Monthly Archives: October 2010

It’s official: Dilma Rousseff of the ruling leftwing PT will be the next president of Brazil (and the first woman to hold the job) from January 1, 2011. She beat José Serra of the opposition centrist PSDB in a second-round run-off on Sunday, winning 56 per cent of the vote compared to Serra’s 44 per cent. Read more

Will Barack Obama prove more popular in India than Indiana? Is India’s central bank more worried about inflation or the rupee? This week could provide some answers, with Asia’s third-largest economy hosting the US president and seeing an interest rate decision.

Brazilian politics will move into post-election mode. The country’s new president should be known by Monday morning but, with Dilma Rousseff enjoying a double-digit lead in the polls, a real race might not be seen until the São Paulo grand prix next Sunday. Meanwhile, global markets will hang on the US Federal Reserve meeting on Wednesday. In central and eastern Europe, the budget wrangling continues. Read more

No surprises from the last two big opinion polls before Brazil’s election run-off on Sunday. Both Datafolha and Ibope show Dilma Rousseff of the ruling leftwing PT firmly on course to succeed her mentor, outgoing President Luiz Inácio Lula da Silva, with a lead of at least 10 percentage points over José Serra of the centrist opposition PSDB. Read more

With just two days to go before the second round in Brazil’s presidential election, there is little doubt that Dilma Rousseff, pro-government candidate of the ruling leftwing PT, will win Sunday’s run-off against José Serra of the centrist opposition PSDB who is the market’s and the FT’s preferred candidateRead more

With US growth picking up slightly, Polish and Russian stocks rose on Friday. The region’s currencies fell against the dollar, led by the rouble, after the Russian central bank held rates. However, the Hungarian forint outperformed, nearing a six-month high against the dollar, ahead of this weekend’s budget announcement. Turkey’s stock market was closed for a holiday. Read more

South Africa’s banks had a good crisis: prudent management and strict regulation meant they were less exposed than European and US peers. But they are being strained by a sluggish recovery – as shown by Standard Bank’s reluctant decision to lay off 2,100 staff, more than 4 per cent of its workforce.

Jacko Maree, chief executive of Standard Bank, Africa’s lender bank by assets, justified the redundancies by pointing to the bank’s declining revenues and return on equity. And he voiced little confidence that a revival was near. Read more

By Barney Jopson and Alexandra Stevenson

This week began with India being pushed by the US to take a “more active” role in political and security cooperation in Asia, at a time when the region is becoming increasingly anxious about a more assertive China.

Indian leaders themselves have expressed fears their country is being hemmed in by Beijing’s expanding ties with Pakistan, Burma, Nepal and Sri Lanka. But recent days have provided a reminder that trade and business ties between the two regional heavyweights are proliferating too. Read more

On the internet in China, many things are not quite what they seem, because the lack of press freedom often helps online rumours fly faster than they would elsewhere. The latest example is the growing outcry about the fact that Ma Huateng, chief executive of Tencent, China’s largest internet company, and one of the richest people in the country, is receiving a housing allowance from the government.

According to a notice published by the Shenzhen Human Resources and Social Welfare Bureau two weeks ago, Ma – pictured playing golf in his office a few years – gets Rmb3100 ($465) per month in the third quarter because he is a “local-level leadership talent”. Read more

The world’s fastest and most expensive car – the Bugatti Veyron 16.4 Grand Sport – is coming to India, the country where the world’s cheapest car, the Tata Nano, was born.

The Veyron’s makers say the car is a luxury in the best tradition of the maharajas. But the sales focus is on the kings of the new India: the 69 people who form the largest national group of dollar billionaires outside the United States. Read more

* Boost for AIG, as AIA shares surge 17% on debut

* Jakarta eyes action to deter ‘hot money’

* India, US may jointly counter China’s power in Africa

* Bidders vie for Carrefour Asian stores

* Premium carmakers’ profits roar ahead Read more

Ahead of next week’s US Federal Reserve meeting, Asian markets were again marked by investor caution on Friday. However, Indian stocks were lifted by the country’s second-biggest bank, ICICI, which said second-quarter profit rose 19 per cent.

