.2 7.5 8.0
*Source: The Economist

Vietnam

Overview

Since the introduction of market reforms that opened up the country to foreign investment in the late 1980s, Vietnam has become one of the fastest-growing economies in the world averaging annual GDP growth rates of 7-8% throughout the nineties. Agribusiness production has nearly doubled over the past two decades transforming Vietnam into one of the world’s largest exporters of rice and shrimp. Currently, Vietnam is in the midst of a transformation from a manual labor/agrarian-based economy toward one fueled by skilled-labor. Agriculture production has decreased 5% to account for 20% of GDP over the last five years, while the government has begun to provide incentives to hi-tech industries — such as Intel, Canon, and Samsung — to bring skilled manufacturing jobs to Vietnam.

Stock Market:

Vietnam hosts two stock exchanges; the Ho Chi Minh City Stock Exchange (HOSE), which is Vietnam’s largest stock exchange, and the Hanoi Stock Exchange (HNX). HOSE, established in 2000, currently lists 305 companies and has a market capitalization of US$28 billion and an average daily trade volume (ADTV) of approximately US$48 billion as of March 2012. The Vietnam Stock Index (VN-Index) measures the market capitalization of all companies listed on the HOSE. The Hanoi Stock Exchange was established in 2009, currently lists 400 companies and has a market capitalization of over US$5 billion as of March 2012.

Forecast Summary: 2011 2012 2013 2014 2015 2016
Real GDP Growth (%): 5.9 5.8 7.2 7.5 7.3 7.7
*Source: The Economist