Positive news from Vale, the Brazilian miner, helped the country’s Bovespa index gain for the tenth day in a row on Friday. Continue reading »
Can Vale handle short term price adjustments?
Vale, Brazil’s mining giant, turned in an impressive performance in the second quarter, rebounding from a steep fall in sales last year caused by the global crisis.
It was helped by a doubling of iron ore prices during the quarter as Vale, Rio Tinto and BHP Billiton ditched the old annual contract system and replaced it with quarterly adjustments based on the spot price for iron ore in China. Prices rose by 90-100 per cent in the second quarter and are expected to rise by 30-35 per cent in the third.
But is Vale already preparing to replace the quarterly system with more frequent adjustments? Continue reading »
Ukraine: remittances home are no small deal
The few hundred dollars Ukrainian migrant workers send from Russia and Europe back home each month add up when multiplied by the more than a million migrant workers. After a dip in the flow of remittances in 2009, caused by the global recession, the World Bank projects a modest 2-3 per cent rebound in 2010.
The $5bn in remittances that Ukrainian migrant workers send home every year is not something to sneeze at, not least when one contemplates the massive cuts Kiev has had to take in recent months to secure a $15bn aid package from the IMF. Continue reading »
CEE markets wrap: equities slump on risk aversion
There were falls across central and eastern European stock markets on Friday, as poor US GDP data satiated investors’ appetite for riskier assets. Russia’s Micex index, previously buoyed by the government’s pledge to privatise state-owned entreprises, saw its biggest loss in four weeks. The index fell 1.5 per cent to 1,397.12, with banks losing over 2 per cent.
Banks also led the losses on Turkey’s formidable ISE 100, which closed below 60,000 for the first time since Monday, down 1.4 per cent to 59,866.75. Garanti bank, the country’s biggest listed lender by market value, was down nearly 5 per cent. Continue reading »
Deal of the day: Vale looks to become a copper giant
By Paulina Lichwa of mergermarket
Brazil’s Vale, the world’s biggest producer of iron ore, has been criticised as a one-trick pony – having failed to jump on other base metals. Now the company is pledging to become a major player in copper, with the purchase of Paranapanema, a Brazilian copper miner, for $1.14bn.
With a rally in the price of copper, Vale may now look further afield as it diversifies its assets. Continue reading »
Forex mortgages: that way be dragons, says Poland
After a crisis has passed, it’s easy to forget what all the fuss was about.
Poland’s banking regulator is keen to remind its banks that risky lending is still, well, risky.
It’s mulling a new rule that would limit the amount of foreign currency mortgage loans a bank has on its books to 50 per cent, something that would clip the wings of the country’s more aggressive banks, which are edging back into forex lending after last year’s scare. Continue reading »
New York headlines
* Li Ka-shing buys EDF arm for £5.8bn
* Property bubbles still a risk for China, says S&P official
* Charles River withdraws $1.6bn offer for WuXi
* Samsung warns of sagging profits
* Polish deficit reduction plan seen delayed by 1 year Continue reading »
Asian equities slipped slightly on Friday, with a lack of liquidity squeezing Chinese bank and caution prevailing before the announcement of US GDP figures later today.
However, despite the losses, July has been a positive month for the region – the Hang Seng seeing its best performance in ten months, and the Taiex its best in four months. Analysts predicted August will see further gains, on the back of tech earnings in the region. Continue reading »
Shareholders (and markets) scupper Charles River’s China deal
It would have been the biggest ever western takeover of a mainland Chinese company. But Charles River’s $1.6bn deal for WuXi PharmaTech is off.
The shareholders, and the market, will almost certainly breathe a sigh of relief. Continue reading »
India courts Turkey’s ‘suited and booted’
By Girija Shivakumar in New Delhi
After decades of looking west to Europe and the US, and looking east to south east Asia, Indian business seems to have realised that it’s been missing a trick: Turkey.
Indian businessmen and officials now describe Turkey effusively as their “stepping stone” and natural gateway to the Middle East and North Africa, markets that India is eyeing with keen interest. Continue reading »
Korean fund eyes UK fire sale
If glum Brits need cheering up about the state of their economy, they should have a chat to Jun Kwang-woo, head of South Korea’s National Pension Service, the world’s fourth-biggest pension fund.
Mr Jun’s core message is that Britain makes sense to him (and his very fast-growing fund) in the long-run. The fund has already grabbed headlines in the UK by acquiring HSBC’s Canary Wharf headquarters for £773m and taking a stake in Gatwick airport. Continue reading »
Further reading
From the FT:
From elsewhere:
Banks push cash-for-gold on doubtful Indians
Indians used to be a bit suspicious when it came to selling or pawning gold – it was seen as a sign of a man’s inability to earn a living. So selling gold jewellery and ornaments, traditionally viewed as secure investments, would only have been done in dire financial circumstances.
In fact, so deep-set is this feeling of shame that many Indians felt humiliated when the government pledged its gold deposits abroad to borrow money during the 1991 financial crunch. But now it seems times are changing. Continue reading »
London headlines
* Cameron makes free trade appeal to India
* Property bubbles still a risk for China, says S&P official
* Charles River withdraws $1.6bn offer for WuXi
* Chinalco and Rio sign $1.35bn Guinea deal
* Poland investors say budget plan may be ‘bad news’ for markets Continue reading »
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