Investment Articles

Much of the confidence in Brazil investment opportunities comes from the perception that Brazil has a strong government led by determined leaders. President Dilma Rousseff is one such leader and this week, she captures takes the spotlight on the international stage.

Dilma’s higher than usual profile this week is US-based. The Brazilian President features on the front cover of Newsweek in its American edition and Dilma will the first woman head of state to open a United Nations General Assembly. In addition, she will receive the Woodrow Wilson Public Service Award.

This stream of accolades comes as recognition of Dilma’s decided leadership of Brazil, currently a leading light in times of global uncertainty. Dilma’s international acknowledgment will also serve to further corroborate Brazil as a destination for some of the best investments for 2011, particularly when it comes to political and economical security.

Brazil in Control

Newsweek, under the title “Don’t mess with Dilma”, details the President’s personal and political life. The article emphasises Brazil’s economic growth and Dilma’s part in this. The recent visit by Barack Obama when he referred to Brazil and the US as “equal partners” and Dilma’s inauguration of the UN General Assembly confirm Brazil’s presence in the world arena.

When asked what differentiates her country from the rest of the world, the Brazilian President highlights Brazil’s strong political and banking controls. For Dilma, these controls mean Brazil can counteract slower economic growth or even global stagnation, unlike many other countries.

Recent statistics back this theory – Brazil barely suffered the effects of the 2008 global recession and currently has record levels of employment and middle class growth. Direct foreign investment in Brazil is also seeing the highest rates ever with private investment in equity at the top.

The latest Ernst & Young Capital Confidence Barometer Brazil recently concluded that when it comes to Brazilian investment opportunities, “the pluses far outweigh the minuses”. This sentiment is echoed by foreign companies active in Brazil, many of whom have noted that 2011 has been a year with intense investor interest and activity.

Centre Stage

In addition to her front cover presence, Dilma is also receiving the prestigious Woodrow Wilson Public Service Award. For Jane Harman, CEO of the Woodrow Wilson Center, “President Rousseff’s story has inspired millions of women throughout the world to reach for leadership”.

Shortly after receiving the award, Dilma will open the General Assembly at the UN in New York where she will be the first female head of state to do so. After just nine months as President of Brazil, Dilma is proving to be an immensely influential leader, capable to leading her own country and others. Brazilian investment is undoubtedly in safe hands.

About Obelisk International: Obelisk International offers select investment opportunities in Brazil in a range of sectors such as social housing, residential real estate and construction. Obelisk gives investors security, profitability and diversity thanks to a combination of close attention to our clients’ investment requirements and high quality in-house research and analysis.

For more information on Brazilian investments and to find out about Obelisk International’s latest opportunities for investment in Brazil, contact us on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: http://www.obeliskinternational.com. Follow us on Twitter – @obeliskinvest and Facebook. Join the Obelisk International network on LinkedIn.

The 2014 World Cup means big business for Brazilian investments, employment and the economy generally. Latest figures point to economic growth in excess of US$70 billion.

As well as one of the world’s most important sporting festivals, the World Cup is a huge money-making machine. 2014 Brazil will be no exception as can be seen from the expected earnings just announced by the Brazilian Ministry of Sport.

Big Numbers

Overall, the Brazilian economy is predicted to grow by US$70 billion. This growth will mostly come from public and private investment in Brazil in areas such as infrastructure and services. Consumption by visitors to the World Cup is also expected to bring a major boost to Brazil’s already buoyant economy.

Employment will see huge growth over the next three years as investment in Brazil builds infrastructure and stadiums for the matches. Some 330,000 permanent jobs are expected to be created throughout Brazil where unemployment is currently at a record low of 6.2%. This job creation will inevitably lead to more middle class wealth and in turn, generate further income for other sectors of the economy.

Tourism will be one of the sectors most benefitted by the football tournament. Over 600,000 foreigners will travel to Brazil to watch the games, bolstering the fast-growing Brazilian tourist industry. Foreign visitors will generate US$2.5 billion in extra income for Brazil.

