Daily Archives: Sep 27, 2010

Mexico CityDisappointing news for Mexico came Monday when the government’s statistics agency reported that the economy grew 5.1 per cent over the 12 months to July, below the 6.8 per cent registered in the 12 months
to June.

The latest data supports the idea held by some economists that Mexico’s economic recovery may be softening. The finance ministry has predicted growth this year of 4.5 per cent, and of 3.8 per cent next year. Read more

Brazil's BovespaBrazilian stocks got a boost as deal-making lifted global sentiment, the US reported buoyant business spending and Chinese industrial companies profits surged 55 per cent in the first eight months of the year. But Mexico’s IPC closed lower after the statistics agency reported slowing economic growth. Read more

Brazilian Finance Minister Guido MantegaBrazilian finance minister Guido Mantega stepped up his rhetoric today, describing an “international currency war” among nations that “threatens us because it takes away our competitiveness.”

But Mantega’s war of words, aimed at cooling off the rising real, also included a warning that the government may raise the tax on capital inflows. (Brazil introduced its 2 per cent tax on portfolio investments last October, partly to cool off inflows after Santander’s Brazilian arm’s $8bn IPO attracted a lot of interest.) So just how effective is that threat? Read more

Here’s another sector to add to the growing list of opportunities in emerging markets: insurance. With an eye to the expanding market for agricultural and infrastructure insurance in Brazil, Swiss Re is taking a controlling stake in UBF Seguros, a São Paulo-based insurer, which it will use as a platform for further expansion in the country.

Involved with UBF since its founding in 1997, Swiss Re is partnering with the International Finance Corporation, part of the World Bank, to capitalise the company to the tune of $40m. The company focuses on infrastructure and agriculture. Read more

Russian stocks were the worst performers in central and eastern Europe on Monday, after Lukoil, the country’s second-largest oil producer, bought back shares from ConocoPhillips. Other indices were mixed, with Turkish stocks gaining.

As expected, the Hungarian central bank held interest rates for a fifth successive month; in response, the forint extended its four-month high against the dollar. The Turkish lira reached a new five-month peak against the greenback, following the prime minister’s statement that the currency’s level was satisfactory. Read more

When the world was hit by a food crisis in 2007-08, one factor made it different from previous episodes: rising demand. Today that trend is as important as ever – and it frames a series of posts that beyondbrics will publish over the next two weeks exploring the production and consumption of food in emerging markets. Read more

Morgan Stanley has found a new way to tap into China’s nouveau riche. The bank’s private equity arm has bought a $42m stake in Sparkle Roll, which sells luxury brands – including Bentley, Rolls Royce and Lamborghini cars, Boucheron jewelry and Duclot wines. News of the move sent Sparkle Roll’s Hong Kong shares up 10 per cent on Monday. Read more

Tyres, currency, Google and now, chicken redux. Just when relations between China and the US seemed tense enough, China’s ministry of commerce announced last night that it would be slapping a higher tariff on American poultry.

If that induces a flash of déjà vu, that’s because earlier this year – when the US and China were at loggerheads over issues ranging from Google to the Chinese currency – Beijing announced it would levy anti-subsidy duties of up to 31.4 per cent on US chicken imports. The Middle Kingdom has just upped this number to 105.4 per cent. Read more

Cheap cars, cheap appliances, cheap sneakers – China is famous for them. But with Beijing banging on endlessly about moving the Chinese economy into high-value products, no Chinese brand worth its salt can afford to accept low margins forever.

So Chinese carmakers are making SUVs (or buying Volvo) and Chinese sneaker-makers are signing top American basketball players as sponsors. And now Haier, China’s largest appliance maker, has announced it will produce the biggest-capacity washing machine in Japan – after nearly a decade selling fridges and washers only big enough for a bedsit. Read more

For Thailand’s economic forecasters, this year’s GDP has proved a moving target.

The Ministry of Finance has just raised its GDP forecast again: the now say that the economy will grow faster than any time since 1995. Read more

What better evidence can there be of Africa’s burgeoning potential as a consumer market than Walmart’s desire for a foothold on the continent? The world’s largest retailer has made a preliminary offer of more than $4bn for the South African retailer Massmart as it seeks to expand into Africa.

Massmart is South Africa’s third largest retail group by value, and the two companies said on Monday that they were in talks over a proposed bid of R148 per share from Walmart, which would value Massmart at R28.9bn ($4.1bn). Read more

For years western banks have been enthusiastically sending their top English-speaking employees to China. Now those same banks are moving Mandarin-speakers in the opposite direction. But with other banks doing the same thing, the question is whether there are enough veteran Chinese bankers to go round. Read more

* Walmart targets S Africa’s Massmart in $4bn move

* Bright Food in talks to buy United Biscuits

* Lloyd’s insurers turned down games

* Sainsbury hopes to find niche in China

* GDF Suez marks Asian push with S Korea deal Read more

Asian stocks rose strongly on Monday, lifted by US data released late on Friday. The MSCI Asia ex Japan index added 0.5 per cent to reach a two-year high, led by Chinese and Indonesian shares; the index has gained 10 per cent this month (see graph).

Russian pipeline operator Transneft said it will struggle to double oil supply to China, as requested. Meanwhile, economist Nouriel Roubini warned that emerging economies may have to rely on domestic demand to compensate for rich countries’ sustained sluggishness. Read more

The catfish wars between the US and Vietnam have now lasted seven years, and the latest chapter is suitably strange.

Vietnamese exporters of catfish are protesting against a recent US International Trade Agency move that could force them to pay retroactive anti-dumping tariffs on fish they exported to the US in 2008-9. For some seafood companies, the new tariffs would be up to 130 per cent of the price at which they sold the fish. That means they would have been far better off burying them in a hole than selling them to American customers. Read more

From the FT:

From elsewhere:

Julius Malema, president of the influential African National Congress Youth League and the enfant terrible of South African politics, has become a wearisomely familiar name to investors in the country.

For months Mr Malema – who praises Zimbabwe’s “courageous and militant” land seizures – has been calling for the nationalisation of South Africa’s mines, forcing ministers into repeated denials that it is government policy. But at a major meeting of the ruling ANC this week, he seemed to make some headway in his crusade. Read more

* Lloyd’s insurers turned down games

* Huang calls for shareholders’ support to control Gome

* GDF Suez marks Asian push with S Korea deal

* India’s Supreme Court to hear Vodafone plea today

* TPG considers Mey Icki sale Read more

Roughly $45bn down, at least another $45bn to go.

China’s banks have been on a fund-raising binge this year. Agricultural Bank of China ($22bn), Bank of China ($6bn) and Bank of Communications ($4bn) were the biggest of seven $2bn+ deals. But that certainly won’t be the end of it. Read more

It’s a good time to be Thailand. The economy is bouncing back nicely, markets are booming – and loans are flowing in.

The Asian Development Bank has signed a deal to lend $300m to Thailand, south-east Asia’s second largest economy, and there is another billion in the pipeline from the World Bank. Read more