Mexico’s doomed tax reform
Mexico’s tax system – which nets the government the equivalent of a miserly 11 per cent of GDP in non-oil revenues – has long been in need of an overhaul.
But the fiscal reform proposal recently presented to the Senate by the opposition Institutional Revolutionary Party (PRI) is all but dead in the water. Continue reading »
Tick tock, tick tock.
Egypt faces another problem.
If the Cairo stock exchange does not reopen by the end of the next week, it could be kicked out of the MSCI regional indices (that’s Emerging Markets, All-Country World, EMEA and Arabian Markets ex-Saudi).
So what you might say. Does it really matter?
In a word, yes. ETFs, index funds and any passive investors benchmarked against the MSCI indices would be forced to sell equities, says Citigroup. Continue reading »
Hungary: keeping score
Next month marks the first anniversary of prime minister Viktor Orban’s thumping election victory – an event that radically transformed the political and investment climate in Hungary.
In a defiant address on Tuesday, Orban boasted he had resisted “diktats” from Brussels and had stood up for Hungary against an array of other malignant forces, among them the IMF, banks, stock exchange sharks and foreign critics.
But in the unorthodox political tennis match between Orban on one side and government critics, foreign investors, the European Commission and European Central Bank on the other, who is really winning? Continue reading »
Guest post: oil windfall gains still to come for Russia investors
By Ivan Tchakarov of BoA Merril Lynch
With unrest in the Middle East pushing oil prices higher, there is one scenario that is not to be taken lightly – the risk of stagflation: higher inflation against a backdrop of slowing global growth.
Ten out of 11 postwar recessions in the US have been preceded by sharp increases in oil prices. Investors are right to wonder whether history will repeat itself and might be the impact on emerging markets. Continue reading »
Slower Japanese investment could hurt Indonesian growth
As the massive scale of Japan’s crisis became clear, the future of tens of billions of dollars of planned investments by Japanese companies in Indonesia looked shakey. Delays in the huge infrastructure projects could hurt Indonesia’s growth at a time of rapid expansion.
But the head of Indonesia’s investment board and Japan’s Bank for International Cooperation said they are relatively confident the capital needed for power plants, roads, airports and rapid transit is not at great risk of drying up. Continue reading »
Thai trade’s positive surprise
There aren’t many bright spots in Asia at the moment, but Thailand has just turned in some surprisingly strong trade data, even if it is from February, before the Japanese earthquake.
Thai export growth was supposed to slow down in February during the Chinese New Year but figures released by the commerce ministry show exports surged by 31 per cent year-on-year, up from 22 per cent in January and well above the consensus estimate of 20 per cent. Continue reading »
A rollercoaster ride for oil prices on Friday. Having risen sharply on the UN security council Libya resolution, they have plunged on reports of a ceasefire announcement from the Gaddafi government.
Tripoli closed Libyan airspace in response to the no-fly resolution but also pledged to stop fighting in a move that was clearly designed to give foreign power fewer reasons to intervene. Continue reading »
Lessons from Bright Food’s failed bid
Fourth time unlucky. Bright Food, the Chinese dairy conglomerate with ambitions to go global, has failed once again to cross the line. The 50 per cent stake in Yoplait, the world’s number two brand that was put on the bloc by French private equity firm PAI, has gone to General Mills of the US. The deal values it at €1.6bn.
This time at least Bright Food appeared to put up a good fight. It put more money on the table than rival bidders, bankers say, and brought the promise of something potentially bigger still – a market of 1.3bn stomachs with a growing appetite for yoghurt. Continue reading »
New York headlines
* Bahrain downgraded by S&P
* Saudi king pledges jobs, healthcare and 60,000 security posts
* China: a touch more tightening
* Security Council votes for no-fly zone
* G7 in rare intervention to weaken yen Continue reading »
[snap] Yemen protest violence: 20 killed, over 100 wounded
At least 20 Yemenis were killed and more than 100 wounded when security forces and
pro-government gunmen opened fire at a protest after Friday prayers in Sanaa, a doctor said, according to a Reuters report.
Bahrain downgraded by S&P
Standard & Poor’s Ratings Services on Friday downgraded Bahrain’s sovereign credit ratings to one level within its investment grade category, as continued violent protests have left the country’s political and economic outlook “fundamentally more challenging”.
It follows Egypt’s downgrade by Moody’s Investors Service to three levels below investment grade on Wednesday. Continue reading »
[snap] Saudi king pledges jobs, healthcare and 60,000 security posts
Saudi Arabia’s King Abdullah vowed to create jobs, invest in healthcare and create an anti-corruption agency on Friday amid growing tensions in the region.
Reuters reported that in a rare address to the nation, the king vowed to create an anti-corruption agency to spare none, 16 billions riyal ($4.2bn) to the health sector, 500,000 homes and the creation of 60,000 addition internal security jobs. Continue reading »
[snap] China: a touch more tightening
Oil prices fell back briefly after China raised bank reserve requirements for the third time this year in its latest move to tighten monetary policy.
Lenders will have to increase by 0.5 of a percentage point to 20 per cent the proportion of deposits placed at the central bank, The People’s Bank of China said on its website on Friday. Beijing has clearly decided that inflation remains a threat, despite the likely dampening impact on the Asian economy of the Japanese disaster. Continue reading »
Will Belgian club play ball with billionaire Bakries?
Indonesia’s politically-connected Bakrie family is in talks to acquire a stake in the financially-troubled Belgian football team Anderlecht, or so they say. After taking a 20 per cent stake in Leicester City, Belgium’s top national club looks interesting, said Iman Arif, chairman of the Indonesian youth team and a Bakrie associate.
“We want to give young talent in Indonesia who are performing well a chance to play abroad”, Arif told beyondbrics. “We are in talks, but the details are still being discussed. Let’s say it’s in an early stage.” Continue reading »
EM fund flows: backing off
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