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Daily Archives: Jan 26, 2011
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.
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.
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.
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.
“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.”
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.
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.
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.
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.
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.
“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.”