Daily Archives: Sep 6, 2010

By Jane Rickards in Taipei

The policy debate over Asian currency management has been long, tortuous and often very sensitive. But that’s not deterred Taiwan’s central bank governor from joining in with a fresh call for the region to set up a formal exchange rate coordination mechanism.

By promoting stable exchange rates, Perng Fai-nan, the governor, said that such a mechanism would help avoid the economic instability caused by sudden inflows of foreign capital, which can inflate asset price bubbles and stifle the competitiveness of exporters.

Those are concerns shared by other Asian governments, but the political and economic paths to progress are fraught – not least because China is unlikely to support any venture that it cannot shape. Read more

With US markets closed for Labor Day, Monday had all the makings of a slow session on Latin markets and it lived up to its promise. Volume on the equities section of the BM&FBovespa in São Paulo, at R$2.3bn ($1.3bn) was the lowest of the year and about a third of the recent average.

Most attention in São Paulo was on Petrobras. Its non-voting shares (the most traded) gained just over 1 per cent to close at R$29.09 while its voting shares were up 1.9 per cent to R$33.34. Investors have until Friday to position themselves to take part in the company’s share issue, set to be the biggest in corporate history and scheduled for the end of September. Read more

If you’re not into long-term relationships, then India isn’t the stock market for you, the country’s boosters will tell you. In the land where marriages are meticulously arranged after months of due diligence, investing success doesn’t come by having a fling with India. You have to be in it for the long run.

There is, however, a problem: so many investors already seem to have followed this advice that the equity market is in danger of getting over-valued. Read more

Back when the northern half of Vietnam was a Soviet client state, and the southern half an American one, neither superpower would have contemplated building a nuclear power plant here.

But today Russia and America are again jockeying for influence in Vietnam, and this time they’re offering reactors. Read more

Central and eastern Europe markets edged up on Monday, in keeping with a more positive global mood. But the Czech index fell after July retail and industrial production figures disappointed, and anti-monopoly regulators announced an investigation into the country’s biggest telecoms company, Telefonica 02. Read more

By Krzysztof Rybinski

Here is the official story: Poland was the only country in the EU to survive the 2009 crisis without falling into recession; is posting further solid growth in 2010 and will see an expansion of nearly 5 per cent next year. Unlike other European states, the country has absolutely no need to embark on painful economic reforms.

Here is the story as told by those Polish economists that Donald Tusk, the Polish prime minister, has called the ‘mad people’. Read more

Domestic consumers getting you down? Exchange rates making you miserable? Like many companies in developed economies, Suzuki is facing both of these problems. But it’s found a very effective tonic: India.

Suzuki – parent company of Maruti Suzuki, India’s top automaker – announced on Monday that it is to build a fourth plant in India, capable of producing 250,000 vehicles a year. Small wonder – August was its best ever month for sales in India. Read more

Petrobras, Brazil’s energy champion, is rolling towards what would be the biggest share issue in global corporate history – it wants to raise up to R$55bn ($32bn) from minority shareholders – and the FT’s Lex column has just raised some valid questions about its relationship with the government in Brasilia.

Lex says the government “must resist the urge to try back seat driving” Petrobras, which currently operates at arms length. But Brasilia has a one-third stake in it, a majority of the voting shares, and because of its status as a tool of development, that relationship could change after Brazil’s general election on October 3.

* BA-Iberia looks at emerging market expansion

* Thai baht hits 13-year high

* India’s Reliance Communications, GTL scrap tower deal

* Deripaska follows McDonald’s into renminbi bonds

* China allows insurers to invest in private equity, real estate

 Read more

Asian markets continued their recent rises, as positive US jobs data on Friday eased fears of a global slowdown. The MSCI Emerging Markets Index rose to a four-week high, while Indonesia’s Jakarta stock exchange set a new record.

Elsewhere, the head of Taiwan’s central bank said that Asian countries should reduce the impact of currency fluctuations by establishing a “formal regional exchange-rate coordination mechanism”. Read more

China may have once have had a reputation for caution in its foreign corporate forays but it’s no longer scared of marching into difficult economic or political territory.

Any doubts on this score are dispelled by the news that the Beijing government has authorised Sinochem, the state chemicals group, to work on plans for intervening in BHP Billiton’s $39bn effort to take over Canada’s PotashCorp. Read more

When not earnestly debating Russia’s future, academics and journalists gathered for an annual government-supported conference in Russia have been pondering another question: why is President Dmitry Medvedev not meeting them this year?

Perhaps the most intriguing theory is that Vladimir Putin – while quietly plotting his return to the presidency – has ordered him not to. Read more

From the FT:

From elsewhere:

* Jubilant Energy to raise exploration cash

* Chinese ventures abroad facing a bumpy road

* Rosneft names Khudainatov chief as Putin deputy boosts control

* India’s family groups groom future leaders

* Foxconn growth to fall by half Read more

Some spectacular figures for emerging markets have jumped out of a survey on currency trading by the Bank for International Settlements. Since 2007 daily market turnover in the Indian rupee has more than doubled. Trade in the South African rand is up more than three-fold. And for the Brazilian real it’s up five-fold.

Impressive stuff. And further proof of surging interest in all things emerging markets. But wait, if you add all the emerging markets together, their share of global forex trading has actually fallen in the past three years. What’s going on? Read more