Daily Archives: Sep 9, 2010

potashWho would have imagined fertiliser could be a hot, exciting issue? Well, it is now, at least in Brazil.

On Wednesday, Vale issued $1.75bn in bonds, saying the money would go towards general corporate expenses. But it got the rumour mills spinning that the Brazilian mining giant was looking to fund expansions in the fertiliser sector, perhaps with an eye to acquiring PotashCorp, despite strong denials from the companyRead more

Mexican peso against US dollarBetter-than-expected US jobs data lifted investor sentiment today, lifting Latin American stocks and currencies. Mexico’s peso gained 0.5 per cent and Brazil’s real was 0.1 per cent stronger against the dollar.

“The best part of the Mexican economic recovery may be behind us for now, yet we see the pessimism fueled by the weak US data somewhat overblown”, wrote Flavia Cattan-Naslausky, and Siobhan Morden of RBS. “One thing that has not changed is that [peso] remains cheap and Mexico remains even more competitive on a relative basis (think manufacturing).” Read more

Traffic jam in Mexico CityMexico’s Congress today begins the usually arduous and drawn-out process of studying the government’s 2011 budget proposal, which was submitted late Wednesday.

To judge by its contents, the proposal is boring to say the least. So are its assumptions: growth next year of 3.8 per cent, inflation of 3 per cent and a fiscal deficit of 0.3 per cent of gross domestic product, rising to 2.3 per cent if spending by Pemex, the state oil monopoly, is included.

Nothing particularly controversial or surprising there. But the most interesting and polemical thing about this proposal is what the government did not include: a tax reform. Read more

Vale, Brazil’s iron-ore giant, is looking to diversify. It wants to invest over $4.3bn on a giant potassium mine in Argentina, providing fertiliser for Brazilian agriculture.

But when it comes to foreign investment, Argentina has a peerless ability to shoot itself in the foot. Following a typically creative Greenpeace campaign, the country’s congress may ban mining near glaciers – scuppering Vale’s potassium ambitions. Read more

Higher oil prices, on the back of renewed global confidence, helped Russia’s Micex index to a four-month high on Thursday.

Hungary took advantage of the upturn in sentiment to sell twice as much debt as planned, although yields rose. The forint recouped some of its losses against the dollar and the Swiss franc. Read more

Before the financial crisis, equity share sales were the biggest craze in the Gulf since the discovery of oil, with governments forcing companies to shower citizens with cut-price stocks.

The IPO wave crashed when markets plummeted and banks stopped financing share purchases. But now there are signs of recovery with bankers hoping a smattering of share sales in Saudi Arabia and Oman this year could signal that the IPO market is re-emerging from the financial wreckage. Read more

By Virginia Garcia Martinez of mergermarket

Dragon Next has become one of China’s favourite online games of 2010: when it was released for testing in July, hundreds of thousands of people played it simultaneously.

Now the company that developed Dragon Next – South Korea’s Eyedentity – has been acquired by China’s second-biggest online gaming publisher, Shanda Games, for $95m. Read more

India has been a tough investment for Vodafone by any measure. A decision by the High Court in Mumbai on Wednesday ordering it to pay about $2bn in capital gains tax on an M&A transaction that occurred three years ago only underlines the terrible time the world’s biggest international mobile phone operator has had in the world’s fastest growing large mobile phone market.

But the case has much broader implications too: Vodafone has been treated shabbily by the authorities in many ways and that’s likely to tarnish the country’s reputation as a destination for foreign investment. Read more

It doesn’t take much to irritate a Chinese internet titan. Alibaba Group, the country’s largest e-commerce company, had already fallen out with its biggest shareholder, Yahoo, over a Google-government hacking dispute. (Yahoo backed Google, Alibaba said be quiet.)

Now Alibaba has reacted angrily to a report that Yahoo’s Hong Kong site might compete with its own Alibaba.com for advertisers. Read more

It is not the hair-pin bends on South Korea’s first Formula One Grand Prix track that are causing the feverish brows, sweaty palms and hearts in mouths. It is the teams of construction workers still laying kerbs and asphalt six weeks before Korea’s first race as an F1 host in October.

Unusually for a country that prides itself on its building skills and is home to some of the world’s top construction companies, Korea has found itself in a rather mystifying race against the clock to get its grand prix track finished. If it is not ready and approved by September 21, it could bring commercial disaster and political embarrassment.

 Read more

The publication of the draft prospectus for an initial public offering is rightly regarded as an important moment in the process. It tells investors that the sale really is going ahead. But sometimes it doesn’t tell them much more than that.

The draft prospectus for the IPO of Malaysia’s newly formed Petronas Chemicals Group is a case in point: large parts of the document filed with the Securities Commission of Malaysia consist of rows of black dots and notes on contingent uncertainties. Read more

*KNOC refuses to raise Dana bid

*Japan worried by China’s bond purchases

*India to host F1 Grand Prix in 2011

*Bank of Korea leaves rates unchanged

*China surplus may exceed $20bn Read more

The Philippines stock exchange again led Asian markets on Wednesday – taking its September gains to nearly 10 per cent in response to better-than-expected export data for July. A JP Morgan report said the market could rise further, as investors judge that the country has become a less risky investment destination. Read more

It was brave of the boss and main owner of Severstal, Russia’s biggest steel maker, to admit to the FT that the much vaunted globalisation strategy he put in place has come close to unravelling.

Alexei Mordashov’s original attempt was modelled on Lakshmi Mittal, the billionaire Indian steel magnate, but now the Russian says he needs to go back to the drawing board. Other emerging markets steel executives have tried to emulate Mittal’s approach in some way – so they should sit up and take note. Read more

As Asia’s major economies bound forward and their hunger for energy surges over the next decade, Indonesia is strategically positioned to take advantage as the world’s largest exporter of coal. It is also neatly placed geographically, on the doorsteps (well, almost) of China and India.

Rudi Vann, a leading coal analyst at Wood Mackenzie, told beyondbrics he expects Indonesian coal production to rise nearly 90 percent to 480m tonnes by 2020. By striking deals to sell it in exchange for infrastructure financing, Indonesia is using the resource to fix its own crumbling roads, ports, bridges – and its power plants too. Read more

From the FT:

From elsewhere:

*India to host F1 Grand Prix in 2011

*Bank of Korea leaves rates unchanged

*Vodafone loses landmark India tax case

*China surplus may exceed $20bn

*Korea Oil’s hostile Dana bid marks new aggression Read more

Here’s a new measure of how bright business sentiment is in emerging markets: employers’ appetite for staff. Companies in China, Taiwan and India lead the world in their desire to expand their workforces, according to a new survey from Manpower.

It shows that while employers across the US and Europe remain reluctant to hire as they fear another economic slump, Asia is recruiting enthusiastically, and Latin American countries are not far behind. Read more