James Lamont reports from Goa on another big move by a multinational – and one with a long history in the developing world.
Siemens, the German engineering group, is announcing a E3bn ($3.7bn) investment in India, China, Brazil and Russia to produce technology especially adapted for quick roll-out in emerging markets.
Video: Stephen Roach and Martin Wolf debate China’s yuan policy
On the last day of the China-US Strategic and Economic Dialogue the FT’s Martin Wolf and Morgan Stanley’s Stephen Roach discuss the impact of a major renminbi appreciation on the global economy. The event, filmed by Bloomberg TV, was hosted on May 25 by the National Committee on US-China Relations. President of the National Committee on US-China Relations, Stephen Orlins, moderates.
Click here to watch the full video.
Nigerians should not rejoice just yet
For the first time in at least three years, a chance to fix Nigeria’s disastrous electricity shortage is in prospect.
Whether the leaders of Africa’s most populous nation grasp the opportunity will depend primarily on whether economic sanity prevails over the patronage politics that tends to hold sway over the world’s 10th biggest oil exporter.
Czech elections characterised by uncertainty
Investors have become extremely leery of risk and uncertainty, but that is exactly what is on offer from the Czech parliamentary elections on May 28-29.
Opinion polls shows that no party commands a solid majority. The likeliest result of the vote for the 200-member lower house is that the left-leaning Social Democrats will get the largest seat total, but still fall far short of a majority. Opinion polls show them with about 30 per cent support.
No vacancy in Brasília’s hotels
Here’s an anecdote with a worrying message about Brazil’s readiness to receive floods of visitors during the 2014 World Cup and 2016 Olympics, not to mention investors beating a path to one of the world’s few growth stories.
On the FT’s most recent trip to Brasília, the capital, a couple of weeks ago, hotel rooms were very hard to come by. But we got one. Not so our video cameraman, who was there from Monday to Wednesday this week.
Central and east European equities traded in positive numbers and currencies were up against the euro for a second day as the euro surged on assurance from China that it would not diversify its currency policy. The euro had fallen close to its four-year low of $1.2142 in morning trading after a report in the FT that China’s State Administration of Foreign Exchange (Safe) was getting euro jitters and rethinking its euro bond holdings. Safe denied the report, saying it was a “responsible and long-term investor” in foreign reserves.
Shares in Poland were up and the zloty firmed on news acting president Bronislaw Komorowski announced former prime minister and current European director of the IMF, Marek Belka, had been tapped for the position of central bank governor. The Czech crown underperformed as uncertainty over the weekend’s elections, characteristically volatile, dampened sentiment.
India bucks a trend – and boosts short selling
Just as Germany is clamping down on short selling, and some other countries are thinking of following suit, India is moving in the opposite direction – and looking to boost short selling.
It is clearly a sign of the growing confidence that emerging markets regulators have in their financial sectors. But it also shows that countries which still run heavily restricted financial systems have some way to go before their markets are fully liberalised.
Lenovo moves down market to gain market
Apple may now be the world’s most valuable tech company, but Chinese consumers aren’t convinced by one of its most iconic products – the iPhone. Now Lenovo – who sold its mobile phone business in 2008 only to buy it back earlier this year – senses an opportunity.
Its earnings release today was a disappointment for analysts – profits were less than half expectations. The reason? Lenovo is going back into the phone market, and it’s taking aim at China.
China’s place as the factory of the world is at the heart of its growth story. Low cost labour, cheap exports. That’s the Chinese way.
So what happens when those exports aren’t so cheap any more?
Currency pressures abroad and labour issues at home make the question increasingly relevant. This week trade figures between Mexico and the US produced a shot across the bows.
Can Europe learn from Dubai?
Dubai World’s chairman has declared victory. At the opening of a Mars confectionary factory yesterday, Sultan bin Sulayem said Europe could learn from the emirate’s experience in restructuring its debts, estimated by the IMF to total $109bn.
“From experience, I know we should be confident that the worst is over,” he said. “Not a single bank is in danger, not a single company is going to be losing.”
But companies owed billions of dollars by Nakheel, the troubled development arm of Dubai World, may raise their eyebrows at the optimistic outlook.
Marek Belka tapped to be Poland’s new central bank governor
Faced with increasingly skittish investors worried about contagion from the Greek crisis Poland is looking for a safe pair of hands – and one of the safest are those of Marek Belka, a former prime minister and now European director of the IMF who is being proposed as the new governor of Poland’s central bank. Bronislaw Komorowski, the speaker of parliament and acting president, made the announcement this morning.
Komorowski is acting to fill the vacancy left by Slawomir Skrzypek, the central bank chief killed in the April 10 air crash that also killed Poland’s president and many other senior government officials.
The battle for Vivo: an Iberian divorce looms
An air of inevitability hangs over the increasingly rancorous row between Portugal Telecom and Spain’s Telefónica over control of Vivo, their Brazilian mobile phone joint venture.
According to an old Portuguese saying, the country should expect “neither good winds nor good marriages” from Spain. True to form, the partnership between PT and Telefónica appears to be heading towards an acrimonious divorce.
Asian currencies were firm today, with the South Korean won making the biggest gains in a year, after only a few days ago falling to a 10-month low. Stocks rallied as positive economic news came out of the Philippines where the government announced the economy has grown the fastest in 3 years, and the South Korean government forecast the biggest account surplus since November.
Sentiment in the region was boosted by a comment made by Mark Mobius yesterday that the recent decline in emerging market equities was a “correction” in a bull market, Bloomberg reported.
New York headlines
*China says EU remains key investment market
*Lenovo returns to profits, but margins fall
*Telefonica may clinch Vivo bid by raising offer
*Daimler, BYD set up Chinese venture to develop electric cars
*India’s largest bourse plans short selling to lure investors
*India blocks Chinese power groups
*South Korean navy holds border anti-sub drills
*GM’s electric car venture in doubt after Reva deal
*Apple, Dell investigating Foxconn; Another suicide reported
*Philippine economic expansion accelerates
*Piramal group to launch own drug ‘by 2012′
*Algeria says won’t allow Orascom unit sale to MTN
*Goldman Sachs offers DMA in Brazil
*Markets firm
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