Daily Archives: January 27, 2011

Venezuela’s private currency war

January 27, 2011 10:00 pm by Benedict Mander

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So many things about Venezuela are unusual – not least its currency. As a ruthless currency war is waged, with well-managed economies all over the world taking steps to weaken their currencies because of excessive capital inflows, Venezuela is weakening its currency for very different reasons – in fact, it is actually suffering from excessive capital flight.

Venezuela’s hugely overvalued currency, the bolívar, needs weakening for several reasons, not least so that the government can save more dollars from oil exports. After a devaluation only a month ago, it now looks as though another hidden devaluation may be coming, with the inauguration of a new “socialist” securities exchange, supposed to take place next week. Continue reading »

Americas markets wrap: Bovespa slips on central bank inflation fight

January 27, 2011 9:41 pm by Shannon Bond

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Latin American markets fell Thursday as Brazil’s central bank signaled broad action to contain inflation.

In Brazil, the Bovespa index gave up nearly 1 per cent and the real slumped against the dollar after minutes from the latest central bank meeting hinted at further rate hikes. Among stocks, retailers and homebuilders were hardest hit, with Lojas Americanas, the retail chain, and PDG Realty, the real estate group, both slipping. Continue reading »

Posted in Global, LatAm | Permalink

Food prices soar as EMs stockpile

January 27, 2011 8:40 pm by beyondbrics

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Food prices are soaring once again, spurred by emerging countries stockpiling staples like wheat and sugar in a bid to calm their panicking populations. The FT’s Javier Blas and Chris Giles report:

Earlier this week, Algeria bought 800,000 tonnes of wheat – much more than usual – and Saudi Arabia announced plans to double the size of its wheat stockpile.

Tags: commodities, food & drink Posted in Global | Permalink

Malaysia holds rates again

January 27, 2011 7:15 pm by Ranjit Lall

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For once, Malaysia’s central bank has done what everyone expected it to do. The Bank Negara Malaysia – which surprised the international community by hiking interest rates as early as March 2010 – has maintained its benchmark overnight policy rate at 2.75 per cent.

Unlike most other central banks in the region, the Bank Negara has chosen to support growth rather than rein in inflation, which reached 2.2 per cent in December 2010 – the lowest rate in Asia after Japan and Taiwan. Continue reading »

Tags: monetary policy Posted in Malaysia | Permalink

CEE markets wrap: stocks rise on Fed decision

January 27, 2011 6:41 pm by Ranjit Lall

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Central and eastern European stocks mostly rose on Thursday, as relief about the US Federal Reserve’s decision to maintain the size of its asset purchase programme outweighed concerns about Japan’s fiscal position after the country was downgraded by Standard and Poor’s.

“Markets were very happy the Fed announced it will keep buying Treasuries,” said Michael Koehler, head of strategy at Landesbank Baden-Wuerttemberg in Mainz. “Japan’s downgrade confirms once again that we haven’t solved the sovereign-debt issue.” Continue reading »

Posted in Europe, Global | Permalink

Dubai World: the dead weight of debt

January 27, 2011 5:30 pm by Simeon Kerr

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Nakheel has been forced to call a press conference to persuade the world that the troubled developer’s World Development, an artificial archipelago of 300 islands off Dubai’s coast, was not sinking.

But Wednesday’s technical press conference and boat tour – no cameras allowed! – did little to take attention away from a flurry of media coverage over the Dubai World Tribunal, where Nakheel’s parent is working out its $25bn debt restructuring. Continue reading »

Tags: debt, property Posted in United Arab Emirates | Permalink

Egypt: bye-bye to the carry trade?

January 27, 2011 4:58 pm by Barney Jopson

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Egypt has been a locus of that enduring emerging market passion, the carry trade, and that’s why the unfolding political crisis matters to so many foreign investors.

They have used dollars borrowed at ultra-low interest rates to buy higher yielding debt in emerging markets. In Egypt’s case, the central bank’s benchmark interest rate is an alluring 9.75 per cent. But street protests against the rule of Hosni Mubarak are putting the carry trade in jeopardy. Continue reading »

Tags: currencies Posted in Egypt | Permalink

Mongolia: the pink house of equities

January 27, 2011 4:06 pm by Leslie Hook

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The world’s best-performing stock market last year was, of course, in an emerging economy. But rather than a steel-and-glass tower rising above a heaving megalopolis, it was in a cheerful pink former children’s cinema in Ulan Bator.

This is the Mongolian Stock Exchange, where share prices climbed 121 per cent in local currency terms in 2010 – more than any other market tracked by beyondbrics – and have jumped another 50 per cent this year. Continue reading »

Tags: equities, stock exchanges Posted in Mongolia | Permalink

Egypt market reopens, shares fall again

January 27, 2011 3:20 pm by beyondbrics

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Updated at 1520 London time with closing prices.

