Latin American stock were mixed on Tuesday, as global markets fell amid concerns about the impact of the earthquake and tsunami in Japan. Brazilian equities fell sharply in early trading, falling 1.7 per cent at one point, but selling eased and the benchmark Bovespa stock index pared losses and closed fractionally down 0.24 per cent to 67,005.
Mexico’s IPC index fell 0.5 per cent to 36,012, however it was the country’s currency which suffered on Tuesday. Continue reading »
Brazil’s nuclear power: no change
Japan has suffered “a disaster of gigantic proportions” but that’s no reason to abandon Brazil’s nuclear plans, according to Edson Lobão, the country’s mines and energy minister (pictured).
Brazil is currently building its third nuclear reactor and plans more over the next few decades as a way of diversifying its energy resources. Continue reading »
Is Chile becoming Latam’s IT hub?
Think of Chile and you probably think of copper, wine, salmon… but IT?
Fuelled by government investment, the IT industry grew 18.5 per cent in revenue terms to $3.5bn in 2010. Though still tiny in overall terms – 1.7 per cent of the total economy – the industry is positioning itself both to lure technology companies to the region and to export IT services like software design, online banking services and digital marketing, especially to the US. Continue reading »
News of Japan’s deteriorating nuclear situation sent reverberations through central and eastern Europe on Tuesday as markets followed Asia’s lead, marking heavy losses.
Nigel Rendell, senior emerging markets strategist at RBC, told beyondbrics CEE markets fell by default rather than by design. “Losses were not directly related to Japan, but more indirectly through sentiment,” Rendell said. Continue reading »
Chart of the week: Japan & EM exports
Few businesses in Japan have yet had time to think about the longer-term consequences of last Friday’s disaster. But many emerging market exporters will already be worried about its impact on trade flows.
This week’s beyondbrics chart (after the break) shows the world’s biggest exporters to Japan and the relative importance of the Japanese markets to their overall export earnings.
Cash-strapped Pakistan buys submarines
Pakistan’s decision this week to begin negotiations with China to buy six submarines coincided with confirmation of figures showing that foreign direct investment is down 21 per cent to just $1bn in the first eight months of the financial year ending in June.
Clearly, worsening economic realities have been ignored by ruling politicians and powerful generals who seem convinced that the threat to Pakistan’s shipping lanes is greater than the multiple economic, social and political challenges faced on land. Continue reading »
Indian inflation: know your onions
By Valentina Romei and Jonathan Wheatley
Indian inflation reached an annual rate of 8.31 per cent in Febuary – a small rise rather than the sharp slowdown many economists had expected in the benchmark wholesale price index.
Look into the detail, and the picture is even more worrying. Food, long seen as the main driver of inflation, now plays a much smaller role, as our chart shows (below the break). Prices are rising right across the economy, adding to pressure on the central bank to raise its policy interest rate at its monetary policy review meeting on Thursday – if it comes, the eighth hike since March 2010. Continue reading »
Guest post: Gulf provides wrong kind of support for Bahrain
By Roula Khalaf
The Gulf Co-operation Council has suddenly found a voice. As uprisings have swept several Middle Eastern countries (including some GCC members) the rulers of the Arab Gulf states have been gripped by an unusual urge to action, part laudable, part questionable.
In a remarkable outburst against a fellow Arab leader, GCC foreign ministers last week declared that Muammer Gaddafi’s regime had become illegitimate after using live bullets and heavy weapons against Libya’s population. They called on the Arab League to “shoulder its responsibilities in taking necessary measures to stop the bloodshed”. Continue reading »
Russia: quake boosts used car prices
Most of Russia has felt little impact from Japan’s devastating earthquake, with the exception of one unexpected sector in one faraway place: second-hand cars on the Pacific coast.
Used-car prices in the port of Vladivostok, a hub for the Japanese second-hand auto trade, have surged by more than 10 per cent since the tsunami struck Japan last weekend. Seeing the damage on their televisions and fearing supply disruptions, Russian drivers are rushing to buy Japanese autos before they run out. Continue reading »
India’s corruption: worse for business
From the outside, India’s business environment is looking increasingly riddled with corruption. So too, it seems, from the inside. A majority of multinational and Indian executives surveyed in a new report from KPMG believe corruption negatively impacts their business, as well as India’s economic growth prospects.
The report comes as India is poised to see another record year for mergers and acquisitions, and as dealmakers say global M&A will be driven by deals in India and China this year. Continue reading »
The financial impact of Japan’s earthquake/nuclear disaster from Tokyo to other Asian markets on Tuesday, with equities falling fast, although currencies held their ground.
The grim news from east Asia gave investors little time to focus on the turmoil in the middle east where Bahrain imposed a state of emergency while fighting continued in Libya. Continue reading »
SocGen: invest in EM via VW
Sleepy Europe the best way of investing in emerging markets? As far as equities are concerned, Societe Generale thinks so.
A basket of stocks of European companies with high EM exposure (including German carmaker Volkswagen) has performed better over the 2008 financial crisis and its aftermath than either European equities as a whole or EM equities. Past performance is no guide to future returns as the disclaimers say. But still, it is food for thought. Continue reading »
[Snap] Bahrain declares state of emergency
Updated with story from ft.com
In the latest attempt to dampen political unrest, Bahrain has called for a three-month state of emergency. According to state media, King Hamad bin Isa al-Khalifa has said Bahrain’s armed forces chief is authorised to take any measure necessary to ”protect the safety of the country and its citizens”. The announcement comes a day after Saudi Arabian troops entered Bahrain amid mass protests calling for a constitutional monarchy.
Japan: Thailand weighs the impact
When the 2004 tsunami hit Thailand, the Japanese were among the first to offer help and sympathy. Now that Japan is struggling, Thailand has been quick to offer rice and medical teams. Messages of sympathy are displayed everywhere from banks to restaurants to commuter trains.
But beneath the surface there is a colder calculus: what does the earthquake mean for a country that is one of the biggest recipients of Japanese direct investment? Continue reading »
New York headlines
* Japan’s nuclear crisis deepens
* Risky assets dumped as Japan crisis intensifies
* Singh’s $175bn nuclear dream threatened by Japan quake
* China electronics market faces shortages
* Carlyle to lead landmark shipping push Continue reading »
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