Goldman Sachs thinks so, saying that “the BRICs potential economic growth rates have probably peaked because of a smaller supply of new workers” and that “the four nations’ contribution to the global expansion will diminish during the next few decades“.

According to Bloomberg, BRIC funds recorded $15 billion of outflows this year as the MSCI BRIC Index sank 23 percent, EPFR Global data show. The gauge, which beat the S&P; 500 by 390 percentage points from November 2001 through September 2010, has trailed the measure for five straight quarters, the longest stretch since Goldman Sachs forecast the countries would join the U.S. and Japan as the top economies by 2050. 

All this comes after SocGen’s Albert Edwards called BRICs the “Bloody Ridiculous Investment Concept“… anyway, below are the Bloomberg article highlights, make your own conclusions:


Predictions by HSBC’s Arjuna Mahendra

- BRIC indexes may fall another 20 percent next year, buffeted by the liquidity squeeze stemming from Europe’s sovereign debt crisis
- Nations such as Indonesia, Nigeria and Turkey may overshadow the BRICS in the next five years as they expand from lower levels of growth 
- The slowdown we’re seeing in the BRICs will continue for most of the first half of 2012 because, compared to the U.S, corporate profits haven’t been that good as companies face higher wages, higher interest rates and currency volatility

More predictions…

Profit growth in the MSCI index will slow to 5 percent next year from 19 percent in 2011, trailing the S&P; 500 by five percentage points, according to more than 12,000 analyst estimates compiled by Bloomberg.
“We have likely seen the peak in potential growth for the BRICs as a group,” Dominic Wilson, an economist at Goldman Sachs, wrote in a report.

‘Meaningfully Slower’

“In emerging markets across the board, all the numbers are pointing toward meaningfully slower growth” next year, Rajiv Jain, who oversees about $15 billion as a money manager at Vontobel Asset Management Inc.

A bull in the crowd…

Emerging-market stocks will probably outperform U.S. equities next year as central banks in developing countries cut interest rates to stimulate economic growth, said James Paulsen, of Wells Capital Management. The MSCI emerging-markets gauge rose an average 35 percent after the BRIC nations began cutting interest rates in 2003, 2005 and 2008.
“I like the emerging markets better than anything right now,” Paulsen said in a Dec. 7 interview on Bloomberg Television. “Most of these emerging-market policy officials are turning to easing policies.”

Are BRIC stocks still expensive?
ICICI Bank Ltd., India’s biggest private lender, trades for 14 times profits, a 42 percent premium over San Francisco-based Wells Fargo & Co..
Want Want China Holdings Ltd., a Shanghai-based maker of food and beverages, is valued at 37 times profits and analysts project earnings will increase 7.7 percent this year…. while Kraft Foods Inc. trades for 17 times earnings. 
Redecard SA, Brazil’s second-biggest card-payment processor, trades for 15 times profits, versus 12 times for New York-based American Express Co. Sao Paulo-based Redecard’s earnings will probably slip 3.8 percent this year while American Express posts a 19 percent gain, analyst projections compiled by Bloomberg show.

More EM outflows, says Deutsche Bank

Outflows from emerging-market funds may continue next year as economic growth and company results disappoint investors, according to DB’s John-Paul Smith. “There will be a lot of volatility, but as people realize the underlying structural weaknesses of the BRIC economies, you’ll see money coming out.”
Money managers surveyed by Bank of America Corp. from Dec. 2 to Dec. 8 said their emerging- market holdings are still 23 percent higher than benchmark weightings even after they cut positions from last month.

U.S. Strength
By contrast, U.S. data is beating analyst expectations by the most in nine months, according to the country’s Citigroup surprise index. Per-share earnings in the MSCI BRIC index trailed analysts’ estimates by 13 percent last quarter, according to data compiled by Bloomberg. S&P; 500 profits beat projections by 4.4 percent, the data show.

Full article at Bloomberg

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