Follow These 2 Billionaires into the Emerging Market Building Boom

Video Transcript

Hi, this is Rudy Martin for Uncommon Wisdom Daily.

You might think that with the global economy slowing down, governments around the world would be cutting their spending. But in the emerging markets, the opposite is true.

China alone is spending $300 billion a year on transportation, power generation and other projects. And countries throughout Southeast Asia are following suit, building roads, bridges and ports to connect their new mega-cities and facilitate trade.

Latin America is getting in on the building boom too. The Panama Canal is undergoing a massive $5 billion expansion to increase the size and number of ships it can accommodate. This expansion, in turn, will likely spur the U.S. into action; all along the Eastern seaboard, ports will have to upgrade their facilities to handle the bigger ships.

Meanwhile, America’s closest neighbor is also seeing opportunity in the Panama Canal project. Mexico is planning to build a massive port in Baja, California, to rival the huge Long Beach, California, complex.

The country’s richest man, Carlos Slim, is getting into the infrastructure act as well, building toll roads and water treatment plants.

And never one to be left behind, Brazilian billionaire Eike Batista is also jumping in with the largest port enterprise in Latin America, and one of the three largest ports in the world.

This infrastructure spending boom extends to other emerging markets as well.

In Turkey, South Africa and the Middle East, a total of $1.4 trillion is being raised over the next three years, for airports, roads, railroads and ports.

All in all, half of the world’s 30 most expensive projects are in China, Brazil, the Middle East and other developing countries. Topping the list is China’s South-North Water Diversion plan, which will use the Grand Canal and other sources to channel water to Beijing and other fast-growing northern cities. It’s a truly enormous project diverting nearly 45 billion cubic meters of water a year. That’s equivalent to about half the amount of water consumed in California annually.

With all this infrastructure spending going on overseas, the U.S. will be hard-pressed to keep up. The latest extension to the transportation bill is set to expire at the end of this month, and the nation’s roads are in desperate need of repair.

By passing a new bill, Congress could give an instant stimulus to the construction industry, which suffered a loss of 28,000 jobs last month. And for investors, new roads, bridges and mass transit projects could mean a rally in shares of undervalued infrastructure and materials stocks.

I’m Rudy Martin for Uncommon Wisdom Daily. Thanks for watching.

Rudy Martin, editor of Global Trend Trader, is the President at Acamar Global Investments, with 25 years of experience serving institutions and high net-worth individuals.

Rudy started his investment career in 1983, co-managing a $2 billion private investment portfolio for Transamerica. Later, he went on to Wall Street as an equity analyst for Dean Witter and traveled globally, serving major institutional equity investors. In 1995, he joined Fidelity Investments as a Senior Investment Analyst for a series of multibillion-dollar fund portfolios.

During his career, Rudy has received awards for institutional investing and is widely quoted in the financial press and on television about topics related to global investing and emerging markets. For more information on Global Trend Trader click here.