Daily Archives: January 28, 2011

Latin American stocks fell sharply on Friday as investors fled risky assets amid fears that violent political turmoil in Egypt may spark similar unrest elsewhere in the Middle East, leading to higher oil prices that could hurt global growth. Investors were also concerned about inflation in Brazil and Chile. Continue reading »

Its strength in bygone days became its weakness. So much so, that the English-speaking Caribbean’s economy was actually worse hit by the global financial crisis than its very epicentre in the US. It will take years to recover.

For that reason, the Caribbean should diversify its economies away from its traditional dependency on the US, and the UK, and foster links with countries that are driving the global recovery like China, India and Brazil – that’s the conclusion drawn from recent research presented by the World Bank.

Continue reading »

The latest figures for fund flows, show a dramatic swing out of emerging markets into developed markets. While one week doesn’t change the world, it’s clear that fund managers are taking notice of all the talk of inflation in EMs and political unrest, combined with signs of growth in the US.

In the week to Wednesday, investors withdrew a net $3,054 million from the emerging market assets, according to EPFR, the fund flow experts. That’s the first weekly net redemption since last May and the first big drop since February last year. Continue reading »

Hosni Mubarak, Egypt’s president, announced earlier today on the country’s state television reports that a curfew would be extended to all cities across the country. The curfew began at 6pm local time and will remain in place until 7am tomorrow morning.

This comes after a fourth day of protests calling for the president to step down, the FT reports. The army has been brought in to help police contain riots.

Meanwhile, Steven Chu, US secretary of energy said the US is watching “very closely” for any distruptions in oil supply, Bloomberg reports. He told reporters:

Any disruptions in the Middle East means a partial disruption of the oil we import… More importantly, any serious disruptions in the Middle East will mean that, even though we don’t get a lot of our oil, it’s a world market and that could actually bring real harm. Continue reading »

Portugal Telecom has finalised its R$8.32bn ($5bn) purchase of a stake in Brazil’s largest telecoms group this week with a view to make Brazil a permanent base for the next 500 years, according to its chief executive.

But given that it is only getting a 22.4 per cent stake of Oi it remains to be seen how firm a platform the acquisition will be for PT’s Brazil activities.

Continue reading »

Turkey led falls for central and eastern European stocks on Friday, as strong growth in the United States in the fourth quarter of 2010 failed to ease concerns about political instability in Egpyt. CEE currencies dropped sharply against the dollar.

“There is no doubt the market tone is changing,” said Philippe Gijsels, the Brussels-based head of research at BNP Paribas Fortis Global Markets. “A lot of good news is already in the price. There’s room for disappointment.” Continue reading »

Turkish efforts to curb lending growth are starting to bite. At the start of this week, the central bank took its stiffest measures yet to slow the rate of credit expansion, raising the ratio of bank reserves to liabilities by as much as 400 basis points for short term deposits, aiming to withdraw TL9.8bn (US$6.1bn) from the market.

The central bank has now increased reserve ratios on lira deposits of all maturities by an average 370bps since December and withdrawn some TL18bn ($11.2bn) of liquidity. Continue reading »

The Hungarian forint hit a new high for this year of Ft 271.20 to the euro on Friday, before easing slightly to Ft271.90. It has now been pretty stable since its post-crisis recovery in early 2009, trading in a range of roughly 265-285.

Concerns about Hungary’s financial issues – chiefly its big public debt – aren’t over. But are investors right to be less worried than a few months ago? Continue reading »

Egyptian security forces have used rubber bullets, tear gas and water cannon in running battles with tens of thousands of anti-government demonstrators demanding that Hosni Mubarak, the president, step down, ft.com reports.

The demonstrations, the fourth consecutive day of protests in Egypt, started after Muslim Friday prayers. The most serious clashes took place in the capital Cairo, but people also took to the streets in towns across the country. In Suez, protesters were reported to have overtaken two police stations.

State television announced a curfew would be imposed in Cairo, Alexandria and Suez from 6.00 pm local time. It said the army was being drafted to help the police.

Hong Kong’s Exchange Fund has caught the Brics-and-beyond fever. The world’s 8th largest foreign-exchange reserves fund with assets totalling HK$2,345.7bn (US$300.7bn) has announced plans to diversify its holdings in 2011 by buying emerging market bonds and equities.

But central banks needn’t be too worried about another source of hot money, because the fund is likely to focus its investments on China. Continue reading »

Poland has clocked in a 3.8 per cent growth rate in 2010, one of the highest in the European Union, according to the country’s statistical agency.

The higher-than-expected result was due in large part to strong domestic demand, with private consumption rising by 3.9 per cent as consumers rushed to buy goods before this year’s scheduled VAT rise. But investment fell by an unexpected 2 per cent, a worrying sign for the country’s future growth prospects. Continue reading »

Egyptian mobile phone user on TwitterIt’s official: the Egyptian authorities have cut off the mobile telephone networks.

Vodafone, the British group which controls one of Egypt’s three mobile operators, said on Friday that the Egyptian authorities had ordered all mobile operators to suspend services in selected areas of the country.

The move highlights the risks of doing business when political turmoil strikes. But it should be seen in context – whatever happens in politics, Egyptians will still want to use their phones. Continue reading »

Asian stocks for the first time in a week fell on Friday, after commodity price declines and Thursday’s downgrade of Japan by Standard & Poor’s. Egyptian bond yields, however, soared to an all-time high.

“I would tend to see it as an overreaction because it’s very hard to see Japan running into anything like the troubles various European countries have run into,” said Shane Oliver, head of investment strategy in Sydney at AMP Capital. “Monetary tightening to combat inflation is weighing on Asian shares and making them relatively more vulnerable.” Continue reading »

* Egypt cuts internet to disrupt protests

* Brazil’s Tombini to get tough on inflation

* Shipping braced as key group struggles

* Home Depot leaves Beijing

* Prada’s sights set on Hong Kong listing Continue reading »

Welcome to Burma, the most frontier of the frontier markets.

The Burmese junta has passed a Special Economic Zone Law designed to attract more foreign investment, but this being Burma, it is still not clear exactly what the law says. What is clear is that the authorities are keen to overhaul the country’s moribund economy by attracting foreign investment. Continue reading »

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