The birth of Latin America’s newest baby bourse, Mila, was witnessed today by a proud panel of exchange chiefs, regulators, brokers, investors and listed companies.
Mila – named for the Spanish acronym for “integrated Latin American market” – weighs in at $614bn in market capitalisation, making it the second biggest in the region after Brazil ($1,500bn) and ahead of Mexico ($388bn). Continue reading »
Venezuela: a different kind of food crisis
Many people worry that a global food shortage will soon be upon us. It comes down to a basic mismatch between supply and demand: farmers may simply not be able to supply enough food to satisfy rapidly rising global demand.
In Venezuela, where food shortages have been a sporadic problem for a few years now, it’s a bit more complicated than that. That is, this fertile country with vast tracts of land lying unused is perfectly capable of producing more. There are a number of reasons why it doesn’t. One of the more important ones is the government’s insistence on maintaining strict price controls on a number of basic foodstuffs. Continue reading »
Brazil comes under friendly fire in currency war
They say Brazil is a land of contrasts, but in the past week things have been getting silly – and not only in the rumour-mill-gone-wild over who will be whom in president-elect Dilma Rousseff’s cabinet. (It hasn’t stopped with last week’s contradictory stories about the role of economics strong man Antonio Palocci. This week Henrique Meirelles, central bank governor, both definitely wasn’t and then definitely was going to keep his job.)
Today’s contrast du jour concerns inflation. Figures out this morning from the IBGE, the national statistics institute, show consumer price inflation hitting 0.75 per cent in October and 5.2 per cent over the past 12 months – well ahead of the government’s 4.5 per cent target and more than analysts expected. Continue reading »
Americas markets wrap: Inflation weighs on Brazilian stocks; copper boosts Chilean peso
Brazil’s benchmark Bovespa index fell more than 1 per cent, the most since October 19, as an uptick in Brazilian inflation fueled fears of an interest rate hike. Mexico’s IPC index also closed lower. Currencies were mainly softer against the stronger dollar, but Chile’s peso firmed as copper prices rose to a two-year high in London trading. Continue reading »
Video: emerging markets, not so hot?
Trade delegations led by the British prime minister in China and the US president in India in recent days have underlined the west’s interest in business opportunities in emerging markets. But research by Ernst & Young reveals profits are hard to come by and some executives are choosing to focus instead on developed markets. Andrew Shaylor of Ernst & Young discusses the findings with Barney Jopson of beyondbrics.
Bimbo takes larger slice of US pie
For Mexico’s Bimbo, the US is much more than the Latino market. The world’s biggest baking company has agreed to pay $959m for the North American baking division of Sara Lee – giving it access to mainstream biscuit and bread brands. Having previously swallowed US bakers Mrs Baird (1998) and Weston Foods (2008), Bimbo clearly has an appetite as large as its consumers’.
Sceptics might argue that cross-border expansion is Bimbo’s only option, given how hard Mexico has been hit by the recent downturn. But the group enjoys fat margins at home, and deserves credit for its willingness to bet big on an embattled rich-world asset. For the first time, most of the company’s revenues will come from the US, not Mexico. Continue reading »
CEE markets wrap: Moscow’s 6th day of gains; Warsaw bourse surges
CEE stocks had a strong session on Tuesday as rising commodity prices and liquidity provided by the US Federal Reserve’s stimulus program helped mining and metal stocks. Moscow’s main index made significant gains as its gas and steel stocks rallied. The first day of trading for the newly-listed Warsaw Stock Exchange saw its shares gain more than 25 per cent. In currencies, the Russian rouble gained against the dollar and the euro. Continue reading »
Warsaw Stock Exchange makes a loud debut
Normally, the emotions on view on stock exchange floors tend to oscillate between panic and satisfied greed, but today on the crowded floor of the Warsaw Stock Exchange, the atmosphere was one of patriotic pride, as the WSE traded for the first time following its privatisation by the Polish government.
In a ceremony this morning, Ludwik Sobolewski, the WSE’s president, Treasury Minister Aleksander Grad and Prime Minister Donald Tusk, extolled what has become one of the greatest successes of Polish capitalism.
“The exchange is one of the results of our yearning for freedom,” said Tusk said. Continue reading »
Deal of the day: Iranian company buys troubled Daewoo Electronics
By Tae Jin Park of mergermarket
Foreign acquisitions by Iranian companies are the rarest of M&A beasts. But Iranian white-goods distributor Entekhab Industrial is set to buy South Korea’s troubled Daewoo Electronics for $520m. The move is likely to raise eyebrows in the US, where Iran’s foreign trade is viewed with suspicion.
However, for Daewoo’s creditors, Entekhab’s arrival offers a welcome exit – eleven years, three failed purchase attempts and 1,500 employee redundancies after the Daewoo conglomerate collapsed under the weight of its debts. According to mergermarket data, the deal is the first since at least 2004 where a Middle Eastern company has bought a Korean counterpart. Continue reading »
China: savers spend . . . on luxury
Will China’s appetite for luxury goods never be sated? Lucky for the makers of all those fancy face potions and posh watches, the Middle Kingdom’s obsession with luxury is actually spreading to more and more Chinese people in more and more cities.
While policy makers focus on how Chinese consumers are saving too much and not spending enough, a new Chinese luxury report shows that up and down the demographic chain Chinese consumers are saving to spend on luxury goods. Continue reading »
Immelt to Beijing: we feel welcome
“Pai Ma Pi” or “stroking the horse’s bottom” is a beautifully expressive Chinese phrase used to describe the act of flattering someone who has power and influence over you. Today it is one of the first phrases that senior executives of multinational companies learn on their increasingly frequent trips to China.
Beyondbrics was unable to determine whether Jeffrey Immelt, chief executive of General Electric, had been practicing the phrase during his latest trip to Beijing on Tuesday. Continue reading »
Asia markets wrap: Chinese stocks fall on hot-money restrictions
Chinese stocks slipped from a seven-month high on Tuesday, after the government announced measures to limit inflows of hot money. Financials were the worst hit by the move, which was seen as a response to quantitative easing in the US. Indian stocks gained slightly, but State Bank of India plunged over 4 per cent after disappointing earnings. On the currencies market, the Chinese renminbi and the South Korean won both gained against the dollar. Continue reading »
New York headlines
* China to tighten control on inflows of overseas funds
* Standard Chartered to hire 4,000 in Asia
* PE group approaches Alibaba on Yahoo bid: source
* Obama to push greater US ties with Indonesia
* Argentina’s Matba open to merger with Rofex
At last: Turkish banks tap bond markets
“Turkey and Cuba are probably the only countries in the world with no secondary private sector debt market,” quipped one frustrated banker in Istanbul last year. But relief may be on the way. A new report by Fitch ratings agency highlights the trend of rising bond issuance by Turkish banks – largely in international markets, but bringing new hope for the dormant local market too.
Among the country’s biggest lenders, Akbank and Yapi Kredi have both tapped international markets since the summer, issuing five year senior bonds of $1bn and $750m respectively. Isbank has just hired advisors for its own $1bn issue, and others are expected to follow suit. Continue reading »
Taiwan’s two lines of currency defence
In Taiwan, the exchange rate of T$30.219 per US dollar is commonly known as the Ma Defence Line, a reference to the Taiwan dollar’s highest level since president Ma Ying-jeou (left) took office in 2008.
The defence was broken this week, as America’s quantitative easing weakened the US dollar and spurred hot money inflows into Asian economies. However, Taiwanese exporters seem to be doing rather well – and that points to the central bank’s own line of currency defence. Continue reading »
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