Along with earnings from foreign visitors, the Brazilians themselves will be adding to the country’s coffers when they travel around Brazil to see the games. The Ministry of Sport estimates that the World Cup will generate US$3.5 billion in earnings from the 3 million Brazilians who go along to watch.

Adding up the Investment

Brazil, along with preparations for the World Cup and Olympics, is also making huge investment in real estate and hydropower. The 2 million homes being built in the Minha Casa Minha Vida programme represent the biggest Brazilian property investment ever. These plus two of the world’s largest hydropower plants do not leave a lot of leeway for more construction financed by public investment in Brazil.

Costs for materials and labour have risen sharply since Brazil was awarded the World Cup and the budgets for several stadiums are now considerably higher. The Sports Minister believes the construction of Brazil’s new stadiums will come out at around US$7,000 a seat, 17% higher than originally expected.

Despite the additional costs – common to preparations for all major sporting events – the overall figures look hugely positive to Brazil, set to reap huge benefits from the 2014 World Cup. Without a doubt, the next three years are full of opportunity for Brazil and Brazilian investment.

About Obelisk International: Obelisk International offers select investment opportunities in Brazil in a range of sectors such as residential real estate, construction and social housing. Obelisk gives investors security, profitability and diversity thanks to a combination of close attention to our clients’ investment requirements and high quality in-house research and analysis.

For more information on Brazilian investments and to find out about Obelisk International’s latest opportunities for investment in Brazil, contact us on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: http://www.obeliskinternational.com. Follow us on Twitter – Obelisk International and Facebook.

An investment is something that you put money into in order to make more money. There are many places to put your money. It could be public or private stocks or bonds via Wall Street or the stock market. It could also be private investments of your choosing, such as a small startup business that you believe in either online or brick and mortar. Either way, there are potential risks and rewards. When it comes to investing in restaurants, there are two different routes to take. Many large chains are traded publicly, so these would be investments via the stock market. Others are smaller operations that would be invested in directly.

Choosing to invest in a restaurant could come about in a variety of ways. As far as those publicly traded, it could be that a broker suggests the investment. Or, the investor may eat at a publicly traded restaurant and determine that is it so wonderful that it is bound to excel, and call his broker to make the investment. A smaller operation is a bit more random to come across. Perhaps someone wants to open a restaurant and is looking for investors. This person may be known or unknown to the investor. Another way this could come about is a smaller restaurant may have a well-established business, but may have fallen on hard times for various reasons. In this case, the restaurant owner may seek investors to get them through the hard time.

Investing in restaurants has its own set of risks and benefits. For example, with an established business, it is fairly easy to recognize a success. If there are always people there, then the restaurant is well loved. There is a well-defined product and quality is easy to see. If the food is good and the location is good, even a new business has lower risk. If the owners have a good history in the business, that is even better. However, even just one case of food poisoning can put the business down for good.

The need for great customer service and cleanliness are two major reasons that a restaurant investor may want to spend time at the establishment. Visit the business regularly to access what is going on. Are there a lot of people there? Do they seem happy with their food and service? How was your service? How are others being treated? Check it out yourself. For more information on investing in investment opportunities usually or normally not found in the marketplace, click here!

Sean Johnson is an Investment Advisor for http://www.inquest.biz an Investment Referral Service for investors requesting information on specific investments.

The very best personal investment may be different for you than it is for someone else, but that does not mean that there are not better places in general to put your money. Still, depending on your financial goals, the amount of risk you are willing to take, and the number of dollars you are willing to invest, you will find different kinds of investments to be more profitable to you. Choose your investments wisely and you will obtain greater wealth to enjoy in the future, despite market ups and downs. You may be interested in investing in hedge funds, investing in stocks, or real estate investing. All of these options will be explored here.

If you think that investing in hedge funds may be for you, you should understand more about them first. Hedge funds are most commonly established as private investment partnerships that are only available to a small number of investors. There is usually a large initial minimum investment required of investors. This money is not liquid as investors are often required to keep their investments in the fund for 12 months or more. Investing in hedge funds may be for you if you have a large amount of money you want to transform into even more money while attempts to reduce risk are highly implemented.

