US Economy Returns to Growth

After a year of the largest economic decline in nearly 7 decades, the US economy has finally returns to growth. The US economy showed signs of recovery as the US Department of Commerce recorded an economic growth rate of 3.5% during the third quarter. Consumer spending was up nearly 3.5% as well, the largest quarterly rise in about 2 years.


US New Home Sales Decline


After 5 months of rising new home sales in the US, figures for September were down 3.6%. Many economists attribute the drop to the end of the first-time homebuyer tax credit. The decline was most evident in the South and West, while new home sales were up 35% in the Midwest.

FDI to Vietnam Plunges


Foreign direct investment into Vietnam is down 12% so far this year and new commitments for foreign investment projects is down over 70%. FDI had previously been key to helping Vietnam balance its trade deficit.


Australia, Cook Islands Sign Tax Info Exchange Agreement


The Cook Islands and Australian governments have signed a tax information exchange agreement, further closing the door to any possibility of Cook Islands returning to its former tax haven status. Since nearly 50,000 Cook Islands citizens live in Australia and New Zealand, this treaty is seen as favorable to Cook Islands tax authorities as well.

World's Largest Economies See Signs of Recovery

FDI to BRIC countries Rising


The world's largest developing economies posted significantly higher FDI figures, signaling that the worst of the global foreign investment slump is behind us. Brazil's inward FDI rose to $ 2.5 B in September, up about 25% over August totals. Russia recorded a significantly lower net FDI outflow, indicating the return of foreign investors into the Russian economy. FDI to China rose nearly 20% in September, while FDI to India inAugust was up 40%.



Chinese Economic Growth Accelerates


China released news that its growth rate for the first 9 months of 2009 averaged slightly above 7%, but that things picked up to 8.9% in the third quarter. A significant rise from the low rate of 6.1% in the first quarter, China's economic stimulus is being credited for creating a quick rebound.


US Real Estate Market Rebounding


We finally have news to suggest that the US housing market has begun to rebound. Although pending US home sales rose for the 7th consecutive month in August, existing home sales were still slumping. However, a report released today by the National Association of Realtors showed that existing home sales in the US rose as much as 9.2% in September, the first such rise this year.



Tax & Law


Singapore recently reported a surge in offshore banking activity from Russians, but in the face of mounting pressure to improve transparency, it has changed its attractive tax structure. This week, Singapore passed a tax disclosure law aimed at forcing banks and trusts to provide information if a treaty nation requests specific information for tax purposes.

The World's Fastest Growing City

Hong Kong, Shanghai, and Beijing are undoubtedly popular and powerful, but no longer China's fastest growing cities. There are several lesser-known, emerging cities that are developing at lightning speeds--but none of them quite like Chongqing. Unless you have personal or business ties in China, chances are you've probably not heard of Chongqing.


Located on the Yangtze, some 900 miles inland, it's the heart and economic engine of southwest China. Its metropolitan region (municipality) has the population of California crammed into an area the size of South Carolina. Despite its massive size and growth, it still has a long way to go, making it one of China's best investment destinations.


Statistics show that Chongqing is not only the fastest growing urban area in China, but perhaps in all the world. An estimated half million people move to Chongqing's urban core annually. So you can imagine that the local real estate market is expanding fast, giving investors great opportunities. Chongqing's real estate sales area (total space within the market) and the value of its real estate market grew by roughly 38% and 64% respectively since 2008. Unlike most cities, Chongqing has already recovered from the real estate market slump as both home prices and second-hand home prices grew by 0.2% and 3.1% respectively this year.


With an expanding and robust economy, there's no wonder why the city's population is booming. From January to June 2009, local economic growth stood at an enviable 12.6%, slightly less than last year's 14% increase.


As China's automobile sales continue to climb at over 20% annually, Chongqing will certainly benefit. It's one of four major automobile manufacturers and one of the largest industrial metals producers in the country. In fact Chongqing is becoming both the Detroit and Pittsburgh of China. For instance, Ford Motor Company's largest Chinese plant is located in Chongqing and over one-third of all China's motorcycles are produced here as well. Thanks to a growing demand for Chinese exports, Chongqing Iron & Steel Company is set to become the largest shipbuilding steel producer in China by 2010.


