Americas markets wrap: Euro fears and oil slump pare weekly gains
European worries rattled markets again on Friday, prompting investors to sell off Latin American stocks and currencies as oil prices fell and the euro hit a new 18-month low against the dollar.
“The question marks regarding Europe and sustaining the euro are bringing up worries about systemic risk,” said Ed Kuczma, an emerging markets analyst at Van Eck Global. “Emerging markets being a risky asset, they’re taking the brunt of it.”
Mexico’s tax regime tops competitiveness rankings
If you you’re not scared by the bullets, rocket attacks or the all-too-frequent reports of decapitations that have become the stamp of Mexico’s war on drugs, come and take advantage of the country’s competitive tax regime.
According to a study published this week by KPMG, Mexico has the most competitive total tax regime of 10 countries examined by the business research company. And in this year’s incarnation of the report, Latin America’s second-biggest economy maintained its number-one spot for the second consecutive occasion (it is the only emerging market included in the list of countries).
Estonia pulls IPO amid market gloom
Another IPO falls foul of the market. Estonia’s government has scrapped plans to list Eesti Energia on the London Stock Exchange in what would have been a €400m-€500m IPO – the biggest foreign privation for three years.
The company said in a statement that the government had decided an IPO would “not occur in the immediate future”, attributing the decision primarily to “global financial market conditions”. With markets down across central and eastern Europe this week, it is hard to argue.
Posco Ukraine steel deal edges closer
The global march of east Asia’s steelmakers could be about to extend into eastern Europe, if reports from Kiev are correct. South Korea’s Posco, the fourth largest steel maker in the world, is said to be on the verge of breaking into the Ukrainian steel industry.
If it succeeds, it will join global leader ArcelorMittal in a country where multinationals must fight it out with groups dominated by Ukraine’s politically-influential billionaire oligarchs. This could be good news for Ukraine in terms of bringing more world-class management into the steel industry. But it might be bad news for steel makers based west of Ukraine in the European Union, where costs are higher.
Mumbai’s market goers bear the brunt of Indian inflation
The Indian government’s calibrated strategy of cutting back on inflation appears to be working, as it announced lower annual inflation this week. But the price of food has been steadily rising, a fact that every Mumbai market goer is vocal about. Alongside an April inflation rate of 0.59 per cent was a climb in food inflation – 16.87 per cent in the month of April.
Wholesale fruit and vegetable vendors operating at Mumbai’s Crawford market tell beyondbrics that the rise in food prices is just a matter of perception. Their customers, on the other hand, don’t seem to agree.
By Neil Buckley and Neil MacDonald in Zagreb
The eurozone crisis hangs over the otherwise sunny Croatian capital like a black cloud. But central eastern European participants at today’s annual meeting of the European Bank for Reconstruction and Development in Zagreb are keen to differentiate themselves from eurozone countries now plagued by sovereign debt, as the EBRD shareholder governments decide whether to boost the bank’s capital base by 50 per cent.
They gamely stress they are not like Greece, only starting out on its painful fiscal correction. This region went through its crisis last year, they say, took its medicine early, and in many places is already perking up.
Like Tesco or like Wal-Mart? – Debenhams seeks its own path into Korea
Debenhams has become the latest multinational retailer to set foot into South Korea’s competitive retail market. It plans to open four stores in the country by early next year in cooperation with a local partner.
History offers plenty of lessons, and warnings, on how to tempt Korean consumers to the tills.
CEE markets snapshot: stocks, currencies lower on Spain deflation scare
Eastern European equities and currencies saw selling today after Spanish consumer prices fell. Fears that deflation in Spain could worsen the country’s debt problems hit the euro, and European sentiment. But the region remains on course for its best week in five months.
“While eastern European markets could cope with the Greek crisis by itself, they were negatively impacted as the crisis began to spread and damaged the whole European outlook,” said
John Lomax, head of emerging equity strategy at HSBC in London.
New York headlines
*Chávez seizes assets of Mexican food producer
*Investors react to latest Thai protest death, street battles break out in Bangkok
*Lula buoys bonds with a $5.6 bn spending cut to curb inflation
*Huawei attempts to win over India with source code offer
*StanChart expects Indian profits to exceed HK
*China makes another big US corn purchase
*China May Expand Yuan Settlement to 18 More Provinces
*Rusal back in black, says demand in Asia is very strong
*Hong Kong’s economy grows 8.2 per cent from previous year
From Vietnam to Peru – the Pacific free trade movement gathers pace
There was a certain amount of sophisticated eyeball rolling among western trade experts when Ron Kirk, the US Trade Representative, announced in November that Washington planned to join the fledgling Trans Pacific Partnership trade area.
To some, the announcement looked like a way of allowing the Obama administration to appear to be engaging with Asia on trade without exposing the US to serious free trading commitments.
After all, the TPP currently involves New Zealand, Chile, Singapore and Brunei, a group of small and open economies with trade flows much too small to set anyone’s blood racing. But it could yet turn into something much, much more significant.
Asia markets wrap: equities lower on risk, Shanghai property
Mainland Chinese equities continued to feel the effects of Beijing’s growing determination to cool overheating property markets. The China Securities Journal reported that Shanghai’s municipal government was putting up nearly 40 lots of land for sale in the city’s most extensive offering, designed to cool prices by increasing supply of development sites.
Indian banking stocks were also under pressure, caught up in a general move away from risk in the wider region, where most indices ended a turbulent week little changed on the day, with defensive stocks providing protection as sentiment across Asia remained cautious.
Is India’s infrastructure fund the wrong medicine?
India is planning to set up a $11bn fund to expand its overburdened infrastructure, aiming to mobilize up to 40 per cent of the total from foreign sources, as it seeks to tackle one of the biggest bottlenecks to its accelerated growth.
But analysts say the money is already there – local politics is what gets in the way.
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