In Hong Kong, insurer AIA gained 17 per cent on its debut, giving the company a market cap of $35.8bn. On the currencies market, the Indonesian rupiah was roughly unchanged against the dollar, following the central bank’s indication that it is considering intervention. Read more

We know that China is now the primary price setter for a plethora of global commodities, ranging from cotton to copper, but one curiosity of the country’s rise is that its commodity exchanges have not taken on a similar global role.

The FT’s Leslie Hook reports on Friday on the Dalian Commodities Exchange, one of the ambitious Chinese exchanges trying to change that by extending its reach with new products. But the possibilities are still limited by laws banning foreign investment and China’s renminbi capital controls. The full story is here.

From the FT,

From elsewhere,

Results from Facebook pages will soon begin appearing in Yandex, the leading search engine in Russia. Yandex.ru will also get a Facebook widget on its homepage.

It’s another example of search engines gaining access to the information on Facebook’s social graph. Just two weeks ago, Facebook deepened its ties with Microsoft’s search engine, Bing. But the partnership also puts a wrinkle in Facebook’s relationship with investor Mail.ru. Read more

People close to Petronas, Malaysia’s state-owned oil and gas producer, surprised the market earlier in October by suggesting that the impending initial public offering of its chemicals subsidiary might raise as much as $4bn, nearly double initial estimates.

That would make the IPO of Petronas Chemicals Group the biggest in Kuala Lumpur since the initial public offering of Maxis, the telecommunications group, which raised $3.3bn in 2009. But could even the $4bn figure be conservative? Read more

By Ash Misra of Lloyds TSB Private Banking

Chinese shares have substantially outperformed their developed market peers over the past four years, as China bulls will remind you, but this has left them overvalued.

This valuation premium seems unsustainable given the huge challenges China faces. The country must transition away from an export and investment-led growth model that is becoming progressively less effective. It must cope with changes in its labour market, which may prove inflationary, and with international pressure to revalue the renminbi, which could increase stress on its banking system. Read more

* Jakarta eyes action to deter ‘hot money’

* India gold sales in festival week may jump 40 per cent

* AIA rises on Hong Kong debut after city’s biggest IPO

* India, US may jointly counter China influence in Africa

* Bidders vie for Carrefour Asian stores Read more

Visitors cast their shadows over a commercial jet made by Brazilian aircraft maker Embraer during the opening day of the Latin American business aviation fairThings may be picking up for Embraer, the world’s largest producer of regional aircraft, but not very quickly. Third-quarter dollar earnings for the Brazilian company indicated it may be clawing itself back from a difficult crisis, but still lags far behind the rest of the country’s booming economy.

In a US regulatory filing lodged late Thursday, the company announced third-quarter profits of $98.5m, up from $58 million in the same period last year and well above analyst expectations. The company earned $70.3 m in the second quarter of 2010. Read more

Enrique Cueto, head of LATAM Airlines GroupAs Chile’s LAN airlines continues its march towards regional dominance with the purchase of Colombia’s Aires, it’s worth taking a look at another turf war in the making: oneworld versus Star Alliance.

LAN’s merger with Tam of Brazil still has many regulatory and political hurdles to overcome before a newly created LATAM Airline Group could become the region’s biggest airline and one of the world’s top 15. One of the key questions for passengers that is yet to be answered is whether LATAM’s passengers would be earning frequent flyer points with oneworld (LAN) or Star (Tam) – or both. Read more

Mexico's IPC indexMost Latin American markets gained Thursday as the dollar weakened, commodities rose and investors looked ahead to next week’s Federal Reserve meeting, which is expected to bring another round of monetary stimulus. But Brazil’s benchmark Bovespa fell as credit card processor Redecard tumbled after reporting a 2.7 per cent drop in profits. Read more