Real estate investing could be for you if you want to make money on the real estate market by purchasing homes with the intent to sell rather than occupy them as your new dwelling. Those within this field of investing often own multiple properties. These may be sold for a quick return or rented out for a long-term investment. There are many different kinds of real estate investing that may interest you, whether you want to be a landlord or get the property off your hands as soon as possible.

Investing in stocks is perhaps the most classic form of investing that exists today. It is known for being quite a risky venture, especially in an unpredictable market. However, if you know how to read historical statistics, you can stay ahead of inflation and increase your finances in time. Even though you must pay taxes when investing in stocks, as well as when investing in these other kinds of investments, you should not let this fact deter you from making more money. Most forms of income are taxed anyway and you have the potential to make a great killing on the stock market, in real estate, or with hedge funds.For more information on investing in investment opportunities usually or normally not found in the marketplace, click here!

Sean Johnson is an Investment Advisor for http://www.inquest.biz an Investment Referral Service for investors requesting information on specific investments.

Suddenly, the world food markets spilled out of control. Within a year, prices for wheat doubled, those for soybean and sugar even tripled. The drivers behind this surge were stock decreases during the preceding years, a disappointing harvest due to bad weather in several countries and growing demand for feedstuff. Once prices soared, governments of exporting nations curbed the outflow of food, thus exacerbating the crisis. Merely two years later, prices had come down roughly to previous levels-the affliction had ended.

This is not the account of the infamous 2007/2008 price spikes; it is the half-forgotten story of the early 70s. At least for developed countries, this earlier crisis was worse than the recent one. Real food prices-corrected for inflation-climbed higher, and food expenditures absorbed a much greater share of households’ income, so that any increase was felt more harshly. This episode nonetheless takes a backseat in our collective memory because OPEC limited oil production soon after the food prices had started to rise. Higher oil prices proved to be the more lasting and pernicious impediment to global growth.

So there is a historical precedent of a food price surge that did not destabilize the world economy. Instead, it was eventually followed by a quarter of a century of low food prices beginning in 1980. But the 2007/08 episode was not perceived from this bird’s-eye perspective. Even in emerging and industrialized countries, much less affected than the poorer nations, the crisis has changed the thinking of the powerful. The fear was born that the next food crisis may be waiting for us, one that will dwarf anything the world has seen before. The world might cast off its multilateral, liberal veil in the merciless scramble for food.

Under this lens, the purchase or long-term lease of fertile farmland abroad appears to be a hard-nosed move of Realpolitik without humanitarian disguise. Non-governmental organizations attack the neo-colonial land grab of Arab and Chinese investors that uproots local communities and undermines the self-sufficiency of poor nations. It’s smart but contemptible, so the common judgment goes-which may be wrong on both counts.

The receiving countries may actually win. Investment in developing countries’ agriculture is direly needed: the Food and Agriculture Organization (FAO) estimates that an annual US $ 30 billion of additional funds will be required over the next 10 years. This is hardly a sum governments will muster. Often the significant pledges made by donor countries during the crisis are just that, pledges. Making a promise is not the same thing as signing a check. Private investment is necessary to fill the gap.

Foreign direct investment (FDI) has long been considered as the most desirable form of capital inflow. It transfers not only money but also technology and knowledge to the receiving country, and productivity improvements often spill over to local production. Furthermore, FDI involves heavy transaction costs for the investor-in this case, selecting suitable land, negotiating agreements, setting up production and organizing transportation. Direct investment is therefore much more stable than the billions of speculative money that may trigger a bonanza today and dry up tomorrow. The very idea of farm land contracts for food security is long-term reliability.

What about the food security gains of the investing country? What happened if world food prices skyrocketed? Pressures in many producing countries would be tremendous to scale back or stop exports. Certainly, investments are generally protected by investment treaties that guarantee the right to export and prohibit expropriation without compensation (which would be difficult for developing countries to pay, especially with high food prices that increase the value of the investment). Cynics say treaties are made to be broken, and they are likely to be right when it comes to food security. If it is either do or die, one government will inevitably cede to popular demands, others will find it convenient to follow suit and the entire system will unravel.

