Jamaica’s state of emergency
What awful timing. Just when Jamaica seemed to be turning a corner, after making a milestone deal with the IMF in February, this had to happen.
The chaos in Kingston (with almost 30 killed in drug-related violence since a state of emergency was declared last Friday) threatens to seriously undermine the Caribbean island’s all-important tourism industry.
Americas markets wrap: Global risk flight on Europe and Korea fears hits equities
The global sell-off spread to Latin America on Tuesday as investors sold risky assets on eurozone fears and escalating tensions between North and South Korea.
The flight to safety is likely to intensify, Diana Choyleva of Lombard Street Research wrote in a note to clients today:
The festering European debt crisis and renewed North Korean tension reveal the fragility of liquidity support to risky assets. Their recovery has been driven purely by a fall in the demand for holding liquid assets amid collapsing world broad money growth despite some central banks’ quantitative easing efforts.
Tracking the global recovery
How quickly is the global economy recovering? Which countries are leading the way and which are lagging? How does trade growth compare with employment growth? And how to emerging markets compare with the developed world?
You can examine these trends in a new index tracking the health of the global economy, launched today by The Brookings Institution and the Financial Times. The index looks at economic, financial and confidence indicators across emerging and developed markets, providing a snapshot of the world economy.
A headlong rush for safe havens today set the tone for a grim day of trading in emerging markets. Fears over geopolitical tensions in the Korean peninsula, where North Korea declared itself ‘combat ready‘, spread across Asia and combined with continuing concerns about the eurozone. At 1700 BST, the MSCI world index was down 1.6 per cent, its lowest level since September of 2009, and the MSCI emerging markets index was 4.1 per cent lower on the day and 12.8 per cent on the year so far.
The selling storm swept through emerging Europe, bringing the Romanian equity market down by 10 per cent and Ukrainian by 6.15 per cent. Analysts warned it could foreshadow grimmer things to come in the region.
“We’ve passed the worst of the financial crisis but financial risk remains high,” Neal Shearing, senior emerging markets economist at Capital Economics said.
‘Made in Mexico’ gains ground on China as attention to detail boosts US demand
Who said that Mexico’s maquila model was dead? At the beginning of the decade, many economists and trade experts predicted that the practice of importing goods duty-free into Mexico for assembly and re-export was doomed because the country would be unable to compete with China.
Trade figures published this week show how wrong that prediction was.
Back in 2008 in the lead up to the collapse of Lehman Brothers, there was much talk in the oil-rich Gulf – then enjoying an over-hyped petrodollar fuelled boom – of the region being able to decouple from the world’s travails and avoid the storm clouds of the global financial crisis.
How times have changed. As concerns about Europe’s sovereign debt crisis and the threat of a Korean conflict sent world markets tumbling, the Gulf’s bourses took their worst hammering for months.
‘Kites’ flies high – but it’s not the first, nor the last, global Bollywood hit
One of Bollywood’s newest releases, Kites, has become the first Indian film to break into the top 10 releases in the US and Canada on its opening weekend, according to Reliance BIG Pictures, its distributor.
But it isn’t the first Bollywood film to make waves Stateside. And it certainly won’t be the last.
Kremlin vs Abramovich – It’s Russian industry that suffers
Rich oligarch-owned company tries to raise price; strong-armed Kremlin proceeds to knock them down. While the story is as old as Russia’s private sector, yesterday it had a new subject: Evraz, the Russian steelmaker owned by billionaire Roman Abramovich.
At first glance it appeared that the Kremlin might be singling out Evraz in reponse to the fatal explosions at its Raspadaskaya mine two weeks ago. Or that the company was just a sacrificial lamb in a broader move against the mining industry. Today, however, it seems the decision has less to do with the mining sector than Russia’s other industries, which aren’t enjoying as buoyant a recovery
Romania: stocks fall 9% as global storms hit vulnerable outpost
The global flight for safety can strike the vulnerable with no warning as Romania seems to have learnt to its cost today. At 1225 BST stocks in Bucharest are down over 9 per cent, compared to 4.6 per cent in Russia , 4.3 per cent in Spain, and 3.4 per cent in Greece – the next three worst-performing bourses.
It was not that the Romanian markets suffered any exceptional shock today: there was no new news in Bucharest. But the combination of global turmoil and intense concern about the Romanian government’s ability to manage its troubled economy was enough to frighten investors. This bodes ill for other vulnerable economies in central and eastern Europe – and beyond.
Indonesia receives €200mn grant to address ‘huge’ educational disparity
When making your first visit to a country such as Indonesia, it’s a nice idea to bring a gift. And Andris Piebalgs, the European Union commissioner for development, didn’t disappoint. Piebalgs, from Latvia, handed over a €200mn grant to Indonesia’s Ministry of Education on Tuesday to help the country meet its education-related UN Millennium Development Goals. And frankly speaking, with some of its human development indicators on par with sub-Saharan Africa, the country needs assistance if it wants to stand alongside China and India as an Asian economic tiger.
New York headlines
*Eurozone fears spark Asian sell-off
*Pru shares fall on debut in HK and Singapore
*US judge freezes Argentina assets
*S Korea won hit by escalating tension
*India considering 100% FDI in retail
*Ships collision spills tons of oil off Singapore coast
*Another Foxconn employee falls to death
*Hu pledges currency reform without deadline
*Microsoft says China piracy makes India a better bet
*Thailand charges Thaksin with terrorism
*Shanghai to start property tax trial
*Honda to double production capacity in China
Etihad banks on droves of Chinese shoppers; boosts its presence in China
China’s growing interest in the Middle East and North Africa has drawn Abu Dhabi-based Etihad Airlines to Beijing, where it is hoping to gain approval for new flights that will carry wealthy Chinese tourists to the United Arab Emirates and beyond.
Etihad’s CEO James Hogan told beyondbrics he is bullish about China’s leisure market so much so that while at present, Etihad operates five passenger flights a week from Beijing to Abu Dhabi, the company is hoping “to go daily and eventually double daily.”
Asia markets wrap: Eurozone fears spark regional sell-off, foreigners cut exposure
Asian markets saw heavy selling across the region today, with not a single market in positive territory, as tensions in Korea and continued concerns over the eurozone sparked risk aversion. The FTSE Asia-Pacific index fell to its lowest level in almost a year.
In Korea, the Kospi fell 2.8 per cent, while the won sank 3.7 per cent after a report that North Korea was ordered to be ‘combat-ready‘ in a broadcast by Kim Jung-Il last week.
The Hang Seng index was the biggest faller in the region – losing 3.5 per cent.
Wallenberg: Doing business in China hasn’t got harder
Jacob Wallenberg’s family controls a huge chunk of the Swedish economy and is one of the oldest foreign investors in post-Cultural Revolution China. So when he intimates that doing business in China is not substantially harder than it ever was, it may be time to take the complaints of the American and EU Chambers of Commerce in Beijing with a pinch of salt.
Seoul shares, won dive on increased Korean tensions
Investors in South Korea shunned risk today – selling equities and the won, and moving money into bonds – after a website run by North Korean exiles reported that Kim Jong-Il ordered the country to be “combat-ready” in a broadcast to the hermit nation last week.
The Kospi index of stocks fell by 2.8 per cent, having been down as much as 4.5 per cent during the session. Defence-related shares performed well, with Speco and Victek both gaining over 10 per cent, according to Bloomberg.
The Korean won fell heavily on the reports – losing 3.7 per cent against the yen – a 10-month low. South Korea’s central bank and government will meet tomorrow to discuss ways of calming financial markets, reports Reuters.
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