This mega city is also becoming the new Silicon Valley of the East. Recently, Hewlett-Packard (HP) and Foxconn Technology Group announced their joint $ 3 B investment in a laptop manufacturing hub in the heart of Chongqing. The news follows closely behind the local government's announcement that the city will host China's first 3G Technology Park, which includes major IBM and Infineon manufacturing operations.


Manufacturing is only half of what is presently driving Chongqing's growth. The city is a growing center of both research and finance. Chonqing is known for its research in traditional medicine, contemporary pharmaceuticals, and agriculture. Moreover, the government plans to make Chongqing a major financial hub by 2015 with the building of the Chongqing Financial Center in the Jiangbeizui business district.



To keep up with Chongqing's growth of commerce, an astonishing 1.5 million square feet of office space is added each year. This includes more commercial skyscrapers in the pipeline than anywhere else in China. The following are presently under construction:


- Jialing Fanying, 468 m, 105 floors (pictured at right)


- ASE Center R6 at 463 m, 88 floors


- Sun Valley Tianhe Tower 450 m, 95 floors


- Chongqing International Financial Center, 431 m, 102 floors


- Financial Street, 430 m, 81 floors


- Chongqing Global Financial Building, 331 m 81 floors


- Lanko International Mansion, 330 m, 72 floors


- ASE Center R5, 320 m, 61 floors



- Yingli Tower, 318 m, 72 floors (pictured at right)


- Poly International Plaza, 300 m, 60 floors



Huge investment in transportation and general infrastructure is underway with the building of several dozen subway lines as well as thousands of miles of roads and highways, including the completion of over 900 miles of highways by the end of 2009 alone. There's also a new airport terminal in the works, a new railway container terminal, an inland free trade zone--well, the list goes on from here.


Now you get the idea that Chongqing still has a long way to go, and its astounding rate of growth provides ample investor opportunities.

The Steel City Refuses to Rust

After years of economic restructuring and in spite of a dwindling population, the Steel City is perhaps better than ever. Pittsburgh must be doing something right because The White House chose it as host of the upcoming G-20 Summit of world leaders. City officials hail the event as a chance to showcase the major improvements and attract future events. The Summit also confirms Pittsburgh's new status as a world-class city and the great American success story.


There are myriad reasons behind this success. For one the area is home to the 8th largest concentration of Fortune 500 companies nationwide, partly behind Pittsburgh's low unemployment rate and its remarkable personal income growth rate. Steel and coal giants, US Steel and CONSOL are still big players in town but the University of Pittsburgh Medical Center is now the area's largest employer. Another top employer in town is PNC Bank, which grew to become the country's 5th largest financial institution through acquisitions and its avoidance of the sub-prime mess. These large institutions are all packed into the nation's 6th densest central business district--a great place to locate your business as well.


Don't let its small population of roughly 315,000 people fool you. Pittsburgh definitely has all of the normal big city amenities: from major league sports teams to world class museums and theaters; from first-rate shopping to skyscrapers--this is definitely a major cultural and economic hub. Thanks to all this town has to offer, smart investors know that Pittsburgh is both undervalued and poised for economic growth.


It seems like just about everyone's talking about the Steel City:


- Forbes named Pittsburgh its 6th best city for job growth in 2009.


- The Economist declared Pittsburgh the 29th most livable city in the world, beating out every other city in the US.


- Mercer ranks Pittsburgh as having amongst the lowest costs of living nationwide.


- The New York Times can't seem to get enough of the Steel City, calling it both "cool" and "hip."


A renaissance is currently underway in the heart of town. Old factories and historic office buildings have recently been converted into condos, bringing thousands of new residents downtown. Several miles of the riverfront are being redeveloped and major projects are sprouting up around town:


- North Shore Center. Early this year the North Shore redevelopment brought hotels, office buildings, and retail to the area adjacent to the stadiums and new casino.



