Daily Archives: February 18, 2011

View of a state-owned PDVSA gas stationPetrol in Venezuela might just be the cheapest in the world. You get change from a five bolívar note (a bit more than a dollar at the overvalued official exchange rate) when filling up a tank. People often even tip the person filling the tank more than they actually pay for the petrol itself as they can’t be bothered to wait for the change.

Be that as it may, the government vehemently denies that it is considering raising the price of petrol, despite a recent flurry of speculation that it might, following musings by Hugo Chávez that Venezuela needs to cut domestic fuel consumption during the latest instalment of his Sunday television show. Continue reading »

Bovespa stock chartLatin American markets rose on Friday, with the Bovespa finishing its strongest week in six months as traders tamed inflation expectations.

Brazil’s benchmark exchange gained 0.6 per cent Friday, capping off a 3.5 per cent rise for the week, the most since July. Homebuilders gained on reduced inflation expectations, with MRV Engenharia surging 4.5 per cent, while Brasil Foods rose 3.3 per cent on a report that billionaire Warren Buffett’s Berkshire Hathaway took a stake in the poultry producer. Continue reading »

Citgo station in Chicago, IllinoisIt’s no secret that Hugo Chávez doesn’t see eye to eye with the “Yankee imperialists” up north. His government expressed characteristic disdain yesterday at Republican Senator Connie Mack’s recent request that a Cuba-style embargo be slapped on Venezuela, and that it be included in the list of “state sponsors of terrorism”.

Today it railed against the US State Department’s request for Venezuela to allow the Organization of American States to visit hunger striking students seeking the release of two political prisoners. But Venezuela’s socialist president often likes to point out that he has nothing against the average US citizen. Continue reading »

Indian mobile phoneBy Girija Shivakumar in New Delhi

India’s public relations industry has drawn unwelcome publicity in the country’s multi-layered telecommunications scandal, with one of PR’s leading lights having her home and office raided by the Criminal Bureau of Investigation.

But industry executives are putting a brave face on events, arguing that a modern India needs modern PR and drawing comfort from the rapid growth of a sector that could see annual revenues next year exceed $10bn. Continue reading »

With billions of dollars flowing out of emerging market equity funds since the start of the year, it’s something of a surprise that currencies – which tend to be highly sensitive to capital flows – have remained so stable.

What’s behind this puzzling trend? Most analysts agree on three factors: the resilience of bond flows into emerging markets, aggressive intervention in currency markets by central banks, and positive investor sentiment towards the emerging world. Continue reading »

It sounds like Argentine economic activity data, out later on Friday, will be music to the government’s ears. Forget inflation, forget any other economic concerns – as the government often appears to do. As long as the economy keeps on growing strongly, all is right with the world.

So if the economic activity index posts a 9.1 per cent year-on-year rise in December, as the market is forecasting, the government should be delighted. It has just announced it is restricting imports of some goods, including luxury cars, autoparts and computers, ostensibly to give local industry an extra boost. Continue reading »

Central and eastern European stocks were relatively flat on Friday, following China’s decision to raise reserve requirement ratios for banks earlier in the day.

“This is just the start from China and they will continue tightening lending and raising interest rates,” said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets. “If the Chinese start to take out the liquidity that’s been so important, it’s got the potential to be a disturbance for the world’s stock markets.” Continue reading »

Predictable can be good.

Chile’s central bank has given clear pointers that it will go on raising interest rates after Thursday night’s well-flagged quarter-point hike in its policy rate, to 3.5 per cent a year. Faced with an appreciating peso and rising inflation, the bank has faced the challenge head on – instead of ducking it, like they do in next-door Argentina. Only the timing of further hikes is uncertain, as they depend on the performance of the domestic and international economies.

Continue reading »

Do investors in Brazil trust the government or not? If you look at fund flows, the answer is No. Investors took $1.48bn from Brazilian equity funds in the week to Wednesday and nearly $34m from Brazilian bond funds, according to EPFR, the fund tracker.

But look at interest rate futures in São Paulo and it’s a different story. Over the past few days they have fallen, suggesting the government has won some credibility for its promises to get tough on fiscal policy. Continue reading »

The British prime minister has intervened in a bid to break the deadlock threatening Cairn Energy’s $9.6bn sale of its stake in Indian oilfields, a deal that is becoming a test of India’s receptiveness to foreign investment.

The FT is reporting that David Cameron, the prime minister, wrote a letter earlier this week to Manmohan Singh, his Indian counterpart, emphasising the importance of the deal to British investment in India and appealing to Singh to see that Cairn’s sale of the oilfields to Vedanta is given the go-ahead as soon as possible Continue reading »

Slovene government officials are no doubt right now poring through the OECD economic report on the Alpine country, released on Friday. Most of its 136 pages will not be comfortable reading.

Although they can still boast that the country has the highest output per capita of all the former Socialist countries, that boast has sounded hollow since the global crisis hit; output contracted by 8 per cent in 2009, and formerly smug smiles turned to frowns. Continue reading »

In this week’s readers’ Q&A session, Alexander Medvedev, deputy chief executive of Gazprom, answers your questions.

In this second post, he answers questions on support from Vladimir Putin, the likelihood of a deal between South Stream and Nabucco and future Russian gas demand. Earlier, he discussed changes to gas pricing, how reliable a partner his company is for EU countries and how Gazprom will respond to the shale gas boom. Continue reading »

The Bahrain government has spent millions of dollars promoting itself as “Business Friendly Bahrain” lately. “Bullet-friendly Bahrain” more like, goes the grim joke now.

After a bloody clampdown on a peaceful Egyptian-style protest calling for more democracy, opposition members now fear that the violence, rising sectarian tension and challenges to the ruling family will translate into an erosion of the country’s business standing. Continue reading »

Emerging market equities strongly outperformed those in developed markets during the second half of 2010 but as the chart shows after the break, the world has turned upside down since January.

According to fund tracker EPFR Global, investors withdrew a net $5.44bn from EM equity funds during the week to Wednesday. Since mid-January, a whopping $18.5bn has flowed from EM funds to DM funds, most of it going to US equities. So is the EM love affair over? Continue reading »

Asian stocks had mixed fortunes on Friday, as stronger than expected growth in Taiwan was offset by renewed fears about tightening measures in China after the People’s Bank raised reserve requirements for the second time this year.

Shanghai and Mumbai suffered sharp losses, while indices elsewhere gained. Continue reading »

Global equities macromap

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12.4% Fall in Mail.Ru shares on Monday, on the back of its Facebook stake.

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