Arab and Asian governments that pour billions of dollars into farmland FDI-whether through Sovereign Wealth Funds of state-owned enterprises-must be aware of the fragility of these contracts. The market outlook may nevertheless justify these investments on commercial grounds. The world population will continue to rise during the next decades and income growth per capita in developing countries will further add to the demand for food. Also, non-food uses of agricultural produce are expected to expand, especially for bio-energy.

The supply equation is more complicated. Since the end of the Second World War, world food supply has grown even more rapidly than the population-which underwent a growth spurt unseen in human history. Increasing investments into agricultural research and development suggest further productivity increases down the road.

More important than new high-tech solutions are the gains to be had from ending the disastrous inefficiency rampant in many developing countries. The first challenge here is to improve the input, credit, land, and output markets on which farmers rely. It is plain to see that a farmer who lacks clearly established and enforced property rights will undertake only minimal effort to maintain or improve soil fertility and irrigation systems. The other challenge is to enhance farmers’ knowledge of production techniques. Quite tellingly, the application of organic farming often raises farm output in developing countries even in the short run, though this technique is by no means geared at quickly maximizing yields. Still, it performs better than the outdated piecemeal approaches currently found in many places of Africa, Asia and Latin America. Taken together, inefficient markets and lacking knowledge go a long way to explain why Africa produces only 7% of world cereal supplies on 22% of the world’s agricultural area. A tremendous potential thus lies untapped.

Food production will also benefit from further trade liberalization as agriculture is the most protected sector of the world economy. While the Doha negotiations of the World Trade Organization are deadlocked and its ambition is watered down, more and more countries unilaterally lower tariffs and remove their heavily distorting subsidies. This facilitates greater specialization of production: less sugar from the EU and more from Brazil.

Climate change is the wild card in this market forecast. The threats include heat stress and droughts, soil erosion and salinization, the spread of pests and diseases and more frequent extreme weather events. This will be partly offset by greater productivity of agriculture in colder climate zones and higher CO2 concentration in the air, spurring plant growth.

Most likely, we will see a reversal of the decade-long trend of lower food prices but no dramatic shortages in world food supplies. Buying farmland and ramping up production may simply be a good investment given this market outlook. In this case, it should be handled like any investment: by independent companies looking at economic fundamentals and not by state-owned funds and companies driven by a strategic food-security calculus.

First published: Monday 22 March 2010.

http://www.majalla.com/en/economics/article33374.ece

In this quick little guide we’ll go over the basics of a sound, successful investment strategy. I’m going to describe to you the few key points that will help protect you from downturns, and keep your investments safely rising in almost any market.

The first thing we have to do is understand the difference between speculation and investment. They should never be mixed up, and they are very different from each other.

An investor is someone who entrusts some vehicle of the market, be it in the form of stocks, bonds, private investments, or something else to grow his or her money through genuine value growth, business planning, or sound financial management. When an investor hands their money over to a third party he´s doing so after having considered the risks and benefits, and after having taken a good look at the fundamentals and numbers behind a given company or other investment opportunity (e.g: Government Bonds). In essence an investor makes educated decisions and allocations that are based on tangible probabilities.

A speculator speculates: taking risks based on guesses, gut feelings, and trends in the general market that may not have any specific connection to a particular asset. Speculation is basically an attempt to outguess or even predict the timing of market movements.

Bearing these differences in mind, let’s proceed to some basic rules of sound investment management. These mostly apply to stocks, but we’ll finish with a bit said on other kinds of investments.

First Rule: Never get confused

The first rule is that you should never confuse speculation with investment. If you don´t have a very clear series of reasons for trusting the inherent value of the company behind a stock over the long run, then don´t buy into it if you want to call yourself an investor. If you’re investing in the company behind a stock, giving it your money to use for what you think will be carefully planned growth, and intending to keep your investment as part of a planned strategy for a long while, then you may call yourself an investor. If you’re trying to outguess the market, time the movement of stocks, and making hunches based on what’s in the news, then you’re speculating.