- Three PNC Plaza. Two weeks ago, Three PNC Plaza, the first skyscraper to be built since 1987 opened. A LEED certified building, the project includes a Fairmont hotel, condos, retail, and office space.


- August Wilson Center for African American Culture. Opened earlier this year, the center brought a new theater, museum, and classrooms to Pittsburgh's cultural district.


- Casino Gaming. The Rivers Casino opens this week on the city's North Shore, bringing 1000 jobs and the potential for more tourists.



- New Arena. The Consol Energy Center, is currently under construction to provide a new home for the NHL champions, the Pittsburgh Penguins. The arena will open in time for the 2010-11 season.


- Point Park University Expansion. The university recently purchased buildings along Wood Street in hopes of creating an attractive and livable university neighborhood in the heart of town. It plans to build a new academic village, a theater, residential halls, student centers and a park.


- Light Rail/Subway North Extension. The ambitions plan calls for an underground station at the convention center and a tunnel connecting to the North Shore.


For the aforementioned reasons and many more, Pittsburgh is one of America's best up-and-coming investment destinations. Below, we've listed our top 3 ways to invest in the Steel City:


1. Downtown Housing. Since only 5,000 people actually live downtown and due to a growing sentiment amongst suburbanites to live closer to their downtown jobs, an investment in downtown housing could be a good idea. There is growth in this housing market through the conversion of older buildings or developing on parking lots; however, the city government is providing incentives to developers who convert vacant upper levels of office buildings into residential space. Downtown's small size and high density of office buildings means that there is potential for property appreciation.


2. Downtown Retail. Locate a restaurant or other retail establishment in the re-emerging Market Square district or the North Shore. These areas are currently undergoing revitalization; Market Square Place is within walking distance from several Fortune 500 companies and the North Shore center gives you access to sports fans and casino goers.


3. Single-Family Homes. Nearly 50% of Pittsburgh homes have sold for less than $ 100,000 this year, but prices could go higher once the national real estate market gets better. You might be able to find a better deal than you think, especially if you're willing to buy a fixer-upper. Check the
city's inventory as well as other sources for foreclosed and distressed properties.

Top 10 Fastest Growing Economies

The global economic recession doesn't mean that every economy has to suffer. The following list features countries that are still witnessing stellar economic growth rates, although slightly lower than in previous years. The majority of the countries on our list are in Sub-Saharan Africa, which are both diversifying away from primarily commodities-based economies and developing infrastructure. The remaining countries on the list are in Asia. Western nations, specifically in Europe suffered the biggest declines and aren't expected to see positive growth until 2011.



10. The Gambia +3.8%

Down considerably from last year's growth rate of more than 6%, Gambia was affected by a decline in commodities prices. Agriculture makes up the vast majority of the West African nation's economy, but tourism is now its fastest growing sector. Most tourists are European, but future growth in the industry will depend on expanding to include American tourists as well.










9. Indonesia +4.2%

Although its economic growth has slowed to a 6-year low, continued growth in government and consumer spending has kept the economy afloat. Most government and private sector development has gone primarily to the telecommunications and transportation industries which saw double-digit growth rates.






8. Tanzania +5.3%

Tanzania continues to grow, albeit less than last year, as it is less dependent on agriculture. Significant growth has been seen in the tourism, services, and mining sectors. The mining industry has grown so much that Tanzania is now Africa's third biggest gold producer, with metals exports growing at an average annual rate of 4%.






7. India +5.8%

After growing by nearly 9% in 2008 and close to 10% in 2007, things have definitely slowed down. A sharp decline in FDI of over 40% is certainly to blame, as the US overtook India as the second largest recipient of FDI this year. Economists are optimistic that economic growth will pick up in 2010, but don't expect a return to its normal 9% rate until 2011.









6. Djibouti +6.5%

A key port of entry to East Africa and the Red Sea, Djibouti has been a key recipient of FDI in the region. Most of that investment has gone to the service sector, which makes up over three quarters of the economy. Although, Djibouti's banks have benefited most, future growth will be in infrastructure--specifically with the development of Al-Nour city and intercontinental bridge projects.










