Latin American markets edged higher on Friday as they focused on positive earnings reports and shrugged off the EU’s bank stress test results, which showed that only 7 banks out of 91 failed the tests. Continue reading »
A solution in sight for Portugal Telecom’s Brazilian saga?
What next for Portugal Telecom? A long-running saga over Vivo, its Brazilian joint venture with Telefónica of Spain, must be close to an end. Continue reading »
For followers of Mexico’s recent economic fortunes, it won’t come as a surprise.
The United Nations Conference on Trade and Development (Unctad) has confirmed that last year the country crashed out of the top 20 global destinations for foreign direct investment. Continue reading »
Hungary: the Orban crowd likes what he says
By Chris Bryant and Kester Eddy in Budapest
Investors are in a state of baffled shock following the Hungarian prime minister’s defiance of the International Monetary Fund this week.
But for now, Viktor Orban won’t lose too much sleep about the fretting in financial markets. Just as he planned, his belligerence is going down awfully well with his supporters at home. For example, the pro-government Magyar Nemzet newspaper leads with the minister of economy’s declaration: “We have started on the road to financial independence.”
He is gambling that he has enough time to boost his political position for municipal elections in October before the markets bite back. Will he get away with it? His supporters certainly think he is on the right track. Continue reading »
CEE markets wrap: Hungary rattled again
Hungary was again the sick man of central and eastern Europe on Friday, with investor confidence sapped by the government’s reluctance to adopt austerity measures. Two rating agencies, Standard & Poor’s and Moody’s, said they might downgrade Hungary’s credit rating.
The Budapest stock exchange fell 1.5 per cent to 21,942.87, and the forint fell 1.4 per cent against the euro to 287.55, with the relative stability of previous days upset.
Yet once more, Hungary’s ill-health proved not to be contagious. “This bunch of news is Hungary specific, no doubt about it,” MKB Bank analyst Zsolt Kondrat told Reuters. Continue reading »
South Africa: interest rates cuts still possible
By Simon Mundy in Johannesburg
A wide-ranging economic report on South Africa by the OECD provoked lively debate in the country this week – but it seems to have made little impression on the Reserve Bank, judging by its decision yesterday to keep the benchmark interest rate on hold at 6.5 percent. Continue reading »
After China, Bangladesh wants higher wages
With Chinese labour costs rising fast, international clothing companies like H&M, Wal-Mart Marks & Spencer, Gap and Zara have looked to up their sourcing from other, lower cost producers like Bangladesh.
The country has the lowest labour costs in the world, with a minimum wage of just $25 per month, a fact that has helped exports to surge to around $12bn, up from just $5bn eight years ago. But much like Chinese workers of late, Bangladesh’s estimated 2m garment industry workers are becoming highly restive, and they have gained an unlikely supporter: the prime minister. Continue reading »
iPhone 4 in China: prices plummet (or do they?)
Remember reading how iPhone 4s were selling on the grey market in China for up to $2,000? Well no more! Apple’s Antennagate has seen to that apparently. Continue reading »
Argentina: where’s the beef?
By Anna Petherick in Buenos Aires
For the past four years, the ranchers who parade perfectly primped bulls at La Rural- an annual agricultural show as old as Argentina’s war of independence – have lamented how much their herds have dwindled.
Price controls imposed since 2006 have made them sell a growing percentage of female calves for meat, a trend known locally as “la liquidación de vientres” (“the sale of the wombs”), and to turn their land over to arable farming. But as this year’s show opens, the beef price is high. In fact, it’s about double what it was 12 months ago. Why? Continue reading »
Deal of the day: Korea’s LS-Nikko buys into Australia
By Mark Shapland of mergermarket.com
Controversy, what controversy? Just weeks after Australia’s planned mining tax had investors running scared, the country is receiving yet more Asian investment. Continue reading »
Indonesia: where next for equities?
Indonesia, a bright spot in this year’s gloomy global equity markets, on Friday clocked up a further 1.1 per cent gain , taking the Jakarta stock exchange index to a new record high of 3,042.
With the economy surging ahead and foreign money pouring in, many observers see stocks climbing further. But some pundits suggest that with a 18 per cent gain already this year, compared with zero for emerging market equities overall, Indonesia’s starry prospects are now in the price. Continue reading »
Thailand’s export recovery boosts 2010 GDP forecast
It looks like Thailand is set, for the moment at least, for runaway recovery. The Bank of Thailand has raised its 2010 GDP forecast by more than 2 percentage points, lifting its target from between 4.3 per cent and 5.8 per cent to between 6.5 per cent and 7.5 per cent.
The Bank, has moved ahead of most published forecasts, although to be fair, many — like HSBC and the World bank, which are both currently predicting 6.1 per cent growth with upside risks — are in the process of revising their numbers. The IMF recently raised its forecast to 7.5 per cent. But not everyone is so optimistic. Continue reading »
EPFR: emerging market equities in favour
Investors are piling into emerging market equities even as they are pulling out of stocks in the sluggish developed world. According to EPFR, equity funds saw a net outflow of $3.16bn globally in the week to July 21 but emerging market equity funds posted a $1.5bn inflow.
After favouring EM bonds earlier in the year, investors seem to be looking more favourably at EM equities, with the equity funds inflow comfortably exceeding the EM bond funds inflow of $0.96bn.
The dominant markets are in Asia, followed by Latin America. By contrast, investors are cautious about eastern Europe. Despite the solid prospects of individual countries such as Poland, there are concerns about other economies, such as Hungary, and general worries about the region’s dependence on slow-growth western Europe.
New York headlines
* Singapore’s GIC says risks of shocks may trigger world recession
* Hungary PM rejects new IMF deal, Moody’s threatens downgrade
* Volvo would welcome brake on China’s growth
* Dubai World ready to use tribunal for debt deal
* Everbright Bank to sell up to 6.1bn shares
A strong week for Asian stock markets was consolidated on Friday, with equities rising across the region thanks to strong US earnings data and relative confidence about forthcoming European stress test results.
Indonesia’s Jakarta index continued its record-breaking surge, gaining 1.1 per cent to 3,042.02. The Malaysian Bursa was up 0.7 per cent at 1,345.68, while the Hang Seng strengthened by 1.1 per cent to 20,815.33. Continue reading »
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