Second Rule: Don´t bet the college fund

Never speculate with money you cannot afford to lose. Speculating is fine, it can be fun, and if you’re lucky you might have some great successes, but mostly it depends on pure luck. Are you willing to bet the assets for your future and your children’s futures on pure luck? Probably not, so reserve your speculating only for the money which won´t cause a financial catastrophe if it burns away. Do this by creating an entire separate portfolio for speculative investments and keep the money in the form of liquid cash until you’re ready to make speculative moves.

Keep your speculative actions and the decisions behind them entirely separate from the reasoning that leads your investment actions. The two should not be mixed together at all.

Third Rule: Your real investments

Separate your real investment money, which should always make up the majority of your available assets, and put it into yet another fund. This fund must have nothing to do with your speculation fund, and should be designed in such a way that it can be left unsupervised without worrying about how it will do. Your investments are what you’re depending on for your own, and maybe even your children’s financial security, thus they have to be very reliable. So reliable that you could walk away from them for months at a time and not worry at all.

Fourth Rule: True diversification

Make your investment portfolio diverse. Now, a lot of people view diversity as selecting a few stocks from each of a whole array of companies, or maybe buying into the S&P 500 or DJIA stock indexes. This is a mistaken assumption, and although it protects you from the downs of individual stocks, it doesn´t protect at all against the collapse of the entire market. Sometimes nearly every stock goes downhill, and the very few that don´t are impossible to foresee. By diversification, I refer to something far more genuine and secure; real diversification.

Fifth Rule: Five Steps to safety

Diversify for real, and create far more financial security. A truly diversified and secure investment portfolio is made up of several pillars, each consisting of a totally different kind of asset. Thus, break your available investment capital four or five different ways evenly (e.g.: 10,000 being split into five quantities of 2000 each). Having done this, invest one part into stocks (especially stocks that are volatile, with good earnings and revenue fundamentals and without debt far in excess of assets); one part in precious metals, especially gold and silver; one part in bonds, especially long term bonds which come from an issuer that is as unlikely to default as possible; one part, perhaps, on real estate in markets where prices are not far in excess of reasonable for the size of the property. Finally, keep one part in the form of cash or equivalents: assets such as U.S treasury bills, money market accounts, or the foreign currency of a low debt, financially stable country.

Now that you have the five parts of your genuinely diversified portfolio set out, you can rest easy knowing that no matter what happens in the markets, short of an asteroid impact or global nuclear exchange, you will do well over the long run. This is because in any market; deflationary, inflationary; recessionary, or bullish, at least a couple of your pillars will do well, balancing the whole out over the long run. Now it´s time for the last rule, adjustment.

The Sixth Rule: Adjustments

You have to adjust your portfolio periodically. The best option would be on an annual basis. As the portfolio matures, certain assets will sometimes grow much faster than others, thus the stock component could wind up making up say 50% of the total value. This once again destabilizes your growth and creates too much volatility. Thus, every so often, take whatever has grown to beyond 20 or 25% and sell off the excess, redistributing the windfall amongst the others evenly. Do the opposite if one has dropped particularly after the same time, add enough to increase it back to 25%. This way you would be systemizing the principle of buying low and selling high on an annual basis, while also keeping a percentage of the growing or declining asset pillars for the possibility of their even further growth.

These are just some basic rules, and there are many others which could also be tried and found to work better, at least for the short run. However, with the portfolio rules described above, you’ll at least be providing yourself with the security of a very stable and problem resistant investment program. This is exactly what you need if you’re sincerely keeping your long term future in mind.

The latest HSBC survey confirms recent Bloomberg findings and put investment in Brazil at the top of global rankings. Between them, Latin America and Brazil are world investment hotspots.

