Americas markets wrap: Brazil growth outlook cheers investors
Latin American stocks gained Monday as investors were cheered by the outlook for US corporate earnings and by a forecast for higher growth in Brazil.
Brazilian investors shook off concerns over higher inflation and focused on an upbeat growth forecast, boosting the Bovespa index for the first time in four days. Homebuilders and banks gained, outweighing losses by oil group OGX, which slumped as crude prices fell. Continue reading »
EM capital flows: $1,000bn and more?
It’s no secret that as the developed world has struggled through the financial crisis, emerging markets have become ever more attractive to investors keen on the prospect of high returns, positive growth and acceptable perceived risks.
A new forecast from the Institute of International Finance paints a clear picture of this trend, estimating that private capital flows to emerging economies surged to $910bn in 2010 from about $600bn in 2009. What’s more, the IIF predicts that number to grow to $960bn this year – and to hit a whopping $1,000bn in 2012. Continue reading »
Emerging Europe will to continue its medium-paced recovery in 2011, growing at a respectable but – by the standards of other emerging markets – unspectacular 4 per cent, according to a report released by the European Bank for Reconstruction and Development on Monday.
While this is in line with earlier forecasts, the EBRD emphasizes that “downside risks” have sharply increased in recent months. Rising inflation in advanced economies, the ongoing eurozone sovereign debt crisis and domestic policies that aren’t friendly to investors all threaten to derail the region’s recovery over the next year. Continue reading »
Poland: 2012 football dreams crumble; so do the roads
The hard realities of economic crises have a way of puncturing dreams. Just ask Poland’s politicians.
When the country won the right to co-host next year’s European football championships with Ukraine, it inspired feverish hopes of a civilisational leap forward. But with 500 days to go before the kick-off at Warsaw’s new national stadium – where the mascot pictured will be on show – Poland’s premier Donald Tusk has had to shelve those flighty thoughts. Continue reading »
CEE markets wrap: Moscow plunges after attack
Russian stocks fell sharply on Monday after a terrorist bombing at Moscow’s Domodedovo airport killed at least 35 people. Most other equities also fell, although CEE currencies rose against the dollar.
“Immediately we saw domestic and international investors hedge Russia futures in shock from news of the bombing,” said Luis Saenz, London-based director of international sales at brokerage Otkritie Securities. Continue reading »
Russia: dealing with terrorism
Russia’s financial markets were shaken by the suicide bomb at Domodedovo airport on Monday, with equities falling 2.4 per cent as the news sunk in of 35 people dead and more than 100 injured.
But shares quickly recovered some ground as investors rightly judged that the atrocity would not destabilise either the Putin/Medvedev administration or the economy.
Since Vladimir Putin first took office as president in 2000, Russia has shown that it can take such shocks in its stride. But, the blast does revive doubts about Putin’s ability to transform Russia into the healthy modern society that many Russians crave – and that he has promised to deliver. Continue reading »
Thai telecoms: wires crossed
It has been an embarrassment to Thailand that its neighbours Cambodia and Laos – which are less developed in other ways – have raced ahead by licensing third generation mobile networks. But Thailand’s chaotic attempts to cobble together a 3G network of its own seem to be yielding little more than further confusion.
In the latest setback, TOT, a state-owned corporation with quasi-regulatory powers, has put off an auction to decide who will build its 3G network after two bidders said they were wrongly disqualified and would sue if it went ahead later this week as scheduled. Continue reading »
[update] 31 reported dead, 130 injured in Moscow airport suicide bomb blast
A suicide bomber detonated in the international baggage claim area of Moscow’s Domodedovo Airport, Russia’s largest, killing at least 31 people, reports Bloomberg.
About 130 more people were wounded in the attack, which occurred at about 4:32 p.m. local time, said Health Ministry spokeswoman Sofya Malyavina. The blast was equivalent to 7 kilograms of TNT (15 pounds), Interfax reported, citing an unidentified law enforcement official. Continue reading »
The riddle of Hungarian rates
Hungary’s central bank has raised interest rates for a third month in succession, a move most analysts had anticipated.
Following Poland’s rate hike last week, the casual observer might assume that the Magyar Nemzeti Bank’s decision to lift the base rate by 25 basis points to 6 per cent reflects similar concerns about rising inflation in central Europe. Continue reading »
[snap] Hungary hikes rates, again
Hungary’s central bank has just lifted its key interest rate by a quarter percentage point to 6 per cent, its third increase in three months. The rise had been forecast by a majority of analysts and signals the National Bank of Hungary’s strengthening resolve to keep price rises under control. Continue reading »
Sinopec’s Harmonious New Year party
Many things might spring to mind when you think of Sinopec, the Chinese oil giant: multi billion dollar investments in Argentina or Brazil, their massive refining capacity (4.48 million barrels of oil per day), or even their recent $5bn pipeline deal in Canada.
But a different side of company life was on display at Sinopec’s Chinese New Year party on Monday, which featured colorful song and dance routines (performed by employees), comedy skits, gasoline handouts for journalists and a documentary about Sinopec workers abroad. Continue reading »
Garuda: flying too high
Garuda – Indonesia’s soon-to-be-listed flag carrier – looks to be flying into a tempest. Airline stocks fell across Asia on Monday, a day ahead of Garuda’s IPO pricing, with AirAsia falling over 4 per cent, and Cebu Pacific dropping almost 2 per cent.
At a time when investors seem to be abandoning the once red hot markets of southeast Asia, Garuda’s listing is beginning to look like a hard sell. Continue reading »
Incentive realignment continues at the Central Bank of Turkey. Reserve requirements have been raised as signalled last week – though by more than many will have been expecting. Continue reading »
Asia markets wrap: Thailand plummets on protest fears
Thai stocks plummeted on Monday on fears that a “red shirt” anti-government rally on Sunday could be the start of renewed political instability. Most other Asian markets fell more modestly, with strong corporate earnings offset by continued concerns over inflation in China.
“Sentiment for the Asean stocks has been quite bearish on inflation and rate hike concerns,” said Masahiko Ejiri at Mizuho Asset Management in Japan. “Amid already weak sentiment you have a story about a political rally in Thailand. That doesn’t help stocks at all.” Continue reading »
In defence of Chinese inflation statistics
Many people in China and abroad view the country’s official inflation statistics with deep suspicion, arguing that real price rises are much greater than indicated by the government’s published consumer price index.
But a comparison with The Economist magazine’s famous Big Mac Index provides proof that official Chinese inflation is actually pretty accurate, according to UBS economist Jonathan Anderson. Continue reading »
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