Daily Archives: November 15, 2010

Americas markets wrap: Lower copper prices weigh on Chile’s peso

November 15, 2010 9:46 pm by Shannon Bond

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Chilean stocks fell for the third straight days, with the blue-chip IPSA giving up 0.44 per cent as Cencosud, the country’s largest retailer, and Sonda, its largest IT company, declined. But Banco Santander Chile gained a per cent on Monday, following a rise in shares of its Spanish parent company. The Chilean peso softened against the dollar amid a dip in copper prices earlier in the day. Chile is the world’s leading producer of the red metal.

In Argentina, the Merval index gained 1.7 per cent, led by financials, on speculation over a deal to repay the country’s Paris Club debt. Markets were closed in Brazil and Mexico for national holidays. Continue reading »

Posted in Global, LatAm | Permalink

South Africa scrutinises Walmart move for Massmart

November 15, 2010 8:48 pm by Simon Mundy

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After HSBC mysteriously dropped its courtship of Nedbank, pessimists in South African business are looking out for a hitch in the latest big foreign takeover story: Walmart’s move for Massmart, the country’s third-biggest retailer. Their ears will have pricked up, then, at today’s news that South Africa’s government intends to set up a panel to investigate the economic impact of the mooted takeover, following a torrent of opposition from trade unions. Continue reading »

Google vs China . . . continued

November 15, 2010 8:15 pm by Ranjit Lall

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The bitter dispute between Google and China rumbles on. In the latest episode, the company has released a white paper urging the international community to fight internet restrictions, which it calls the “trade barriers of the 21st century”.

Naturally, Google officials denied that the report was targeted at a specific country. Bob Boorstin, Google’s director of public policy, told the FT:

It’s not to do with what’s happened in China – it’s a broader attempt to get at these issues. Governments that block the free flow of information not only are breaking trade agreements in certain ways, but they’re hurting their own economies as well.

Continue reading »

Tags: Google, internet, trade Posted in China, Global | Permalink

CEE markets wrap: stocks gain; Hungary raises growth forecast

November 15, 2010 5:41 pm by Henry Mance

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Stocks in Russia, Turkey and Hungary rose on Monday, recovering some of last week’s losses. However, with continued fears about debt in the eurozone periphery, the region’s currencies fell against the dollar.

Hungary’s economy ministry raised its forecast for GDP growth this year from 0.8 per cent to 1.6 per cent, adding that structural reforms would be announced in spring 2011. Continue reading »

Posted in Global | Permalink

Maserati in Peru? Better try a Hummer

November 15, 2010 4:31 pm by Naomi Mapstone

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Someone in Peru has just paid $265,000 for a Maserati sports car, and presumably plans to drive it around the streets of Lima. That says a lot about the lure of a gleaming, box-fresh Italian sportscar, because – given the city’s rat-race of combi vans, moto-taxis and overladen lorries – the more practical choice would be something brutish and indestructible. A Hummer, maybe.

The Maserati purchase is the talk of 2010 Lima Motorshow, which runs all this week, but it doesn’t come out of the blue. The capital city, which is home to one in three Peruvians, is experiencing a surge in car purchases as the strong economy spurs consumer demand. Continue reading »

Tags: infrastructure, transport, vehicles Posted in Peru | Permalink

Brazilian drugmaker snubs Portugal

November 15, 2010 3:33 pm by Andrew Jack

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Brazil’s fast economic growth is driving two parallel trends in the pharmaceutical industry. First, western companies – whose traditional markets are stagnating – are returning to the country. And second, their Brazilian counterparts, buoyed by the wave of domestic growth, are looking for foreign acquisitions.

Yet, amid all this, there’s further humiliation for Portugal, Brazil’s former colonial master. The shared history, language and business days – Lisbon is currently two hours ahead of Rio de Janeiro – seem to mean little to Brazilian companies as they search for improved economies of scale. Continue reading »

Tags: M&A, pharmaceuticals Posted in Brazil | Permalink

Chart of the week: what is driving Chinese inflation?

November 15, 2010 2:20 pm by beyondbrics

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By Valentina Romei and Ranjit Lall

In October Chinese inflation soared to 4.4 per cent, its highest level in over two years. The authorities are concerned: high inflation suggests that the government’s stimulus measures are causing the economy to overheat.

This week’s beyondbrics chart (after the break) shows that Chinese inflation is being primarily driven by rising food prices, which have shot up 10 per cent since October 2009. The price of non-food items has risen by only 1.6 per cent in the same period. Reining in inflation may not be as straightforward as hiking interest rates. Continue reading »

Tags: chart of the week, China inflation, inflation Posted in China | Permalink

Asia markets wrap: Asian stocks fall; Shanghai recovers slightly

November 15, 2010 1:42 pm by Ranjit Lall

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Asian markets fell to a two-week low on Monday, as fears of monetary tightening in China and concerns about eurozone debt weighed on investors. Stocks in Hong Kong, Taiwan, Indonesia and Vietnam all fell, as the MSCI Asia ex. Japan lost 0.7 per cent. The Shanghai Composite struggled to recover from Friday’s 5.2-per-cent fall, rising just 1 per cent (see chart).

