Rio governor looks to turn the page on crime
Fresh off declaring victory in the battle between government forces and organized crime for control of Rio de Janiero’s favelas, state governor Sérgio Cabral (pictured) was on the road this week to drum up interest – and investment – in Brazil’s third-most populous state.
Brazil’s markets were unfazed by last month’s outbreak of violence, and Mr Cabral was likewise upbeat about the outlook for improved public safety ahead of the 2014 World Cup and 2016 Olympics. Continue reading »
Americas markets wrap: Copper, rate hike lifts Chilean peso
Latin American stocks rose on Friday, with Brazil’s Bovespa paring its weekly loss and Mexico’s IPC making a weekly gain, as investors weighed mixed news from the eurozone and the US.
“On the downside we had the ratings cut for Ireland, and on the upside we have the United States, which finally passed the tax cut package,” Jaime Aguilera of HSBC told Reuters.
Currencies were mainly weaker against the dollar, but Chile’s peso hit its highest level since May 2008, boosted by the rising price of copper, Chile’s main export, and the central bank’s quarter-point rate hike on Thursday. Continue reading »
Deal of the day: $331m more to charge up India’s power supply
Few doubt the energy of Indians and their businesses. Can the country’s power supply gear up fast enough to support them? The good news is that a few hundred million of US dollars in foreign investment have just flowed into the energy sector. Unfortunately, that’s just one-thousandth of the figure that the government thinks is needed over the next five years.
GVK Energy, the power-focused branch of Krishna Reddy’s infrastructure group, announced earlier this month that it was selling a 21 per cent stake to UK private equity investors 3i for $177m. Now two more private equity players – Actis, and an arm of Singaporean sovereign wealth fund GIC – have signed into the same deal, taking the total investment to $331m. Continue reading »
CEE markets wrap: Turkey stocks down; Uralkali slips on merger news
Turkish stocks fell again on Friday, after the central bank announced a widely-expected increase in bank reserve requirements. However, with German business confidence reaching its highest level since reunification, and Poland’s industrial output accelerating, Russian and Polish stocks rose.
In Moscow, fertiliser company Uralkali underperformed, after billionaire Suleiman Kerimov outlined a plan to merge the company with domestic counterpart Silvinit, in a move that would create the world’s second-biggest potash producer. Continue reading »
India: Big Bazaar goes online
Big Bazaar, one of India’s largest hypermarket chains, is known for a two things: huge crowds of family shoppers and great discounts. Soon it will also be known for websites crowded with discounts on its wares – groceries, cosmetics, apparels, home ware products and small electricals. The group is among the first retailers to go online as the company launches a large-scale push for digital commerce.
Anshuman Singh, the CEO of Future Group’s logistics arm told beyondbrics that it is currently focusing on streamlining its digital commerce supply chains, a move that is designed to tap a larger portion of India’s growing consumer market. Continue reading »
Taiwan: wages rise – a bit
By Ralph Jennings in Taipei
The last ghost of recession in Taiwan vanished this week with a government forecast for record high average monthly salaries. After years of stagnation and a sharp drop in crisis-hit 2009, average salaries will rise 5.4 per cent this year to an average of T$44,453 ($1,474) per month, according to the Council for Economic Planning and Development.
That’s just as well. Workers have consistently faield to benefit from Taiwan’s rapid economic growth in recent years. Average salaries have risen just 5.8 percent since 2000 compared with a 45 per cent rise in real GDP. Continue reading »
Biscuit, anyone? Brazil’s age of Zero Hunger is over
By Andrew Downie in São Paulo
Brazil is famous for Zero Hunger, the flagship government program designed to eradicate poverty. But after a decade in which millions of poor people have joined the consuming classes, the phrase is no longer appropriate. New data shows a more fitting slogan might be Hungry.
Unfortunately for Brazil, that’s hungry for soft drinks, biscuits and beer. A report released by the country’s statistics agency said the proportion of processed food in daily diets has grown considerably since 2002, with breads, biscuits, soft drinks and readymade meals all gaining space at the expense of traditional Brazilian staples like rice, beans and manioc flour. Continue reading »
A carrier? What else are we missing?
