Brazil to the rescue? Not necessarily
“The UK will grow through [foreign] investment and trade . . . The centre of gravity of the world economy is moving, and Brazil is at the heart of that.”
So said Vince Cable, UK secretary of state for business, visiting Brazil this week at the head of a delegation representing 25 big UK companies.
The UK is not alone among developed economies in hoping Brazil will help replace some of the opportunities lost in its traditional markets. Continue reading »
Americas markets wrap: Manufacturing growth spurs risk rally
Latin American markets got a boost today from upbeat manufacturing data from China and the US. Stock indices in Brazil and Mexico surged more than 2 per cent as investors piled into riskier assets.
The wave of optimism also lifted currencies, including Mexico’s peso, which is up more than 1 per cent against the dollar. The currency “benefitted from the better than expected US ISM and the risk-on environment”, wrote Marc Chandler, head of currency strategy at Brown Brothers Harriman. “Although Mexican . . . equities have outperformed the US this year, today it is the US that outperforms.” Continue reading »
The received wisdom in countries like Argentina, with years of painful experience of surviving inflation, is that when prices start to gallop, you invest in bricks and mortar. Or a car. Or consumer durables. Or now, perhaps, art.
On Thursday, the city bank of Buenos Aires, Banco Ciudad, which prides itself on being the country’s top bank in the auctions business, holds its third “super special” auction of the year – and is already bracing itself for a packed auditorium and telephone lines buzzing with bids, amid what it says is a “sustained growth in public interest in investing in art”. Continue reading »
Ghana: downgrade raises eyebrows
Standard and Poor’s has created a stir by downgrading Ghana’s credit rating, only months before the country becomes a significant oil producer.
The timing of the downgrade looks odd – and has attracted scepticism from the IMF as well as seasoned analysts of Ghana’s economy. Ghanaian commentators have even suggested S&P may have got its figures in a mix. Continue reading »
EM currencies: not so safe after all?
Bulls are currently rampant among the equity and bond investors who roam emerging markets, but there are a few noisy bears in the undergrowth – and one of them has just emerged to attack the idea that EM currencies are a safe haven.
In a short report, Bhanu Baweja, a strategist at UBS, scoffs at the idea that emerging markets have “decoupled” decisively from developed markets. If the global economy sours badly, he says, expect people who are long some emerging currencies to suffer too. Continue reading »
CEE markets wrap: PMI data lifts stocks and currencies
Central and eastern European stocks rose on Wednesday, after manufacturing data showed that the region’s economies were expanding, albeit unevenly. Poland and Czech Republic were the best performers in the August purchasing managers indices (PMIs), while Turkey and Hungary lagged.
The Hungarian forint led gains in CEE currencies, but the central bank said that it was “not at all unlikely” the country would need IMF financing. Continue reading »
Russian officals: hard at work, tweeting
Fitting a message into 140 characters could not be more alien to the political culture of the Kremlin, the institution which perfected the art of the four hour speech.
But Monday, when over 200 grandees crammed into the Georgevsky hall of the Kremlin to hear several long winded reports on higher education by the state commission on modernisation, (most of whose members seemed to be well past 60 years old) it was the humble Twitter messages which stole the show. Continue reading »
Deal of the day: Thailand’s SCB sells bank, at knock-down price
By Debbi Sutuntivorakoon of mergermarket
“In the financial industry, no one really sells below book value.”
That’s the verdict of Sunanta Vasapinyokul, an analyst at Finansa Syrus Securities in Bangkok. Yet Siam Commercial Bank (SCB), Thailand’s fourth-largest lender, is selling its stake in finance company Siam Industrial Credit (SICCO) for 38 per cent below book value.
Is the buyer – Thai Credit Retail Bank – getting a bargain? Continue reading »
Egypt’s power cuts: sweating through Ramadan
Egyptians got a rude shock this Ramadan season with the return of power cuts – something inhabitants of most parts of the country thought they had put behind them many years ago.
Ramadan this year has come amidst an unusually prolonged heat wave, with temperatures and humidity higher than average. Egyptians performing the fast have found themselves doing so in sweltering heat as air conditioners stopped because of the power shortages. The cuts have also revived a debate about Egypt’s natural gas exports. Continue reading »
New York headlines
* China’s bank regulator to curb speculative property investment
* Emerging economies find own way of using web
* Buyers step up for AIG Taiwan unit
* Putin intervenes in Norilsk battle
* Economists question India’s 8.8 per cent Q1 GDP growth number Continue reading »
Asia markets wrap: China and India data lifts stocks; Thailand at 14-yr high
Manufacturing surveys in China and India suggested that both country’s recoveries are slowing, but at a moderate rate.
The survey results lifted most Asian indices. Thai equities hit their highest level since 1996, as political risk subsides and economic growth remains strong, while the Thai baht has now gained 6 per cent against the dollar this year. Continue reading »
Further reading: Sino-Thai high speed rail, Brazil’s merger madness
From the FT,
From elsewhere,
Saudi Arabia and China: more than a hint of steel
Saudi Arabia only established diplomatic ties with China in 20 years ago but, now according to SABB bank, there are more than 70 Chinese companies operating in the Middle East’s largest economy. Among them are 62 construction groups employing close to 16,000 people.
Projects captured by Chinese contractors include an expansion of King Khalid University, the Mecca-Medina high-speed rail link, and a scheme to build 200 schools in the kingdom. But, according to Silk Road Economy, a blog, commercial relations between the two heavyweights may be about to get trickier. Continue reading »
Ads in Brazil: foreigners move in
Anticipation over a World Cup or an Olympics would draw attention to the advertising sector in most countries – and Brazil is preparing to host both. Combine that with its reputation for creativity, the growth of its consumer classes, and the internationalisation of its brands, and it looks even more appealing.
Last week’s news that Publicis was preparing to take a stake in local agency Talent that valued it at R$350m ($199m) is the most recent evidence of foreign companies’ scramble to get into Brazil, often at high prices. In the past year, there have been other moves. Continue reading »
Numbers game: the digital revolution
For anyone who needed a number to convince them of the growth potential in emerging markets telecom sector, consider this: Bric countries and Indonesia together will have 1.2bn internet users by the year 2015. And this figure is low, when one considers the internet penetration as a percentage of the population in these countries will still be less than 50 per cent.
As a study released today by Boston Consulting Group reveals, emerging markets are on the brink of a digital revolution, and it’s going to be bigger than anything the developed world has seen. Continue reading »
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