India: outsourcing outsourcing
What happens when a low-cost outsourcing country finds itself undercut by an even lower-cost outsourcing country?
It outsources to its competitor, that’s what. Having seen the Philippines emerge as a rival, India’s huge outsourcing industry is moving some basic call centre and back office services out east. On Thursday, Tata Consultancy Services, India’s biggest software company, launched its first call centre in the Philippines – and others seem sure to do the same. Continue reading »
Following this morning’s $4.1bn acquisition of Russia’s Wimm-Bill-Dann by Pepsi, Reuters updates the year’s international M&A numbers:
- Pepsi’s $4.1 billion acquisition of Russia’s Wimm-Bill- Dann brings the volume of US acquisitions in the emerging markets to $23.8 billion, up 94% from full year 2009 and the biggest year for US/Emerging Markets activity since 2007.
- Worldwide Cross-Border M&A totals $843.2 billion so far this year, up 54% from full year 2009. Cross-border M&A accounts for 39% of worldwide deal activity this year, compared to 27% last year. Continue reading »
Americas markets wrap: Mexican stocks climb to new high on US home sales
Upbeat US housing data and a global relief rally lifted Mexico’s IPC to another new high today, while in Brazil, stocks were also boosted by an uptick in the nation’s industrial output. Shares in Cetip, the clearinghouse, surged 4.9 per cent to a record high 21.50 reais after announcing its $1.16bn purchase of GRV Solutions yesterday. Currencies across the region firmed against the dollar as commodities rallied. Continue reading »
Cetip cashes in on Brazil’s credit binge
Brazil’s banks aren’t the only players profiting from the country’s rapid rise in consumer credit. Someone has to keep track of the loans everyone is taking out to buy their shiny new toys, to keep them honest.
Enter GRV Solutions, which acts as a custodian to all car loans in Brazil, and has emerged as a juicy takeover target for Cetip, Brazil’s biggest clearinghouse. Continue reading »
Turkish relief after rare listing success
The acclaim that greeted Thursday’s market debut of Emlak Konut, a Turkish land developer, betrayed the nerves that preceded its first day of trading. Several big share offerings have flopped this year in Turkey, and a host of smaller companies have underperformed since listing. Emlak Konut, owned by the state housing agency TOKI, has become the biggest Turkish company to stage a successful initial public offering since the 2008 flotation of Turk Telekom. Continue reading »
S African data: too early to celebrate?
After last week’s disappointing third-quarter growth figures, South Africa received some better news this week: manufacturing is expanding after three months of decline.
The purchasing managers’ index (PMI) score of 52.9 – where a score above 50 represents an increase in output – is consistent with improving performance worldwide. But while some economists are hailing this as a sign of a strong recovery from last year’s recession, others warn that it would be premature to celebrate. Continue reading »
Football feast: the World Cup heads to Russia and Qatar
So the new world order has a messenger – and it’s the Swiss man who told female footballers to wear sexier outfits. Sepp Blatter, the head of Fifa, announced on Thursday that Russia and Qatar, superpowers in neither football nor organisation, will host the World Cups in 2018 and 2022. That’s four consecutive World Cups in emerging markets – following on from South Africa and Brazil. China could well host the 2026 competition, making it five in a row. If football diplomacy were poker, the developing world would have a full house.
This time Fifa overlords received bids from countries with infrastructure and heritage – Spain, the Netherlands and the England – and two of the world’s three biggest economies – Japan and the USA. But no, they wanted potential: the chance to sprinkle football’s gold-dust over the emerging middle classes. Russia and Qatar better start making some serious investments. Continue reading »
More than money: make a home in EM
What does “getting into emerging markets” really mean? Buying a Brazilian equity fund; signing up for Nigeria’s debut eurobond; outsourcing your production to a factory in Vietnam. Such are the EM bets renowned for their high risks and high rewards.
