Read Prudential reports at your peril! A recent Prudential Securities Inc. report has lost 22 million Koreans and reported population declines in four other Asian emerging markets as well: Malaysia; the Philippines; Singapore; and Thailand.
What's going on?
Greg A. Smith, chief strategist and chairman of the investment policy committee and author of the global equity research report, seems oblivious to the drops in population he shows in a table. In the table 1997 population figures are much higher than 1998 figures. Korea's population drops to 23.35 million people from 45.99 million (he doesn't state which Korea). Thailand to 60.3 million from 60.6 million. Without remarking on the declines, Mr. Smith optimistically remarks, "There will be many people to sell to if the world economy recovers." Many, yes, but, based on his report, fewer people in certain countries.
In another report Mr. Smith notes: "Market valuation models are only as reliable as their underlying assumptions, which often bear little resemblance to reality." The same might hold for population models. Mr. Smith declined to comment.