Eighty per cent of the world’s consumers live in emerging markets, creating a huge pool of customers for all those companies looking to sell goods and services. That’s why most fund managers bet on consumer groups last year – and were repaid handsomely as domestic demand soared.
Given the success of that strategy, HSBC has stuck its neck out in a note announcing it’s betting on commodities and infrastructure in Brazil over the popular consumption story in 2011. Continue reading »
Perhaps Venezuela’s bankers had just been getting too complacent. Hugo Chávez seemed to be in such a conciliatory mood recently, after all – going as far as to request dialogue and mutual respect from political opponents he usually prefers to call “coup mongers” and “fascists”.
So when Pedro Rodriguez, a senior executive at the local unit of Spain’s BBVA, Banco Provincial, received a telephone call from Venezuela’s erratic president live on television, threatening that he could expropriate his bank “whenever I want,” he may have been somewhat taken aback. Continue reading »
Rising inflation and slowing credit growth weighed on Brazilian homebuilders, retailers and banks, sending the Bovespa one per cent lower on Wednesday as investors worried about rate hikes.
In Mexico, the IPC was slightly higher after the US reported upbeat home sales data, although US house prices fell to the lowest level since June 2009, raising fears that a double dip in the housing market could deal a blow to the economic recovery of Mexico’s biggest trading partner. Continue reading »
Shop around. That’s the blunt advice to consumers from Amado Boudou, Argentina’s economy minister (pictured).
Not because there is a problem with inflation, you understand. Boudou insists that in Argentina, prices are not rising across the board. The problem, he says, is the “wide disparity of prices” for some goods, triggering his advice to “shop around to get the best price”. Continue reading »
To say that investors loved the taste of Monday’s tie-up announcement between Arca and Continental, Mexico’s second- and third-largest Coca-Cola producers, is to understate the case. They gulped it down.
Shares in both companies, which trade on Mexico’s stock exchange, increased more than 12 per cent on the news that the resulting $2.3bn merger would create the second-largest bottler in Latin America after Coca-Cola Femsa, which is also Mexican. To give that some context, the increase happened on the same day that the general stock market index fell 0.5 per cent. Continue reading »
As the Arab world finds itself in flux following protests in Tunisia and now Egypt, Alia Moubayed, senior Middle East economist for Barclays Capital, tells Barney Jopson of beyondbrics that investors face not only growing political risk, but fiscal threats too, as governments consider increasing wages and subsidies.
Dmitry Medvedev, Russia’s president, is using his trip to Davos to tell potential investors that Monday’s bomb attack at the airport where Europeans arrive in Moscow should not deter them from putting money into his country. He also promised no new taxes on the financial sector.
But in his keynote speech he has shown a good measure of Bric solidarity too. He called on the International Monetary Fund to include the currencies of the big four emerging markets – Brazil, Russia, India and China – in the IMF’s basket of main currencies. Continue reading »
Central and eastern European stocks rose on Wednesday on speculation that the Federal Reserve will continue to support the recovery at its policy meeting this week.
“We expect the FOMC statement to acknowledge a general improvement in U.S. economic data since the last meeting,” said David Semmens, a US economist at Standard Chartered Bank in New York. “We anticipate they will complete the $600bn of Treasury bond purchases on account of a benign inflationary environment and high unemployment.” Continue reading »
Poland has plenty of opposition politicians ready to criticise the government. But its fiercest critic right now is an unexpected figure: Leszek Balcerowicz, a former finance minister and central bank governor (pictured). He used to be an ally of premier Donald Tusk, but has unleashed a series of attacks on the government’s economic policies.
His latest salvo came this week, in response to the government’s plan to limit flows to the privatised pension system. Continue reading »
Having suggested last week that the Bric acronym may be losing its purpose, Goldman Sachs is busy promoting a successor, N-11.
Goldman’s N-11 Equity Portfolio is aimed at investing in the 11 countries identified as the next markets worth following after the Brics. But it comes with a twist – it will actually invest only in 10. Number 11 is Iran. Continue reading »
The World Economic Forum in Davos began on Wednesday with leaders from the developed world talking up the global recovery and pinning their hopes on high-growth emerging markets.
But chief executives from the emerging world struck a more cautious tone, warning that inflationary pressures in their home countries were bad for business. Continue reading »
ChelPipe, a steel pipe maker from grimy Chelyabinsk, on Wednesday became the latest Russian group to announce a price range for its London IPO – indicating that it would raise up to $688m.
It follows coking coal producer Koks and pumps manufacturer HMS Hydraulic in setting IPO, becoming the third Russian company set an issue range in as many days and taking this week’s planned fund-raising target to nearly $1.9bn. And there will be more to come, with Russian companies aiming to raise around $20bn or more this year. Continue reading »
By Yue Yang of mergermarket
China’s semiconductor sector has seen a boom in recent years and the acquisition of China-based Si En Integration by Integrated Silicon Solution (ISSI) reflects the increasing enthusiasm of international players to gain a piece of the local pie.
ISSI on Monday announced the $20m cash acquisition so as to strengthen its overall business and presence in China as well as diversify its product portfolio. Continue reading »
Egypt’s financial markets left no doubt about the significance of the daring street protests against the country’s president: stock prices tumbled on Wednesday, the currency weakened, and the cost of insuring against a government bond default rose.
The Egyptian authorities moved to stop events spiralling out of control by banning demonstrations and warning that participants would be detained. But a leading opposition member insisted that further protests were planned. The market reaction underlined profound uncertainty about where all this could lead. Continue reading »
Asian stocks mostly rose on Wednesday, as strong corporate earnings growth across the region more than compensated for declines in international commodity prices.
“Concern about tightening in China looks overdone,” said Yoji Takeda, who helps manage $1.1bn at RBC Investment in Hong Kong. “The economic environment is improving and corporate earnings are growing. That’s good for equities. The introduction of further stimulus measures in the U.S. should help support jobs and the housing sector.” Continue reading »