Americas market wrap
Latin American stocks followed global equities lower on Monday as investors focused on the risk of the debt crisis spreading to other European countries including, for the first time, Italy. However, shares moved off the session’s lows in a late rally. Continue reading »
Serbia: EIB makes an advance
If so-called “enlargement fatigue” in the European Union has been exacerbated by the eurozone debt crisis and Ireland’s €85bn bail out, it does not mean the door has completely closed for aspiring EU member Serbia.
It wants to be “EU-ready” by 2015 and its enthusiasm seems to be matched by the bloc’s joint financial institution, the European Investment Bank, which on Monday opened a new regional office in Belgrade, the Serbian capital. Continue reading »
Poland: zloty down on debt fears
In his recent public declarations, Jacek Rostowski, Poland’s finance minister, has been stressing that his country’s debt and deficit situation are a serious, but not critical issue.
The markets are not listening. In trading today, the zloty slumped by about 1.5 per cent against the euro, and by about 3 per cent against the dollar and the Swiss franc, the currency in which many Poles have their mortgages denominated. Continue reading »
CEE markets wrap: Turkey, Hungary lead losses
Turkey and Hungary suffered sharp falls as Ireland’s rescue package failed to quell fears that Europe’s sovereign debt crisis would spread to other countries. A new report by the European Commission warning that the regional economy would weaken next year due to budget cuts added to concerns.
“In central and eastern Europe markets are not convinced by the Irish bailout,” Timothy Ash, head of emerging markets research at the Royal Bank of Scotland, told beyondbrics. “They will continue to worry about a slowdown in the European economy until growth improves. ” Continue reading »
Hands untied: Russia hints at rate rise
Russia’s central bank may be set to raise interest rates for the first time in two years, according to comments from its first deputy chairman, Alexei Ulyukayev. A hike would end the cycle of lowering interest rates, which began in April 2009 when the bank cut its benchmark refinancing rate from 13 per cent to 7.75 per cent. The move to contemplate a rise in rates comes after a mild increase in inflation, due to the economic recovery and higher food prices, following last summer’s drought. Continue reading »
Unpredictable Hungary spooks markets
Hungary’s central bank decision on Monday to raise interest rates by 25 basis – its first tightening since the financial crisis kicked off in 2008 – only increases the country’s growing reputation for unpredictable decision-making.
Economists had certainly not foreseen the move, with only one of 21 analysts in a Reuters poll last week expecting that the bank would increase rates from the 5.25 per cent they had stood at for six months. Such is investors’ consternation over Hungary’s recent policy steps and the evident tensions between government and national bank that the forint fell – extending its recent decline. Meanwhile, the stock market is now nearly 15 per cent below an October peak (see charts below pagebreak). Continue reading »
After years of talking about international cooperation to fight insider trading, regulators appear finally to be doing something – and the effort is reaching Hong Kong. Regulators in the territory, in conjunction with their counterparts in the US and UK, are putting substantial energy into tackling suspicious trading patterns that cross international borders, as the FT reports.
At the same time, regulators in mainland China and Japan have recently stepped up their scrutiny of suspicious-looking deals in their home markets, suggesting that they too may be joining the fight against traders who seek improper advantages. Continue reading »
[snap] Hungary raises rates – but forint falls, on political tension
Hungary’s central bank has raised its key interest rate by 25 basis points – saying that “there are risks that inflation expectations will rise,” as the country recovers from recession. But the announcement actually weakened the Hungarian forint (see chart), because it is likely to further damage the relationship between the central bank and the government.
The bank’s focus on inflation is at odds with the concern of centre-right president Viktor Orban, who has already criticised the bank for its hawkishness, slashed the governor’s salary, and – most recently – drafted plans to give parliament control of appointments to the rate-setting committee.
Deal of the day: Huaneng spends $1.2bn in US, as Chinese power growth cools
A US electricity company can say goodbye to an Indian investor – and hello to a Chinese one. The world’s second-biggest electricity producer, China Huaneng Group, is paying India’s GMR Group $1.2bn for its 50 per cent stake in Massachussetts-based InterGen.
“Unlike many Chinese acquirers internationally, Huaneng is not gaining control over resources or intellectual property,” Michael Parker, of analysts Sanford C. Bernstein, tells beyondbrics. He argues that Huaneng is buying foreign electricity producers to compensate for weakening performance in its domestic market. Chinese authorities are trying to make growth less energy intensive, and the last year’s stimulus-fuelled boom in energy use is unlikely to be sustained. Continue reading »
India: Tata on the attack
While the world digests the latest Wikileaks releases, India is almost choking on a leaks scandal of its own.
Ratan Tata, chairman of Tata Group, the country’s most respected company, on Monday went to the Supreme Court to try to stop the circulation of taped phone conversations. With the alleged contents whizzing around the sub-continent’s internet, his efforts may be fruitless. But his actions highlight how a spate of recent political scandals is hitting India’s reputation as a place for doing business. Continue reading »
Asia markets wrap: stocks mixed; Cairn India surges
Asian stocks were mixed on Monday, as positive news about Ireland’s rescue package was offset by renewed concerns about security tensions on the Korean peninsula. Indices in China, South Korea and Indonesia edged downwards, while those in Hong Kong, India and Thailand all rose by more than 1 per cent. “Global thematics are driving markets right now,” commented Jason Teh of Investors Mutual in Sydney.
In Mumbai, Cairn India was up 6.7 per cent, the most since June 2009, after the government said it would decide by February whether Vedanta Resources can buy the oil explorer. Continue reading »
New York headlines
* Thai electoral fraud case dismissed
* Walmart offers $2.4bn for Massmart stake
* China’s Tencent eyes Facebook’s success
* BASF set for €1bn China investment
* Cnooc venture to buy BP’s Pan American stake for $7.1bn Continue reading »
Wikileaks in China: was the Politburo behind Google attacks?
One of the juicier nuggets from the leak of 250,000 US embassy cables concerns Google’s partial retreat from China earlier this year. The newspapers with access to Wikileaks’ trove say diplomats relayed word that China’s Politburo had directed the hacker attacks that contributed to Google’s exit from the mainland.
Google has said that cyber attacks on its corporate infrastructure came from inside China. If they were directed from the top of the political hierarchy, that would be deeply troubling to all those who are wary of China’s growing power. Continue reading »
Further reading: Chinese double-talk, Indian scams, and global warming
From the FT:
From elsewhere:
Taiwan: election drama, markets calm
Elections in Taiwan’s relatively young democracy are boisterous affairs and this past weekend’s vote for the mayors of the island’s five major metropolitan areas was no exception, with mass rallies and campaign trucks criss-crossing the land.
In the end, the ruling Kuomintang (KMT) party secured three of the five seats up for grabs, confirmation that voters support president Ma Ying-jeou’s economic and cross-Strait policies, despite Ma’s relatively poor personal approval ratings. But whereas past elections convulsed the stock market, on Monday shares in Taiwan barely budged: the main Taiex index closed up 0.66 per cent to 8367 points. Continue reading »
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