But if you’re pulling the strings from a plush office or a comfy home in a western metropolis, it is not – in the big scheme of things – all that courageous. Much braver is moving your whole life to an emerging market. Continue reading »
CEE markets wrap: Russia’s Wimm-Bill-Dann soars on PepsiCo deal
Central and eastern European stocks rose for a third consecutive day on Thursday, as higher oil prices and reduced fears over the European debt crisis buoyed investors.
Russia led gains, with dairy company Wimm-Bill-Dann jumping 60 per cent on PepsiCo’s purchase a controlling stake. After Fifa announced Russia will host the 2018 World Cup, the rouble strengthened against the dollar (see chart). Continue reading »
Guest post: PepsiCo highlights Russia’s bright economic story
By Chris Weafer, chief strategist, Uralsib Capital
Far too often the headlines about Russia are negative, sometimes justifiably and sometimes not. Stories about political intrigues, corruption, and a poor or risky business environment have a negative effect on how investors view Russia. But they are also distractions from a more boring but fundamentally strong story. That is the continuing economic expansion and Russia’s steady progress towards a more western-style economy.
Another piece of positive news – its successful bid for the 2018 World Cup – is dominating the news on Thursday, but equally significant has been the announcement of PepsiCo’s $5.4bn acquisition of a controlling stake in Wimm-Bill-Dann, one of Russia’s biggest juice and dairy products companies. It serves as a timely reminder that companies are making money in Russia. Continue reading »
Deal of the day: Postbank exits India
By Mithun Varkey and Sounak Mitra of mergermarket
Even as commercial controversy unfolds in India, business in many areas goes on as usual. A consortium led by Mumbai-based Dewan Housing Finance Corporation has announced the acquisition of Deutsche Postbank Home Finance (DPHF), the Indian mortgage lending subsidiary of Frankfurt-based Postbank for approximately INR 10.79bn (€175m).
For Postbank, the sale is part of its effort to focus on the German market in its retail banking business, according to the company. But some analysts say overseas financial institutions are either growing wary of potential new regulations in India, or are already weary of existing ones. Continue reading »
World Cup 2022: Qatar gets the cream
Qatar will host the World Cup in 2022 – becoming the first Middle Eastern country and the smallest country ever to do so. With its slogan “Expect Amazing”, and promise of carbon-cutting technology, it beat off competition from the USA, Australia, Japan and South Korea. Fifa announced the decision in Switzerland. For all the latest news, go to the FT’s live blog from Switzerland. Fifa have said they announce how the vote went, round-by-round, later on Thursday.
No Putin, no problem: Russia wins World Cup
Russia will host the World Cup in 2018 – the first time an eastern European country has held the competition. It beat rival bidders England, Spain/Portugual and the Netherlands/Belgium. Prime minister Vladimir Putin is now set fly to Zurich; his decision to stay away from the final hours of lobbying has been vindicated. For all the latest news, go to the FT’s live blog from Switzerland. Fifa have said they announce how the vote went, round-by-round, later on Thursday.
Russia is seen as Europe’s biggest emerging football market. Thirteen Russian cities will host matches, and Russia has pledged visa-free travel for all foreign ticket-holders. The country plans to invest $3.82bn in upgrading and building stadiums.
Why Thailand invests in Burma
By Simon Roughneen in Bangkok
There is some confusion over whether Thailand or China is the biggest source of foreign investment in Burma. But it’s clear that Thai interest is gathering pace: the Saha Group is the latest Thai cash-rich business to enter the hermetic south-east Asian country, announcing a plan to open 25 stores there by 2012.
And Burma offers more than just a untapped market. For Thai businesses, the country also offers respite from the environmental and other corporate standards that exist at home. Continue reading »
Video: India’s microfinance industry faces crisis
In this FT video, Amy Kazmin, south Asia correspondent, talks to Vijay Mahajan, president of the Microfinance Institutions Network, about the challenges the micro lending industry faces. Thursday’s FT also has a big analysis of controversies in the microfinance sector.
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