“Now the focus is on the global economy,” said Song Seng Wun of CIMB-GK Research. “Investors do not want to rush, as there may be still rough weather going ahead. The same trend may continue if the EU crisis worsens and the US economy is not expanding.” Continue reading »

Posted in Global | Permalink

Video: QE2 and India’s economy

November 15, 2010 1:27 pm by beyondbrics

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Gita Gopinath, economics professor at Harvard University, tells Amy Kazmin that the Indian economy is beginning to show signs of overheating but that inflation is not worrying just yet. The concern, Gopinath says, will be if inflows of short-term capital increase rapidly.

Tags: video Posted in India | Permalink

Guest post: capital controls should be Latin America’s last resort

November 15, 2010 12:30 pm by beyondbrics

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By Andrew Powell and Alessandro Rebucci of the Inter-American Development Bank

Latin America is attracting huge capital inflows. To slow currency appreciation and reduce the risk of overheating, some countries in the region are implementing economy-wide capital controls, such as taxes on foreign investments.

This approach has just been given tentative support at the Seoul G20 summit, but it is problematic because controls on capital inflows should not be used to manage exchange rates. Recent research by the Inter-American Development Bank indicates controls can be used to discourage speculative capital that may spur boom-bust cycles and financial crisis. But this does not apply to all countries. In economies that have a well-developed financial system capable of intermediating foreign capital effectively, capital controls can hamper growth and hurt productivity. Continue reading »

Tags: capital controls, guest post Posted in Global, LatAm | Permalink

Brazil: the challenges for Rousseff

November 15, 2010 11:43 am by beyondbrics

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The FT publishes a special report on Brazil on Monday that charts some of the challenges facing Dilma Rousseff, president-elect of Latin America’s biggest economy. Over the past eight years, outgoing president Luiz Inacio Lula da Silva helped to consolidate the country’s economic gains. His policies helped lift millions out of poverty, and he projected an extraordinary international vision of Brazil as a land of opportunity – one reflected in the country’s growing geopolitical global role.

But he did not do it alone, even if he sometimes acted as though he believed he did. Brazilian multinationals played an important role. So did the expansion of local credit. And then there was the fortuitous role played by chance – and China’s rise. Together, they created a new middle class of consumers, helping the country reach a new-found confidence and even begin to tackle its chronic social problems, such as crime. Even so, much remains to be done – not least in the economy.

Posted in Brazil, LatAm | Permalink

New York headlines

November 15, 2010 11:34 am by beyondbrics

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* SAIC agrees to take GM stake in IPO: sources

* Abu Dhabi fund eyes Europe deals worth up to €2bn

* Religare eyes emerging markets deals

* Chávez moves to radicalised revolution

* China vows reforms to cope with global uncertainty

* Markets mixed Continue reading »

Posted in Global | Permalink

Deal of the day: Trafigura spends $296m on petrol for Africa

November 15, 2010 10:45 am by Barney Jopson

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What’s fuelling Africa’s economic growth? Well, it’s fuel, partly. Whether you’re talking shipments of commodities overseas, or imported goods being snapped up by middle class Africans, the stuff mostly gets moved by truck on rough roads – and for that you need petrol.

That rising demand is one reason why a unit of Trafigura, a commodities trader, has agreed to pay $296m for BP’s petrol station and supply businesses in parts of southern Africa. Continue reading »

Tags: energy Posted in Africa, Global, Mozambique, Namibia, South Africa | Permalink

China: inflation trumps QE2, so take profits now

November 15, 2010 10:00 am by Josh Noble

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This isn’t the first time analysts have poured cold water on China’s recent hot streak. Last week, Vincent Chan and Peggy Chan at Credit Suisse predicted a 10-15 per cent decline on the Shanghai market. Now Steven Sun, head of China equity strategy at HSBC, is doing the same.

Rising food prices, he says, look troubling – and outweigh the bullish signals of the Fed’s coming flood of cash. Continue reading »

Posted in China | Permalink

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beyondbrics

Daily Archives: November 15, 2010

Americas markets wrap: Lower copper prices weigh on Chile’s peso

South Africa scrutinises Walmart move for Massmart

Google vs China . . . continued

CEE markets wrap: stocks gain; Hungary raises growth forecast

Maserati in Peru? Better try a Hummer

Brazilian drugmaker snubs Portugal

Chart of the week: what is driving Chinese inflation?

Asia markets wrap: Asian stocks fall; Shanghai recovers slightly

Video: QE2 and India’s economy

Guest post: capital controls should be Latin America’s last resort

Brazil: the challenges for Rousseff

New York headlines

Deal of the day: Trafigura spends $296m on petrol for Africa

China: inflation trumps QE2, so take profits now

Further reading: Bribes, reform and déjà vu

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