5. Republic of Congo (Brazzaville) 6.5%

The growth of the oil sector over the past decade has contributed to its robust average annual growth rate of over 7% from 2005 to 2008. Home to a portion of the world's second largest rain forest, there is potential for future growth in eco-tourism as well as infrastructure development in the capital, in which 1/3 of the country resides.










4. Ethiopia 6.5%

The government's program to pave and expand the country's roadways is mainly responsible for continuing economic growth this year. As a result, travel times have been cut in half, vastly improving the flow of commerce.

Despite a slower demand for the country's chief export, coffee, lower oil prices have pretty much balanced things out. Future growth is seen in the growth of luxury exports such as leather.






3. China +7%

After slowing to a rate of 6.1% during the first quarter, China recently returned to its normal average annual rate of nearly 8%--in line with government forecasts. The "easy credit" stimulus program pushed the growth of both consumer spending and exports back to double digits. Nonetheless, the government cautions that recent growth depends largely on the stimulus due to a worldwide decline in demand for Chinese goods.









2. Malawi +7%

Surging corn, tobacco, and telecommunications industries have propelled Malawi to become Africa's fastest growing economy. Although things have slowed down this year, the country is still growing briskly. Further growth can be seen in other agricultural products like tea and sugar as well as in the eco-tourism sector thanks to Lake Malawi and wildlife.







1. Qatar +9%
Not nearly as popular as other Persian Gulf investment destinations, Qatar offers the world's fastest growing economy and one of its wealthiest consumer markets. With 15 Billion in oil reserves, the petroleum industry has long been the cornerstone of its economy. As a result, the national GDP per capita is one of the world's highest at over $65,000.


In order to maintain economic growth, Qatar has realized the need to diversify. With 5% of the world's natural gas resources, the gas industry has recently become the largest contributor to the national GDP. But, government plans to boost tourism to 1.4 million annual visitors will help revive its retail and hospitality industries.










* Average economic growth rates calculated for the first half of 2009 using respective national government and IMF data resources. Images courtesy of respective government tourism agencies.

Building a New Lagos, Nigeria

Sub-Saharan Africa's largest city in its most populous country is now open for foreign direct investment. According to the World Bank, Nigeria remarkably grabbed nearly 30% of all FDI to sub-Saharan Africa last year, making it one of the continent's premiere investment destinations.


The recent development of Nigeria's oil sector is responsible for having catapulted its GDP nearly 200% in just two short years. Oil contributes roughly 20% to the national GDP and over 10% to US oil imports. Amidst global economic decline, the Nigerian economy is still expanding at nearly 3% this year and the country continues to increase both oil and non-oil exports.


As the government improves its banking sector and diversifies its economy away from the oil sector, it has attracted foreign investors that realize the country's vast potential for further economic growth. A testament to both the growth of the non-oil economy and brisk expansion of capitalism in the third world, Nigeria is home to a surging number of wealthy entrepreneurs such as billionaires, Aliko Dangote (sugar, flour, cement), as well as Femi Otedola (oil).


Lagos, Nigeria's chief port and financial hub, is at the heart of all the action. The Lagos state government is rather serious about attracting foreign direct investment (FDI) and is taking measures to open itself to international investors.


Not only has Lagos become more business friendly, it has a host of ambitious projects underway that promise to transform it from a chaotic, third-world city, into Africa's world-class center of commerce, trade, and tourism.




Housing Developments


Nigeria's Federal Housing Authority will increasingly rely on private developers to fill the shortage of housing. There is a strong need for new housing developments in the country's largest metropolitan area of over 15 million people. At an estimated average annual rate of over 4%, Lagos is one of the fastest growing cities in the world. By UN estimates, there will be over 25 million people in the Lagos area by 2015.



Developers now have a chance to help Lagos solve its urban housing crisis by providing either affordable or luxury housing units--or both.



