Daily Archives: Sep 7, 2010

A woman buys goods at a popular street market in CaracasHugo Chávez does not like the term credit card. It sounds too much like an instrument of capitalism. So when Venezuela’s socialist president announced the introduction of something similar recently, he decided to call it a “good life card”.

The idea of the card – which will enable users to buy staple foods from state-run stores on credit – is apparently to stimulate consumption, in an attempt to boost the economy of the only country in Latin America still in recession. But not any old consumption – no, “good and necessary” consumption offering a “path to happiness”, said Chávez , not unbridled “consumerism”. Read more

Mexican peso against US dollarLatin American markets fell on Tuesday as renewed fears over eurozone banks sparked a flight into havens and out of risky assets.

“It as if market participants can focus only on one of the key drivers of financial markets at a time”, wrote currency analysts at Brown Brothers Harriman. Read more

Related reading:
Why Africa won’t be the next Bric, beyondbrics

A million employees of India’s state-owned banks joined a nationwide strike today, protesting against job insecurity and government plans to open up the banking sector to private players.

The paradox is that India’s banks are looking to employ more people – so long as they have the right skills. Just at the time of the strike, bank executives were meeting in Mumbai’s luxury Trident hotel, discussing… how to create jobs. Read more

Central and east European stocks and currencies lost some of their recent gains on Tuesday, as poor German data accentuated a fall in global investor confidence. Germany manufacturing orders unexpectedly fell 2.2 per cent in July, compared to June. Read more

Last week I went to South Korea, to give the opening keynote speech at a conference organised by the government of the Republic of Korea on “Financial Reform: An Emerging Market Perspective“. This conference was part of the preparation by the South Korean government for the summit of the Group of 20 leading countries, which will take place in Korea in November. An objective of the South Korean government is to focus attention on the perspective of emerging economies on the crisis. Read more

Industrial and Commercial Bank of China’s small Hong Kong investment banking unit has been selected as one of the bookrunners for a planned R$55bn ($32bn) share sale by Brazilian state-run oil giant Petrobras – and that is not something to be treated lightly.

It marks the “first time a Chinese investment bank is taking a key role in a major share issue outside the mainland China and Hong Kong market,” according to ICBC, the world’s most valuable and profitable bank. Read more

While some emerging markets compete to be the next Bric, Mexico appears left behind. Once thought too developed for Bric status, it now struggles to compete with other emerging economies, held back by a lack of reform and a violent image.

But Mexico is now entering a select club where even the Brics cannot tread. In October, it will become the first Latin American country to join Citigroup’s World Government Bond Index. Acronyms may bring more kudos, but Mexico’s inclusion on the Index has helped foreign investment in peso bonds to reach $10bn over the last eleven months, according to bank estimates. Read more

Action and reaction? After an increasingly vocal stream of complaints from foreigners about the business environment in China, the country’s vice-president has reassured overseas companies that it will treat them fairly.

Xi Jinping, the vice-president (pictured), said China was committed to becoming the world’s most attractive destination for foreign investment – a message that, if believed, should be a source of relief to many frustrated denizens of the world’s executive suites. Read more

By Anjali Naik and Paul Francis-Grey of mergermarket

India, a country not renowned for reliable electricity distribution, will soon have the world’s largest pylon producer. KEC International, the star of the country’s RPG conglomerate, has agreed to buy SAE Towers of the US for $95m.

“Yes, we have been strong players in the developing markets; this gives us an access to the developed markets,” said KEC’s chairman, Harsh Goenka. “The USA market looks very interesting because the infrastructure is ageing.” Read more

If receiving foreign direct investment were an Olympic discipline, the US’s days on the podium would be numbered. By 2012, India and Brazil will have leapfrogged the US as FDI destinations, according to a survey of global businesses published late on Monday.

Indeed, the World Investment Prospects Survey 2010-2012 – from the UN Commission on Trade and Development – is a vindication of Goldman Sachs’ Bric paradigm: all four emerging giants are in the top five FDI destinations, as measured not in dollar terms but in their popularity with companies [corrected*]. But the newer concept of CIVETS receives less support. Read more

China has set ambitious targets to reduce its energy use, but for a while it was not clear whether the dictates from Beijing would be implemented. Now, however, that is happening in the steel industry, and with dramatic consequences.

In Hebei province, China’s steel making hub close to the capital, several factories have been told to curb their output in order to save energy. That has sent domestic steel prices soaring, and the shares of steel makers elsewhere in Asia are up too. Read more

* China vows to treat foreign business fairly

* Jordanian websites shift political dissent online

* New energy cars key to China’s future

* Suzlon turns to emerging markets growth

* Etisalat may consider Idea Cellular for India mobile expansion Read more

Indonesian and Philippine indices hit new record highs on Tuesday, bucking falls elsewhere, and India’s Sensex also rose to a new 31-month peak. China’s move to reduce steel output boosted producers in other Asian countries, while Taiwan’s August exports were slightly higher than expected. Read more

When Turkish traders knock off on Wednesday for the holiday at the end of Ramadan, some will have a nervous wait until markets reopen on Monday.

During the break, Turkey will vote in a referendum on constitutional change widely seen as a test of confidence in the government – and a dry run for next year’s national elections. Read more

From the FT:

From elsewhere:

Russia’s stock market has had a lacklustre summer. Yet the country’s bond market has rallied – making up ground lost in the spring, when prices plunged on fears of defaults in Greece and elsewhere. While peripheral eurozone bond markets remain troubled, Russia’s has surged ahead – and it’s thanks to risk-averse banks. Read more

* Ballots and bullets in Nigeria’s oil state

* Jordanian websites shift political dissent online

* New energy cars key to China’s future

* Suzlon turns to emerging markets growth

* Etisalat may consider Idea Cellular for India mobile expansion Read more

Speaking to the FT’s James Blitz at the Ambrosetti conference in Italy, Cheng Siwei, former vice chairman of the standing committee of the National’s People’s Congress of China and chairman of the influential Chinese thinktank the International Finance Forum, says that China’s major cities are experiencing a property bubble, and that the current economic growth rates are unsustainable.

History has a funny way of repeating itself at India’s family-run companies. Ratan Tata, the head of Tata Sons, India’s largest conglomerate, is preparing to step down in two years at the ripe old age of 75 years.

One of the favourites to succeed him is his half-brother Noel, as the FT explained on Monday. If chosen, he could boast as obscure a path to the throne as Ratan’s own. Read more