Venezuela: the Brazil connection
Two giants of the Latin American left, Luiz Inacio Lula Da Silva and Hugo Chavez, talked late into Thursday night in Caracas’s presidential palace, Miraflores, finishing their four-hour meeting around midnight.
Although Chavez said that they spoke about “imperial aggression against oil countries” – not just the sanctions that the US recently slapped on Venezuela, but also Libya – the presence of another man at the encounter suggested there were other motives for the visit too.
Carstens: Flogging a dead horse in Argentina?
Agustín Carstens arrives in Argentina on Friday, the latest stop on his charm offensive to drum up votes for his candidacy as IMF chief over that of France’s Christine Lagarde. Is it doomed?
Argentina is likely to be very polite – Carstens, the Mexican central bank chief, is a fellow Latin American and Argentina hates nothing more than being told what to do by developed countries it sees as too ready to spout the very orthodox economic ideas it believe led it to ruin.
But that’s the problem with how they see Carstens – his Chicago Boy background and orthodox outlook on some questions jar. Continue reading »
India: where are the entrepreneurs?
India is climbing the ranks of the global rich. It became the 4th largest wealth creator in 2010, behind the US, China and the UK, according to a new report on global wealth from Boston Consulting Group report. What’s more, wealth in India is expected to grow at a rate of 18 per cent between 2010 and 2015 according to statistics.
India may be cranking out its fair share of the world’s wealthy, but it continues to lag behind in promoting entrepreneurial ventures. Continue reading »
More UK equities for China…?
When China makes a move, it does so quietly. That’s why three years ago when it became one of the largest investors in the UK stock market, no one blinked.
It’s also why few people noticed this week when a subsidiary of China’s sovereign wealth fund became the very first Chinese firm to join the London Stock Exchange as a member. But this quiet move could open the gates to a flood of Chinese investment in the UK and Europe. Continue reading »
Vegetable row cast shadow over Russia’s WTO bid
Russia is known for strict hygiene standards when importing foreign food, but this week sanitary authorities went into overdrive banning purchases of European-grown vegetables in response to the E.coli scare.
The vegetable embargo may benefit domestic food producers in the short term, but risks disrupting Russia’s plan to wind up almost two decades of negotiations and enter the World Trade Organization this year. Continue reading »
Turkey’s unorthodox monetary policy: time for a rethink?
Turkey’s policymakers will come under increasing pressure to raise interest rates and tighten fiscal policy once next week’s national elections are over, after receiving an unpleasant surprise in inflation data released just over a week before the vote.
Consumer price inflation rose 2.42 per cent month on month in May, more than double the expected increase, bringing the annual rate of inflation from April’s historic low of 4.13 per cent to 7.17 per cent.
The figures, released on Friday, will fuel fears that Turkey’s central bank is failing to stop the economy overheating with its unorthodox policy mix of low interest rates to deter capital inflows, and higher reserve requirements to rein in domestic demand. Continue reading »
Walmart in India: things are looking up
A consensus seems to be emerging in India that foreign direct investment in retail could help the country tackle many problems – from rampant inflation to the wastage of rotten food – and an optimistic Walmart appears to be feeling that change too.
The US giant, the world’s biggest retailer by sales, has just expressed confidence that India will “ultimately” loosen restrictions on foreign investors that are currently limiting its presence in one of the biggest untapped retail markets. Continue reading »
Vietnam: getting down to business
Vietnam has taken a small step toward the Chinese model of co-opting business people into the Communist-ruled regime after Dang Thanh Tam, one of Vietnam’s richest men, was elected to the National Assembly.
Tam, who was a pioneer in the development of industrial parks aimed at foreign manufacturers, was elected in Ho Chi Minh City, along with his sister Dang Thi Hoang Yen, also a successful business owner. Continue reading »
Guest post: EM not just about China
By Jonathan Anderson, head of Asia-Pacific Economics at UBS
Almost exactly nine years ago – in the summer of 2002 to be exact – two extraordinary things happened.
The first is that China’s astounding growth story first began to make itself truly felt on the global stage. The latter part of that year marked the beginning of China’s decade-long explosion in commodity and primary resource imports, with the mainland quickly establishing itself as the world’s largest consumer of iron ore, cement, soybeans and a host of other products. (See chart below after the break.) Continue reading »
New York headlines
* Libya bet $1bn on SocGen shares
* Malaysia’s Petronas strikes $1.1bn shale gas deal in Canada
* Brazil to extend its welfare programme
* Beijing fires back at Google Continue reading »
South Korea’s pension fund to diversify
For South Korea’s National Pension Service, the world’s fourth-largest pension fund with $314bn of assets, diversifying its investment strategy has become a must, with its home market simply being too small to absorb all its investments.
Expansion into riskier assets also appears inevitable to meet growing public pressure to boost its returns, given the possibility of a shortfall of funds in coming decades as the country’s 46m population ages quickly. Continue reading »
Further reading: With Yoga and Fasting, Graft Fighters Shake India
Friday’s best picks from the beyondbrics team: how China’s liberals are under attack as hard-liners revive Mao’s musings and memory; why Indian politicians are running scare of Yogis, and is a weak dollar good for Russia? Continue reading »
Malaysia: Petronas strikes $1.1bn shale gas deal in Canada
Malaysia’s Petronas is paying M$3.32bn ($1.1bn) for a half share in three Canadian shale gas fields in an attempt to catch up with Asian rivals who have invested earlier in the booming North American unconventional energy sector.
The state owned Malaysian oil and gas producer said the deal with Canada’s Progress Energy Resources also allowed for the construction of an LNG gas export terminal on the British Columbia coast in which it would have an 80 per cent interest.
The terminal would be aimed at potential export markets in Asia as an alternative to piping the gas to eastern Canada and the US, where prices have fallen sharply because of massive investment in new shale gas fields. Continue reading »
China’s renminbi drive: more harm than good?
Over the past 18 months, Beijing has taken small but important steps to expand use of its currency overseas: allowing central banks from other countries to buy renminbi, giving investors limited access to China’s domestic bond market and allowing more companies and banks to settle cross-border trade in renminbi. Such is the pace of China’s renminbi drive that Standard Chartered recently predicted that 20 per cent of the country’s trade – worth $3 trillion in 2010 – would be settled in renminbi by 2015.
But if the idea is to protect China from the “dollar trap” – that is, diversify its reserves away from the US dollar without destroying their value – could the actions being taken by Beijing actually increase its dollar holdings? Continue reading »
Is China bubble now an anti-China bubble?
Sino Forest is the latest company to exemplify what is fast becoming a truism: if a company has Sino or China in its name and was listed abroad via a reverse takeover, shorting it might be a very profitable play.
The Toronto-listed forestry firm plunged more than 20 percent on Thursday following a highly critical research report. China MediaExpress Holdings, a firm that places ads on buses, had its Nasdaq-listed stock halted in March after falling nearly 50 percent in six weeks. China Agritech, another Nasdaq-listed firm, had lost more than 60 percent since late last year before its shares were suspended. Continue reading »
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