The Lagos state government is willing to provide land and support to developers who are equipped to construct housing units--especially for low-income dwellers. Although there are many areas of town that require new housing units, there are a few mega-projects in the works that are partially designed to meet these needs.







In its early stages of construction, Lekki will be a city within a city, complete with not just housing, but office space, hotels, tourist attractions, a free trade zone, a shipping port, and an airport. In order to give you an idea of just how massive this project is, the government's master plan calls for housing for nearly 3.4 million people!




The next mega-project underway is Eko Atlantic City, another mixed-use project that will incorporate new housing developments. Slated for 8 square miles of land reclaimed from the Atlantic Ocean, this new community will soon boast modern infrastructure, pricey real estate, and access to big businesses.



Investment Properties


Both residential and commercial investment properties in Lagos have appreciated over 200% in 2008. Because demand for housing is so high, the potential for a huge return on real estate investments is high as well.


Before investing, it's important to consider the following information:


- By law, Nigeria has NO land ownership


- Property investing is only possible through a 99-year leasehold for which you get a certificate of occupancy (COO) from the state government and pay an annual fee


- After expiration of the land lease, the land is returned to the state government and the structure remains with the private owner



Property investment trends indicate that most international investors choose to build multi-unit residential structures or invest in commercial real estate projects. It's common practice for Nigerian property owners to request rent payments for several months in advance, so you should too.


Lekki Free Trade Zone Business Opportunities


Lagos is modeling the Lekki Free Trade Zone after Dubai's successful Jebel Ali Free Trade Zone in hopes of attracting more foreign direct investment. Lekki promises to be the shipping, industrial, and business hub of not only Lagos, but of all of West Africa. As an incentive for doing business in the zone, goods will be duty-free, companies may be 100% foreign-owned, and capital will not be subject to exchange controls.


Lagos Energy City Opportunities


Officials are working to convert a portion of the Badagry Town, just west of Lagos, into a massive oil and energy-related business community. At an estimated total cost of $ 1.8 B, Energy City will be complete with a light rail, a tourist/convention zone, as well as a separate zone that caters to oil and gas companies, government agencies, and other private enterprises. Again, the state government is open to private developers with the resources to construct commercial buildings.


Alternative Energy


A good way to participate on Nigeria's solar power industry is by providing it to villagers. According to Kadiri Hamzat, the Lagos State Commissioner for Science and Technology, it costs just $ 83,000 to set up a solar power system in a village of about 5,000 people. Considering that it costs over $ 1 Million to connect a village to the national power grid, solar energy is extremely cheap.


In a world that is still unconnected, electricity can enable these villagers to improve their quality of life.


At just $ 83,000 per village, large solar energy providers could easily contribute charitably to villagers by building their solar power systems. Such generous efforts will undoubtedly improve the image of your solar company and serve as further evidence for why we should continue to invest in the solar industry.









Although Lagos may seem attractive, there are two common deterrents: bureaucracy and safety. Government officials are certainly making a strong effort to attract foreign capital; however, bear in mind that the government still has a long way to go. Bureaucracy is frequently blamed for the excessive amount of time it takes to do business, but that is changing. By comparison, Nigeria ranks well amongst sub-Saharan African countries when it comes to ease of doing business.


Foreigners shouldn't assume the worst when it comes to safety because Nigeria's overall violent crime rate is lower than that of the UK, France, Switzerland, Canada, and of course the US. Furthermore, crime in Lagos state has dropped significantly in recent years in spite of explosive population growth and remains behind the Nigerian Delta region.


In the world of emerging markets, it rarely gets better than Lagos: explosive growth of both population and wealth; development in every direction; growing oil, gas, and alternative energy industries; government cooperation; and potential for tourism. Need we say more?


*Images courtesy of Lekki Free Trade Zone Corporation & Eko Atlantic City Corporation
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London Is Ripe for Investing

As rental and real estate prices hit 16 year lows, London might finally be ripe for international investment. The British capital once known for being one of the world's top 3 most expensive cities has become relatively affordable--at least by London's standards. Based on Mercer's 2009 annual survey of expensive cities, London is presently less expensive than both New York and even New Delhi. Thanks to a significantly weaker British Pound Sterling and a housing market bust, new opportunities in up and coming neighborhoods abound.


