India’s Urbanization: Emerging Opportunities
Identifying India's fastest-growing cities
We estimate that 140 million people will move to cities by 2020 and a massive 700million by 2050, leading to rapid growth in existing cities, and new towns emerging.
Cities are wealth creators and centers of demand. Thus, picking winners among cities and getting exposure to their growth process can be a key investment theme.
We identify the fastest growing cities in India, as well as the slow growing ones.
In particular, we find that there are significant investment opportunities in urban infrastructure, with sectors such as construction, materials, transportation, and capital goods likely to benefit.
With necessary reforms, the nascent municipal bond market shows enormous growth potential.
China: M2 growth may have understated the speed of monetary expansion
We find that the M3 growth rate has been faster than that of M2 since 2Q2006, likely reflecting the fast accumulation of capital market-related financial assets, such as mutual funds and bonds held by non-financial institutions.
The speed of monetary expansion, as measured by the M3 growth rate, has now approached its peak level as of mid-2003.
As a result, we see upside risks to growth and inflation, as well as risks of more decisive policy tightening in 2H2007.