Turkish business: West for cachet, east for growth
Istanbul could become “the new Barcelona”, Spain’s ambassador to Turkey, Joan Clos, told a meeting last week. He was talking about urban planning, a matter where chaotic Turkish metropolises would no doubt benefit from a touch of Catalan design.
Istanbul’s companies too have in the past sought out the cachet of European brands – including the national carrier, Turkish Airlines, which signed a 3 year sponsorship deal with Barcelona football club at the start of this year.
But now, Turkish companies may increasingly feel they are better placed than counterparts in the struggling economies of southern Europe. Their banks are less shaky, their government less indebted, and their horizons are expanding as businessmen form the vanguard of Turkey’s new drive for international influence.
The European Central Bank rather blunty told the Romanian government on Monday that it must reconsider plans to cut the salaries of national bank employees.
In a legal ruling posted on its website, the ECB observed that “ no third party should be able to exercise direct or indirect influence over the national central bank.” If the savings are used to fund Romania’s budget deficit that would be akin “to monetary financing, which is clearly prohibited…” the ECB said.
Russia: audit chamber has sports minister for breakfast
Vitaly Mutko, it would seem, is a man who really likes his breakfast.
While Russia’s sports minister was already well known for leading the country to its worst ever Winter Olympics in Vancouver this year, a new audit report shows Mutko and his colleagues didn’t even have the dignity to scrimp while doing it.
According to Russia’s Audit Chamber, Mutko spent a whopping $4,500 on five breakfast vouchers a day during his 20-day, while simultaneously racking up a $32,400 bill for his hotel room, over 12 times the limit allotted for state bureaucrats-and $4,225 more than the room’s actual listed price over the period.
The numbers pale in comparison with the amounts stolen from the Russian state annually on everything from construction schemes to factory sales, but the report sheds a rare light on the management of sport – a fascinating issue in any country.
CEE markets wrap: New Polish president, IMF deals boost currencies
The election of a new pro-reform president in Poland and positive news from the International Monetary Fund pushed currencies in central and eastern Europe higher, as investors believe in recovery.
Investors are hoping that victory for pro-business Bronislaw Komorowski will make it easier for the government to push through austerity measures. “It’s the best outcome for the financial markets,” said Nigel Rendell, senior emerging-market strategist at RBC Capital in London. “A president from the same party as the government gives the best chance for passing legislation.”
Local polls point to new president, but old politics
If Sunday’s gubernatorial election results in Mexico are anything to go by, then the Institutional Revolutionary Party (PRI) are set to regain the presidency in 2 years time.
According to preliminary results, the party that held power for more than 70 years until 2000 won nine of the 12 seats up for grabs – losing two of its bastions of support but compensating with victories in two states held by the ruling National Action Party and the leftwing Democratic Revolution Party (PRD).
But what does that mean for business? After all, the outside world rejoiced in 2000 when Mexicans voted the PRI out of office. Back then, the dominant wisdom was that the party’s grip on power had held up the country’s development, while largesse and corruption had made it an arcane place to invest.
World Cup 2014: March of the white elephants
By Andrew Downie in São Paulo
While England fans are asking about goal line technology in stadiums during the next World Cup, Brazilian fans are simply asking about their stadiums.
Even with four years to go before Brazil hosts the 2014 competition, experts reckon at least six of the 12 grounds to be used for games will turn into white elephants when the tournament ends.
In New Delhi BJP and Left Party’s planned fuel hike protests foiled
Old Delhi’s historic, and normally jam-packed shopping street, Chandni Chowk, was fully equipped for today’s BJP-led protest against the Indian government’s recent fuel hike.
An overbearing stage and giant speakers had been installed in the main square, green and orange flags were placed strategically around the podium, megaphones were attached to lamp posts along the mile long market road to blast out political rhetoric, police tape cordoned off no-go areas for “officials” and a 1,500 strong police force was commissioned to attend to the masses. The turnout, by Indian standards, was pitiful.