Of course, these opportunities won't last for long. London will once again re-claim its title as one of the most expensive and most popular cities. At the heart of London's re-emergence will be the 2012 Olympics Games. The games and all associated projects promise to inject billions of dollars in investment into the local economy. Construction on a new Olympic Park and Village is underway and will undoubtedly transform the previously blighted, industrial East End in the Lower Lea Valley. These surrounding communities are now London's hottest up-and-coming investment destinations.



Olympic Park & Village


Over 3,300 housing units will be created for Olympic purposes but will be available to the public after the Games have ended. This will serve as one of city's newest neighborhoods, right next to the newest big park to be built in London in over a century.





Stratford


Locating in Stratford gives you extraordinary access. Located directly east of the Olympic Park in the Newham borough, you're in the center of Olympic venues. The area is home to a new town center, dubbed "Stratford City," which has converted an old rail yard into a town center complete with new shopping centers, housing, and high rise office towers.


Transportation to Heathrow, London's busiest international airport will be mitigated with the addition of the Crossrail underground rail line. The rail station will be linked to Stratford's busy underground hub station. Stratford will also welcome an international rail station, linking the community to the "Chunnel" (High speed Eurostar link underneath the English Channel) and providing easy access to Paris and Brussels.


Home prices in the area did not hold well during the recent real estate bust; however, we expect that to change. Stratford's face lift and new infrastructure will add value to property. Home sales currently average amongst the lowest in all of London at just 212,000 GBP or just $ 338,000.



Hackney (Hackney Central, South Hackney, Shoreditch)


To the west of the Olympic Village and directly east of the City, lie the East End neighborhoods of Hackney, one of London's most cosmopolitan communities. Once plagued by a bad reputation, the borough has recently become gentrified and has attracted a horde of cafes, bars, and art galleries. A new Tube extension will link Hackney Central station to the more affluent Chelsea on the West End.


Home prices in Hackney actually rose about 3% in 2008 compared to a city-wide slump. The average home sells for 311,000 GBP ($ 497,000) or 40% less than in Westminster, home to Buckingham Palace and Parliament. It's important to consider that those 311,000 pounds would have converted to about $ 606,000 had you bought at this time last year.


Bow


Located in the borough of Tower Hamlets, Bow is another of London's most accessible places. Of course the name of the borough is synonymous with the Tower Bridge and the Tower of London, both of which are located here. The area is at the crossroads of the reemerging East End to the Northwest, Stratford and Olympic Park to the Northeast and The Isle of Dogs/Canary Wharf business district to the South. It has a Tube station and is served by the new Docklands light rail system.


Bow is one of the most undervalued residential areas north of the Thames and the average home price is 310,000 GBP ($ 487,000). A year ago, that same price in sterling would have been $ 620,000.



Greenwich


With its strategic location and important role in the Olympic Games, Greenwich is a superb investment destination. Located across the Thames from Canary Wharf, on major rail lines, and close to London City airport, this previously sleepy borough has awakened. Thanks to its waterfront, parks, and the famous Millennium Dome, Greenwich will host more than one-third of all Olympic venues. As a result, the borough council offers support services to businesses who wish to benefit from the games by locating here.


Aside from business opportunities, Greenwich offers among the best property investment opportunities in the city. Home prices here average just 242,000 GBP or roughly $ 381,000, making it one of London's most affordable areas. Of course a year ago that same price in quid would have been over nearly a half million dollars.




For Britons, London real estate offers a nice bargain, but for Americans, properties are available at fire-sale prices. While everyone would enjoy the pleasures, conveniences, and glamour of Kensington, Chelsea, and Westminster, the best buys are in the reemerging areas well to the east of Her Majesty, the tourist traps, and square mile financiers.


* Sources for real estate price information: BBC and Land Registry of England and Wales.


* Photos courtesy of: Greenwich Council, London 2012 (ODA)