Would everybody please calm down? That was what the Egyptian authorities seemed to be saying when they suspended share trading to let the spooked market compose itself. But the answer has come back: No.

Shares plunged further as soon as the Cairo stock exchange reopened late on Thursday morning, and the EGX30 index eventually closed down 10.52 per cent at 5,646.50. They were down 6.2 per cent before the suspension and had fallen by 6 per cent on Wednesday too, reacting to audacious street protests against president Hosni Mubarak. Continue reading »

Tags: Arab politics, equities Posted in Egypt | Permalink

Russia: no more insider trading?

January 27, 2011 1:30 pm by Isabel Gorst

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The unknown traders that hoovered up shares in Wimm-Bill-Dann days before PepsiCo bought Russia’s biggest dairy producer last December did not escape the beady eye of US regulators.

According to a complaint filed by the Securities and Exchange Commission, they wrongfully used insider information to bag millions of dollars of profits as WBD’s US-listed stocks soared once the PepsiCo deal was announced.

Russian regulators continue to deny the SEC’s allegations even as they prepared to clamp down on insider trading on Thursday said to be rife in Russian markets. Continue reading »

Posted in Russia | Permalink

Japan downgraded, China vindicated

January 27, 2011 1:14 pm by Josh Noble

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Japan’s downgrade from S&P came as a bit of a shock to some in the market. The yen, and the euro, both dropped on the news. But there were some who saw it all coming: the good folks at Dagong, China’s ratings agency.

That’s right, for all the smiles that Dagong first drew when it released its views on 50 country’s sovereign debt – it is starting to look ahead of the game. Continue reading »

Posted in China | Permalink

Russia: is Fridman raising the stakes?

January 27, 2011 12:42 pm by Stefan Wagstyl

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Russian oligarch Mikhail Fridman is throwing caution to the wind. He and his Russian partners in TNK-BP questioned the BP-Rosneft deal as soon as it was announced last week.

Now they are seeking an injunction blocking an agreement that has the personal backing of prime minister Vladimir Putin. And as if this wasn’t enough, Fridman is complaining loudly about his exclusion from the privatisation of the Bank of Moscow and riding roughshod over Telenor, his partner in the Vimpelcom telecoms group. Continue reading »

Posted in Russia | Permalink

Asia markets wrap: stocks rise on US data

January 27, 2011 12:19 pm by Ranjit Lall

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Asian stocks rose on Thursday as the US Federal Reserve pledged to maintain the size of its asset purchase programme and new home sales in the US beat expectations.

“The sense of recovery in the U.S. and China keeps on going,” said Mitsushige Akino at Ichiyoshi Investment Management in Tokyo. “Surplus money is flowing not only into commodity, but also stock markets.” Continue reading »

Posted in Asia, Global | Permalink

New York headlines

January 27, 2011 12:03 pm by beyondbrics

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Street protests set Egypt’s stocks tumbling

Family squabbles top Asia corporate agenda

Garuda listing priced at low end of range

TNK-BP investors reassured on Rosneft

China Boosts Loan Down Payments, Seeks Property Price Targets Continue reading »

Posted in Global | Permalink

[snap] NEC and Lenovo link up

January 27, 2011 11:58 am by Alexandra Stevenson

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As beyondbrics has reported, a growing number of Japanese companies are partnering up with Chinese ones. A tie-up between NEC and China’s Lenovo, announced on Thursday, is likely to be good news for the Japanese company which reported major losses ( $323m) in its most recent quarterly report.

Bloomberg reports that under the deal Lenovo will give NEC 281.1 million new Lenovo shares, an estimated $175 million in value, for a 51 per cent stake in the company. The joint venture is expected to create the biggest personal computer business in Japan. NEC has one-fifth of the Japenese PC markets and Lenovo has 5 per cent.

Posted in China | Permalink

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beyondbrics

Daily Archives: January 27, 2011

Venezuela’s private currency war

Americas markets wrap: Bovespa slips on central bank inflation fight

Food prices soar as EMs stockpile

Malaysia holds rates again

CEE markets wrap: stocks rise on Fed decision

Dubai World: the dead weight of debt

Egypt: bye-bye to the carry trade?

Mongolia: the pink house of equities

Egypt market reopens, shares fall again

Russia: no more insider trading?

Japan downgraded, China vindicated

Russia: is Fridman raising the stakes?

Asia markets wrap: stocks rise on US data

New York headlines

[snap] NEC and Lenovo link up

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