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One of the big drivers in the Emerging Markets is the Consumer Market
(rising middle class up to 2030)
Emerging Markets are currently trading at a much lower Price-Earnings-Ratio than the developed markets. As per June 2015 the Price-Book-Ratio is ca. 1.6 versus 2.3 in the other World-Indices (according to figures stated in the Austrian magazine "GEWINN" June-edition, 2015).
One of the main drivers of growth in the EM-Region ist the rising proporting of the Middle-Class. In the following chart it can be seen that this evolution made a significant step forward already in the year 2008:
By 2030, EY (Ernst & Young) believes that two-thirds of the global middle class will live in the Asia-Pacific region, up from just under one-third in 2009. On the other hand, although North America’s and Europe’s middle class populations will stay roughly constant, their share of the population will be drastically reduced — Europe’s by more than half, to 14% by 2030.
A significant proportion of the new Asian middle class are also expected to be at the upper end of the income bracket, with impressive spending power. This richer, global middle class will grow rapidly over the next years (according to EY). This growth will completely change the global wealth distribution (please find the relevant chart below):
Source: The World Bank, Kharas and Gertz 2010
find link for the report on EM: http://www.ey.com
