Latin American stock markets and currencies suffered a rough-and-tumble week on the back of continuing fears about Greece and the vulnerability of other eurozone members before finally making up a little of the lost ground Friday.
With rights issue, Banco do Brasil stays out in front
So, Banco do Brasil is to go ahead with an R$8bn rights issue that could rise to R$15bn if Brazil’s national treasury decides to sell part of its controlling stake (though not enough to relinquish control).
The issue has been expected for some time, though nobody could have foreseen that it would be announced during a period of such upheavals on global markets. Still, Banco do Brasil should not worry. Brazil’s banking system remains largely shielded from turmoil overseas by its small exposure to foreign borrowing. And Banco do Brasil still has a compelling story to tell.
The government is the real winner in Ambani gas case
So, who is the real winner in the Supreme Court’s ruling over the price of gas coming out of the Krishna Godavari Basin: Muskesh Ambani, India’s richest man, or his younger brother Anil Ambani ? Neither it appears, as the two have still six weeks to reach an agreement over the price.
The real winner looks to be the government, as it confirmed its right to control gas prices and overwrite contractual obligations between Reliance Industries and Reliance Natural Resources.
Philippines presidential race – it’s the how not the who
Investors, who are normally interested in outcomes rather processes, want it the other way around as the Philippines goes to polls to choose a new president next Monday.
Confident that the front-runners for the presidency, particularly senators Benigno Aquino III and Manuel Villar, will hew closely to more or less the same economic policies, analysts for international banks are paying closer attention to the credibility of the elections.
CEE snapshot: Equities lower as investors shun risk
Eastern European bourses follow Asia lower, with Russia looking at its worst week in 2010. The negative fall-out from Wall Street’s volatile session and soaring Greek yields prompted heavy selling in morning trade. Emerging markets bonds saw their worst week since November 2008, while CEE currencies bounced back after a torrid session on Thursday.
Infrastructure investment in Asia and Latin America is beginning to drive a recovery in credit demand, HSBC, the world’s biggest bank, reports today in a first quarter statement, which also highlights a decline in charges for bad and doubtful debts everwhere except the Middle East. The news sent the shares soaring 8 per cent, despite the rotten market, though they later fell back and traded around 3.5 per cent higher at 650p.
New York headlines
*Indian Supreme Court rules in favour of Mukesh Ambani’s Reliance
*Asian markets tumble across the board
*Brazil cuts local debt sales as yields surge to 14-month high
*HSBC profits up, bad debt down – shares gain
*African states may seek separate trade deal: Lamy
*Yuan revaluation ‘shock’ warning
*McDonald’s aims to expand China franchise trial
*Mexican peso drops most in year on Greek debt crisis
*L’Occitane shares fall on HK debut
*Mexican exchange sees renewed IPO activity
*Shanghai composite world’s fifth-worst performer after indebted Europeans
*Ethiopian prime minister welcomes Chinese interest
*JP Morgan names new investment banking head for India
*Fears Indian IPOs may suffer
*Markets: Down
Asia markets wrap: markets down, Hong Kong IPOs on hold
Asian equities came under strong pressure as the reverberations from the Dow’s jolt lower on Wall Street prompted foreign investors to withdraw money from the regions markets in a rush away from risk. Market jitters saw Chinese miner Tian Yuan pull its initial public offering one day after Swire Pacific delayed its $2.7bn Hong Kong IPO. French cosmetics group L’Occitane fell as much as 8.5 per cent on its Hong Kong debut, after raising HK$5.5bn (US$707m) last week.
One of the collateral impacts of the carnage in global markets over the last few days could be a delay in any Chinese decision to begin appreciating its currency. That, at least, is the message from the onshore forward market for the Chinese renminbi which is now implying an increase in the value of the Chinese currency of only 0.8 per cent over the next 12 months – well down on the sort of appreciation that was widely expected only a few weeks ago.
further reading
From the FT
From elsewhere
L’Occitane makes rough debut in choppy Asian markets
In stormy markets, even popular stocks will wilt. So it was today with the debut of L’Occitane, the French cosmetic group, which tumbled 8.5 per cent when trading started in Hong Kong, hit by the the turmoil in global markets. The shares later recovered almost all their lost ground and traded 1 per cent down. But the message from this $708m offering was clear – in these markets, go for an IPO at your peril.
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