According to those polled by HSBC Holdings plc last week, Latin America represents the best prospects for growth in investment over the next six months. In the survey, 30% of businesses ranked Latin America in top position for investment opportunities in the next semester. Latin America came ahead of China (25%) and Canada (15%), two other major trading regions for importers and exporters.

Latin America is favoured for its high economic growth – the region is set to grow 4.8% this year. Leading the Latin American boom are Brazil and Peru with Colombia and Chile also experiencing strong economic growth, which emphasises the area’s potential as a whole.

Of all the Latin American nations, Chile and Brazil represent the best bets for investment. Brazil is enjoying strong growth, record employment figures and the prospect of becoming the 5th largest economic power in the world within the next decade. Contrast this with many developed countries, currently facing high unemployment, burgeoning deficits and fears of a double-dip recession.

The HSBC survey also highlights the changing dynamics in world economics as emerging markets dominate the top-performing positions. Not only have emerging markets generally experienced a short recession, they are also leading the rest of the world to economic recovery.

With emerging markets set to represent almost half the global economy over the next few years, many multinationals are convinced that investment in these markets makes real business sense. Large companies are moving into emerging markets as part of their global strategy. And Brazilian investments tops the list for many – in the HSBC survey, 74% of companies said they currently trade with Brazil and a similar figure (76%) does business with China.

A particularly strong sector in Brazil is private equity with two-thirds of private equity deals in Latin America taking place here. The latest arrival is Blackstone, who now has a 40% share in the Brazilian Pátria. For the company, the creation of the Brazilian middle classes “has got very substantial momentum” and as a result, presence in Brazil is a must. Other private equity firms such as Carlyle Group and Warburg Pincus have also expressed strong interest in Brazil, proving Pátria’s point that “the competition is coming to Brazil”.

For Obelisk International, the Bloomberg and HSBC surveys underline the investment potential in Brazil. As more businesses come to appreciate this potential, more surveys will highlight the fact that Brazil is the place to be when it comes to investment. Over the next six months, Obelisk International expects to be joined by many more companies in Brazil.

About Obelisk International
Obelisk International is a private investment business specializing in Brazilian investments. Obelisk offers private investors the opportunity to invest into Obelisk businesses through projects sourced exclusively in Brazil.

Contact Obelisk International on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: http://www.obeliskinternational.com.

The latest HSBC survey confirms recent Bloomberg findings and put investment in Brazil at the top of global rankings. Between them, Latin America and Brazil are world investment hotspots.

According to those polled by HSBC Holdings plc last week, Latin America represents the best prospects for growth in investment over the next six months. In the survey, 30% of businesses ranked Latin America in top position for investment opportunities in the next semester. Latin America came ahead of China (25%) and Canada (15%), two other major trading regions for importers and exporters.

Latin America is favoured for its high economic growth – the region is set to grow 4.8% this year. Leading the Latin American boom are Brazil and Peru with Colombia and Chile also experiencing strong economic growth, which emphasises the area’s potential as a whole.

Of all the Latin American nations, Chile and Brazil represent the best bets for investment. Brazil is enjoying strong growth, record employment figures and the prospect of becoming the 5th largest economic power in the world within the next decade. Contrast this with many developed countries, currently facing high unemployment, burgeoning deficits and fears of a double-dip recession.

The HSBC survey also highlights the changing dynamics in world economics as emerging markets dominate the top-performing positions. Not only have emerging markets generally experienced a short recession, they are also leading the rest of the world to economic recovery.

With emerging markets set to represent almost half the global economy over the next few years, many multinationals are convinced that investment in these markets makes real business sense. Large companies are moving into emerging markets as part of their global strategy. And Brazilian investments tops the list for many – in the HSBC survey, 74% of companies said they currently trade with Brazil and a similar figure (76%) does business with China.

A particularly strong sector in Brazil is private equity with two-thirds of private equity deals in Latin America taking place here. The latest arrival is Blackstone, who now has a 40% share in the Brazilian Pátria. For the company, the creation of the Brazilian middle classes “has got very substantial momentum” and as a result, presence in Brazil is a must. Other private equity firms such as Carlyle Group and Warburg Pincus have also expressed strong interest in Brazil, proving Pátria’s point that “the competition is coming to Brazil”.

