Americas market wrap
Latin American markets edged higher after fluctuating in and out of the positive territory on Monday. Earlier, investors were cautious on the outlook for a global recovery in spite of data showing strong US home sales in June, but were able to follow the US stocks higher. Continue reading »
India: another rate rise looms
The Reserve Bank of India has promised “baby steps” as it unwinds the ultra-loose policy stance adopted to ward off the global financial crisis.
The Bank has taken a few such steps already this year. At Tuesday’s monetary policy review, it is likely to take another – confirming its status as one of the most aggressive tighteners among G20 countries.
Strong growth and stubborn inflation make another dose of monetary tightening all but inevitable. It will be the second rate rise in a month. Continue reading »
Colombia: growth is up, but still modest
Colombia’s economy has not lacked plaudits of late. So the central bank’s announcement on Friday that it had bullishly revised its growth forecast for 2010 – from 3.0 per cent to 4.5 per cent – appeared true to form.
Indeed, the updated estimate even put recent bickering with Venezuela into perspective: according to Colombia’s finance minister, the dispute is costing Colombia 0.5 per cent of GDP each year, which appears almost affordable.
Yet, in fact, the good news was sorely needed. Continue reading »
Has Brazil relaxed its monetary policy too fast and too soon?
Brazil’s latest weekly survey of market economists, dated 23 July but published today, reveals some contradictory evidence from the central bank.
The survey shows expected consumer price inflation for the coming 12 months falling to 4.93 per cent from 4.96 per cent last week. The expectation for this calendar year falls to 5.35 per cent from 5.42 per cent.
But any impression that inflation is coming under control may be mistaken. Continue reading »
Why Venezuela won’t stop selling oil to the US
If Hugo Chávez’s tub-thumping speeches were taken at their word, right now US officials would be scrambling to find an alternative oil supply, and Venezuelans would be furiously building bunkers in their basements in preparation for an invasion from across the Colombian border.
“If there was any armed aggression against Venezuela from Colombian territory or from anywhere else, promoted by the Yankee empire, we would suspend oil shipments to the United States, even if we had to eat stones here,” boomed Chávez at a rally on Sunday, to cries of support.
“We would not send a drop more to US refineries,” he continued. Continue reading »
Is Russia serious about privatisation this time?
Since Russia’s First Deputy Prime Minister Igor Shuvalov announced last September that the state planned to plug its deficit by selling assets, potential investors have been buzzing about a so-called “second wave of privatisation”.
Nobody expects round two to be as controversial as round one, but there has still been great debate about what sort of juicy assets the state would be selling and at what price.
While most of the questions have yet to be answered, the finance ministry put some of them to rest today with its first proposal on the three-year privatisation scheme. Continue reading »
CEE markets wrap: banks buoy equities
With Polish and Hungarian banks passing the EU’s stress tests, central and eastern European markets breathed easier on Monday. Equities rallied across the board, although currencies faded slightly after a strong start.
Poland’s WIG20 increased 1.4 per cent to 2,494.95, led by a 3.2 per cent rise for PKO, the country’s largest bank by assets.
In Hungary, the Budapest stock exchange, troubled by an ongoing IMF controversy, rose 1.2 per cent. OTP – a bank which had the second-highest tier one capital ratio in the EU stress tests – overperformed with a 3 per cent increase, a partial recovery after news of a bank levy had recently hit shares. Continue reading »
Accessing China’s wallet, from home
In emerging markets, things get made. China has long enjoyed (or endured) the moniker ‘workshop of the world’. But perhaps China will soon be better known as the wallet of the world, if Morgan Stanley’s latest projections on global spending power are anything to go by. Continue reading »
Good news for businessmen in the United Arab Emirates: your BlackBerrys are a little closer to safety.
On Sunday the country’s telecoms regulator warned that the smartphones currently operate “beyond the jurisdiction of national legislation”. Today it rowed back, claiming to have no plans to introduce a ban.
In an interview with Al Arabiyah, a Dubai-based news channel, an official at the Telecommunications Regulatory Authority (TRA) said that the UAE is “studying all options to regulate the services…but we don’t have plans to stop them.” Continue reading »
Chinese banks: a real stress test
Another worrying sign of stress has emerged in the Chinese banking sector, with an admission from senior officials that around a fifth of the Rmb7,700bn lent to local government investment vehicles (LGIVs) could be at risk of default.
While Beijing insists that all of this Rmb1,550bn or so will not necessarily go bad, the figure is the equivalent of more than three times the total stock of non-performing loans at the end of June. That is more than enough to bring Chinese bankers many sleepless nights. Continue reading »
Deal of the day: Russia’s FESCO sells NCC; where to now?
By Thomas Williams of mergermarket
A 240 per cent return is not easily scorned – especially when it also ends a fractious relationship. Nonetheless, Russian port group FESCO’s sale of its stake in National Container Company (NCC) raises questions about where its transport business might look now.
FESCO paid $375m for half of NCC, Russia’s largest container-terminal operator, in 2007, and has now received $900m for that share. The buyer is unconfirmed, yet appears to be linked to First Quantum, a Russian oil trader which owns the other half of NCC and which had struggled to get FESCO’s backing for key projects. Continue reading »
Platinum production: caution prevails, for now
By Simon Mundy in Johannesburg
The euphoria is wearing off for South Africa’s platinum industry.
That’s the background to two recent developments: today’s solid results from Anglo Platinum, the world’s largest producer of the metal, and a possible takeover bid by Xstrata.
Platinum prices recovered strongly in the first half of this year, peaking at $1756.25/oz in April as confidence returned to the automotive industry (platinum is used in catalytic converters). But they’ve now fallen back to trade below $1550/oz, and Commerzbank said this month that the decline was likely to continue, suggesting a possible repeat of the 2008 plunge to $1306.84/oz. Continue reading »
Aquino’s faith in private capital will be tested
I
t was not one of the well-applauded parts of Philippine president Benigno Aquino III’s first state of the nation address on Monday. But a few lines about a $100m government property deal gave investors the clearest indication of how the 50-year old leader pland to address the country’s mounting infrastructure needs.
In a word, his solution is more privatization, though he prefers to call it public-private partnership. It’s hardly a new concept in the Philippines. Nor is it one that always delivered. Continue reading »
The arrival of an International Monetary Fund mission in Romania on Monday, barely a week after its officials left neighbouring Hungary in a huff, is not without a certain irony.
Hungary, you’ll recall, was long the Washington-based lender‘s darling, owing to an ardour for austerity that began way back in 2006. But preferring the role of pugilist to that of poodle, Viktor Orban, Hungary’s new prime minister, told the IMF last week that it could keep its policy prescriptions. Or to put it another way: having got out, the IMF should stay out. Continue reading »
India: private equity, laptops and ink
As incomes grow in emerging markets, consumers will be increasingly ready to pay for mass-market services. The challenge lies in offering clients what they want at prices they can afford, even when incomes are far below developed-world levels.
One Indian company that has found a niche is Re-Feel Cartridge Engineering, a national chain of 109 shops that refill customers’ printer ink cartridges. In just three years, Re-Feel has taken the market by storm, grabbing business from independent corner stores. Now it has secured private equity from TLG Capital, a UK-based private equity group, investing in emerging markets. Continue reading »
| About this blog | Headlines email | Blog guide |
| Regulars | Series | Archive |
Older entries
Stefan Wagstyl
Josh Noble
Rob Minto
Pan Kwan Yuk
Jonathan Wheatley
Heba Saleh