For years one of the great questions about China was when Beijing might start building an aircraft carrier. Spies, diplomats and journalists have burnt tankerloads of midnight oil trying to find out. So it is a shock to learn, courtesy of Japan’s Asahi newspaper, that China actually told the world seven months ago – and the world did not notice.
Admittedly, the fact that Beijing last year approved a carrier programme was buried in one sentence of a long government report. But it was published as long ago as May and no China-watcher publicly claimed to have spotted it until the Asahi printed its scoop on Friday. A lesson there, perhaps, in how difficult it is to follow Beijing. And one with investment implications – if outsiders can miss an aircraft carrier how can they be sure about where economic policy is heading? Continue reading »
Inflation: China says relax
Higher food prices are an obvious cause for concern in a nation dedicated to building a ‘harmonious society’. When food riots erupted across Africa and Asia in 2008, there were doubtless shivers down Politburo backs, not least of all because higher vegetable costs were at the heart of demonstations in Tiananmen Square just over two decades ago.
So when last month inflation hit a two year high, there’d be good reason to think the Chinese government would be getting twitchy. Instead the message is: relax. Continue reading »
Asia markets wrap: Taiex extends 2-yr high; fat finger in Manila
Asian stocks saw only small changes on Friday, with South Korea’s Kospi returning to a three-year high, while Taiwan’s Taiex extended its two-year peak. India’s markets were closed.
In the Philippines, Cebu Air – the country’s biggest budget airline – fell 25 per cent in early trading, after a trader accidentally sold at 82 pesos. It closed back up at 106 pesos, down 3.7 per cent for the day. The stock remains 20 per cent below its debut closing price in late October, leading the airline’s president to call it “severely undervalued”. Continue reading »
New York headlines
* North Korea says to strike South if drill goes ahead
* Santos secures 20-year LNG deal to supply Korea
* China can cap inflation next year, says regulator
* Wen visits Pakistan to revive road-rail link from China to Gulf
* Indian central bank acts on cash crunch Continue reading »
What slowdown? Oil to drive growth
For the global economy, Christmas parties came early this year: stimulus spending boosted growth to possibly unsustainable rates. Next year, a mild hangover is likely to kick in – with slower growth in much of the world, including China, India and Brazil.
Yet, for those in need of some more festive cheer, there are three regions that are forecast to see faster growth in 2011: the Middle East and North Africa, sub-Saharan Africa, and Russia and central Asia. All three will average at least 4.6 per cent growth, according to the IMF, overtaking Latin America as the world’s most dynamic regions after Developing Asia. Why are they accelerating? The common thread is oil. Continue reading »
Turkish rates: move and counter-move
By Barney Jopson and Delphine Strauss
Turkey’s counter-intuitive move to cut interest rates in spite of inflationary risks was followed on Friday by increases in banks’ reserve requirements intended to slow credit growth and offset the stimulative effect of the rate cut.
The central bank’s actions, which are designed to curb hot money inflows whilst also fighting domestic inflationary pressures, fly in the face of conventional monetary wisdom. They have been praised for their boldness and questioned for their likely effectiveness.
Continue reading »
Further reading: unstimulating Turkey and winning in Delhi
The FT:
From elsewhere:
Private equity gets rich quick off China investments
It’s not just the Chinese who are making money abroad. Private equity funds are making a tidy sum off of China’s economic boom, a reality most recently illustrated by the Hong Kong listing of China’s largest diary farmer, China Modern Diary, which listed late last month, writes the FT’s Henny Sender. The listing valued the company at HK$2.89 per share, a value worth 3.3 times more than what KKR, the US private equity firm, put into it two years ago.
An estimated $50bn has been raised for Chinese companies by international and local companies, a large part of which has been invested over the last three years. Favoured sectors include financials, auto rental and travel – all of which focus on China’s booming consumption story. KKR on Thursday said it planned to invest in VATS, the biggest liquor chain on the mainland, and another flourishing market. But good deals are still hard to find and the competition is heating up. Read more here.
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