For Obelisk International, the Bloomberg and HSBC surveys underline the investment potential in Brazil. As more businesses come to appreciate this potential, more surveys will highlight the fact that Brazil is the place to be when it comes to investment. Over the next six months, Obelisk International expects to be joined by many more companies in Brazil.

About Obelisk International
Obelisk International is a private investment business specializing in Brazilian investments. Obelisk offers private investors the opportunity to invest into Obelisk businesses through projects sourced exclusively in Brazil.

Contact Obelisk International on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: http://www.obeliskinternational.com.

India is expected to increase its growth rate to 9-9.5 per cent during 2013-15 on the back of continuing structural reforms, globalisation and a sterling demographic dividend, according to a report by Morgan Stanley. These projections act as a catalyst in showcasing the quantum of investment opportunities in India. Similarly, the senior economists opine that the Indian economy may have expanded at close to 9 per cent-in the three months from April to June 2010-its fastest pace in more than two years, driven by high industrial growth and increased private investments.

Investment opportunities in India have resulted in an overall growth in various industrial sectors. Kaushik Basu, Chief Economic Adviser to the Ministry of Finance, had forecasted that the Indian economy would grow close to 9 per cent in the first quarter of 2010-11. Highlighting the infrastructure sector in March 2010, the Planning Commission had said that India investment opportunities in the infrastructure sector in 2010-11would be close to the target of US$ 500 billion (Rs 20 lakh crore).

Foreign direct investment (FDI) trends lucidly present the growing Indian investment opportunities by the overseas investor. Various foreign firms across different industrial sectors are on a look out for investment opportunities in Indian market. Giving a boost to the Indian economy auto sales grew 31.5 per cent in July 2010 over the corresponding period last year, as per data released by the Society of Indian Automobile Manufacturers (SIAM).

Furthermore, US Agency for International Development (USAID) through its clean-tech energy initiatives is exploring the potential of investing in India by partnering stakeholders and mentoring and working with the policy makers. Similarly, IBM announced that HPCL- Mittal Energy Limited (HMEL) has selected the company as its strategic partner in the design and implementation of a state-of-the-art manufacturing execution system (MES) for their zero residue refineries at Bathinda, Punjab, thereby representing yet another foray of Indian investment opportunities.

Furthermore, investing in India especially with view to medical tourism in India is expected to grow to US$ 2 billion by 2012, according to a report from McKinsey and CII. The Indian economy would grow to USD 1.72 trillion in 2011-12, moving closer towards the USD 2 trillion marks, according to an assessment by the Prime Minister’s Economic Advisory Council (PMEAC). The Indian economy grew by over nine per cent for three years in a row from 2005-06 to 2007-08 and expansion was maintained by industry and services sectors.

Moreover, giving impetus to the India investment opportunities for overseas investors, Mr Anand Sharma, Union Minister for Commerce and Industry, in the annual supplement to the Foreign Trade Policy (FTP), has unveiled various export policy support measures covering labour-intensive segments such as leather, handloom, and handicrafts, and some engineering sectors.

Harjeet is an Indian – born mass-market novelist, who covers the world internet related topics. He writes columns and articles for various websites and internet journals in the domain of India Investment Opportunities and Investment strategies.

A unique investment opportunity exists in the production, distribution, and sale of olive oil. Worldwide demand is growing and the supply chain needed to provide high quality oil to the world is in the process of being expanded and improved. There are a number of offshore investment opportunities related to this increase in demand. We look at a specific example of how an investor can become a part of and profit from the response to increasing demand.

The Oil of the Olive

Olive oil is a staple of the Mediterranean diet and has been for thousands of years. It is used in many recipes and is popular on tables and in kitchens across the globe as well as in the Mediterranean Basin. Its popularity has grown and, especially, because of the heart healthy effects of the oil is becoming more popular world wide.