Qatar sparkles on liquid gold
Rating upgrades may be as rare as hens’ teeth these days, but Standard & Poor’s award of a double-A long-term grade to Qatar today should come as no surprise. The country is stinking rich, even by the standards of the Gulf.
Soaring oil and gas sales will bring over $76bn into the finance ministry’s coffers this year, and expand the country’s economy by almost a fifth this year, according to the International Monetary Fund. This has propelled Qataris to the top of the table of the world’s wealthiest people, and impressed rating agencies, economists and bankers alike:
“The upgrade is based on the government’s strengthening fiscal and external balance sheets, with strong growth prospects spurred by new large liquefied natural gas (LNG) projects in 2010-2012,” said Standard & Poor’s credit analyst Luc Marchand.
South Korea: officials struggle to explain currency control plan
South Korea’s currency controls, announced last month, are a big pointer to where the country sees its future.
Are the skyscrapers of Yeouido in central Seoul really going to become a global financial hub, fully integrated with global markets? Or will they be nothing more than expensive management centres catering to the needs of local exporters? South Korean officials, running Asia’s fourth largest economy, should be answering these questions. But they are in denial.
Deciphering King Abdullah’s words on Saudi oil
There are times when deciphering the meaning of a statement or comments by an official in the Gulf can be a tricky business.
And a statement put out on the official Saudi Press Agency quoting King Abdullah was a case in point. It had the kingdom’s ruler saying he had ordered the world’s top oil producer to halt oil exploration operations to protect the country’s hydrocarbons wealth for future generations.
Deal of the day: Thailand’s Banpu makes move down under
By Paulina Lichwa of mergermarket
After two months of stake building by Thai-listed Banpu in Australian firm Centennial Coal, an offer has finally materialized. The pan-Asia coal-focused energy group has paid A$6.20 per share, valuing Centennial’s equity at A$2.5bn. The price represents a 55% premium for the Australian miner, based on the May 5 closing price.
With the process being mooted for the past two months and a significant premium over the price, rival bids are said to be unlikely. Centennial closed on 2 July at A$4.42 per share.
Asia markets wrap: calm before the storm?
Regional markets saw a respite from selling on Monday as investors started the week with significantly less risk taking. The calm is likely to be temporary, as fears about the US economy continue to plague markets in Europe and North America.
In China over the weekend, Premier Wen Jiabao pledged to keep economic policy ‘stable’ but also warned of ‘difficulties’ in maintaining strong economic growth as the global financial crisis had a worse-than-expected impact. The mainland’s key index was down again after a positive Friday session, with new share issues like Agricultural Bank of China’s initial public offering keeping liquidity low.
New York headlines
* Komorowski elected Polish president
* China car sales growth slows; services index slides to 15-month low
* Banpu buys Centennial for $1.7bn in Thailand’s biggest overseas deal
* Hong Kong home sales drop to 14-month low
* Turkish inflation slowed to 8.4%, strengthening Case for low rates
* Lenovo: Apple is losing out in China
* Chinese pay disputes mirrored across region
* Wilmar to pay A$1.75bn for CSR’s sugar business
* Market cautious over Indian rate hike
* China economic policy faces rising challenges
* Anil Ambani to merge his Reliance Power and RNRL
* Russia’s MTS in talks to boost web content
* Bharti upbeat on profiting out of Africa
* Markets mixed
New administration pledges to make the Philippines self-sufficient in rice
When Proceso Alcala, the new Philippine agriculture secretary, said last week he wanted the world’s biggest rice importer to be self-sufficient in the crop in three years, it sounded more like a wish. But when he repeated it today amid turnover rites at his office, it now seems a serious goal of the new administration of president Benigno Aquino III.
That doesn’t make it any easier to achieve. In April 2008, when world rice prices were beginning to surge, his predecessors also outlined bold plans to produce enough of the staple that over 90m Filipinos eat for breakfast, lunch and dinner by the end of 2010 so that there would be no need for imports. But then came the severe storms in late 2009 and a mild drought early this year.
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