Americas markets wrap: Brazil stocks fall on inflation worries
Latin American stocks slipped on Monday as investors, wary over eurozone debt, sought havens. Brazil’s benchmark Bovespa index fell a per cent after a central bank survey showed economists raised their expectations for inflation over the next year.
Homebuilders and financial companies declined, and beef producer JBS was lower on reports its talks with US food group Sara Lee had stalled over a price disagreement. Continue reading »
South Africa’s Sasol looks overseas for shale gas
Sasol, the world’s largest producer of motor fuels from coal, dates to the South African apartheid regime’s efforts to promote national self-sufficiency – using technology pioneered by Nazi Germany. Since South Africa was welcomed back into the global community, however, Sasol has increasingly looked to take advantage of opportunities overseas – most recently, through a $1.03bn move into the Canadian shale gas sphere.
Under the terms of a deal announced on Monday, Sasol will take a 50 per cent stake in a 51,000-acre shale gas field in British Columbia owned by Talisman Energy, paying $255m cash and 75 per cent of development costs up to $776m. Continue reading »
CEE markets wrap: stocks steady; Hungarian forint down after rate hike
Central and eastern European stocks were mixed on Monday, in spite of the continuing rally in western Europe. Shares in Uralkali edged down, and those in Silvinit plummeted 13 per cent, after plans were announced to merge the Russian fertiliser-makers, in a move that would create the world’s largest potash company by current production. Hungary’s forint fell 2 per cent against the dollar, after the central bank raised interest rates for a second successive month. The rate rise is likely to exacerbate tensions between the bank and the government. Continue reading »
Hungary: rates raised again
By Barney Jopson and Stefan Wagstyl
Hungary’s central bank has just lifted its main interest rate for a second consecutive month in order to combat rising inflation, a move that deepened a policy conflict with the country’s prime minister and weakened the Hungarian currency.
Viktor Orban, the prime minister (pictured), has called for lower rates to protect growth, but that did not stop the Magyar Nemzeti Bank from raising its benchmark two-week interest rate to 5.75 percent from 5.5 percent on Monday. The move, which was forecast by fewer than half of analysts surveyed, followed a surprise increase last month – the first since 2008. Continue reading »
Chart of the week: FDI comes back, especially in Latin America
By Valentina Romei and Henry Mance
If economic policy-makers were to organise an end-of-year pantomime, the perfect villain would be hot money. You could fill a theatre with prime ministers and central bankers ready to jeer its every appearance.
Who, then, would be the hero of the show? Quite possibly foreign direct investment, which represents the majority of flows to emerging markets, and is widely seen as productive and reliable. Because FDI generally comes from companies with longer-term horizons than fund managers, and because it goes into solid assets like factories, it is less likely to be withdrawn in a crisis. However, as our chart of the week (below the page break) shows, FDI in emerging markets did drop sharply in 2009 – and even a rebound predicted for this year will still leave it below 2007-8 levels. Continue reading »
“Mark Zuckerberg” and “vacation” aren’t phrases that most people would normally associate with each other.
The Facebook founder is known for working long hours: a two-month “lockdown” over the summer kept developers in the office for extended periods while new products – such as Mail – were created. Continue reading »
Dhaka’s stock exchange: embers
The Dhaka Stock Exchange had a roaring rally for much of this year, rising more than 90 per cent at its peak, fuelled by easy liquidity and a flood of new investors, with little experience – or expectation – of an equity market’s volatility.
But now Bangladeshi regulators must try to deal with a seriously overvalued market – the market is currently trading at price-to-earnings ratios of around 26 to 27 – and investors with no tolerance for any downward correction. Continue reading »
Vietnamese banking lures Temasek
Temasek, the Singaporean sovereign wealth fund, is paying around $46m for a 15-per-cent stake in Mekong Development Bank, a small Vietnamese lender.
That makes it the latest foreign investor to see promise in Vietnam’s underdeveloped banking sector: although the country reached middle-income status this year, only one-fifth of its 87 million people have bank accounts, and few have ever taken out a mortgage or credit card. Roughly 80 per cent of Temasek’s assets are now in Asia, as it seeks to shift its focus eastwards in search of higher returns. Continue reading »
New York headlines
* North Korea says won’t react to South drill
* VimpelCom faces Sawiris deal hurdle
* Medvedev visits India chasing weapons, nuclear deals
* Mexican pipeline blast kills at least 27
* China signs $35bn in deals with Pakistan Continue reading »
Asia markets wrap: Korean tension dampens stocks; Hero Honda surges 18%
Increased tension on the Korean peninsula weakened Asian shares on Monday, with the Shanghai Composite losing over 1 per cen. The South Korean Kospi remained relatively resilient after its recent rally.
Elsewhere, Goldman Sachs’ Jim O’Neill expressed doubts over bond funds denominated in renminibi. Such funds “will turn out to be a by-product of low US rates rather than sustainable investment themes,” O’Neill told the FT. Continue reading »
Chinese train driver manual – in English?
China’s railway ministry boasts that the country’s rapidly multiplying, state-of-the-art high speed trains are now completely homegrown, having been created by armies of Chinese engineers.
But, it now seems the engineers who have come up with all this authentic intellectual property are even smarter than the ministry would have us believe. After designing and building the new high-speed trains proliferating across the country they apparently decided to write the instruction manuals for train drivers in English, instead of their native Chinese. Continue reading »
Russia: Uralkali launches Silvinit bid
Russian oligarch Suleiman Kerimov on Monday announced details of his widely-anticipated plans to create the world’s second largest potash producer by merging the two big Russian companies he controls, Uralkali and Silvinit, into a $24bn capitalisation group.
The combined entity, which will produce 11m tonnes of potash annually compared to 12m for Canada’s Potash Corp will be formed by Uralkali taking over Silvinit for around $8bn in cash and shares. With the Kremlin already onside, it is unlikely that the deal will run into the political hurdles that eventually forced international miner BHP last month to abandon its bid for Potash. Continue reading »
China: €1bn Dutch bid gets serious
Last month a little-known Chinese company came out of the woodwork to make a Dutch cable making company Draka an offer that Draka could scarcely believe. Xinmao, a Tianjin-based investment company with a market value of €400m, was offering an all-cash takeover offer of €1bn, outbidding Prysmian, an Italian cable company who had nearly sealed a deal for €833m in cash and shares.
On Monday Xinmao declared that its intentions were serious, announcing that it would go through with the bid and pursue talks with Draka’s management and supervisory boards. The market, much like the Draka’s management, isn’t quite sure how to take the small Chinese company’s persistence. Continue reading »
Further reading: Chavez conquers the internet, Hu sings Moscow Nights
From the FT:
The Shanghai stock market fell 3 per cent on Monday before recovering slightly and closing down 1.4 per cent, amid fears of everything from year-end cash shortages, an interest rate hike and the risk of war on the Korean pensinsula.
The nervousness also hit Shenzhen, where shares ended 1.2 per cent lower, but not Seoul or Hong Kong, where stocks slipped only 0.3 per cent on both markets. So, while investors across the region are watching closely developments in North and South Korea, most are taking the latest tensions in their stride. Continue reading »
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