According to the UNCTAD commodities web site page on this oil, it refers exclusively to oil obtained from the fruit of the olive tree and excludes all other oils obtained by using solvents or re-esterification. The term virgin oil only applies to oil produced in a mechanical process and at lower temperatures so as not to damage the oil. Refined oil refers to processed oil that still has the “triglyceric” structure of olive oil. If something else is mixed with the oil it is not marketed as suchl. This last fact is specifically different from many cooking oils which will list a number of possible ingredients such as palm, soy, or corn oil, etc.

This oil has a unique taste and is definitely the preferred oil for Mediterranean style cooking. Because of its unique structure it is the preferred cooking oil for heart healthy diets.

Olive Oil Consumption

The countries around the Mediterranean Basin account for roughly 77% of worldwide consumption. However, this figure is changing. Because the oil is an integral part of the Mediterranean diet it has little room to expand. Because the oil is just entering international markets it has a lot of room to go. According to recent figures the top five consuming nations are as follows:

Italy: 30%
Spain: 20%
Greece: 9%
USA: 8%
France: 4%

Countries that don’t rank very high on the list, like Japan, have just caught on to olive oil and are showing exponential growth in consumption.

Olive Oil Production

Olive oil is not just a historic product of the Mediterranean. Roughly ninety-five percent on olive oil is produced in countries bordering on the Mediterranean Sea. Ninety percent of production comes from the top six producers, Spain, Italy, Greece, Tunisia, Turkey, Syria, and Morocco. Portugal comes in 7th with 1% of worldwide production even though it only borders on the Atlantic Ocean (as well as Spain).

As consumption has grown over the years it is highly doubtful that these countries can cope with the increasing demand. For example, reliable figures say that 60% of cultivatable land in Greece is planted in olive orchards. There is just not a lot of room to expand production on the North Side of the Mediterranean.

Production and consumption grew together through the 1970’s to mid 1990’s when production tailed off. However, demand for olive oil has continued to grow. Reliable figures and estimates are that olive oil consumption doubled between 1990 and 2000 and will have tripled again by 2020.

The place where the weather is still “Mediterranean” and the soil conditions suitable for growing olives is the North African coast of the Mediterranean. Here is where countries like Algeria and Morocco are catching up with Tunisia with the intent of becoming major olive oil producers and exporters. Algeria is promoting a huge olive tree planting project making available a million hectares (2.5 million acres) of land for orchards.

Investing in Olive Oil

Olive oil investments are not always easy to get into. Production is highly fragmented with orchards historically owned and tended on small properties by families for generations. Refining is more concentrated. For example, in Spain in 1995 there were 80 refining companies including cooperatives. In the major producing countries the market is very competitive and there are typically substantial barriers barring the entry of newcomers.

Due to the expansion of olive production into the North African portion of the Mediterranean Basin here is where more investment opportunity lies. Countries like Algeria are welcoming and inviting investment. An example follows.

A Specific Investment

A Spanish company with an Algerian subsidiary is investing in olive trees in Algeria. It plans to plant 1,500 hectares of which 500 hectares (1,250 acres or roughly two square miles) will be open to private investment.

The company will plant the Arbequinia olive on this land. This olive is fast maturing so that it starts to produce after three years. It is very cold and drought tolerant, and, important for the investor, can be planted in a hyper intensive culture. What this means is that the Arbequinia olive can be planted 1,780 to a hectare. With this level of planting the Arbequinia will produce roughly 11,000 kilo of small brown olives per hectare. Because this olive routinely produces 19% weight per volume of oil it will produce about 2,000 liters of oil per hectare. This fact is useful for investors as return on investment after three years includes payment of $2 per liter of oil produced.

Because the company intends to export high quality olive oil will build its own processing plant in order to insure prompt and professional processing of the Arbequinia olive for export.

Considering the increasing demand for good quality olive oil and the difficulty in investing in the Northern Mediterranean an excellent opportunity may well to invest in a project such as that of this company on the South side of the Mediterranean Sea.

http://www.userbancorp.com

Contact me on e-mail: geir.holstad@userbancorp.com