ENRC and Kazakh corporate governance
The ouster of independent directors from the Eurasian Natural Resources Corporation (ENRC:LSE), the London-listed Kazakh mining group, is causing a rumpus in the UK corporate world, but what does it mean for Kazakhstan Inc? Continue reading »
Bahrain: F1 cancelled, reconciliation still far off
The end of Bahrain’s F1 hopes has been the cause for widespread cheer among opposition activists reeling from the harsh crackdown.
The government-backed racetrack operator has thrown in the towel after the teams said they wouldn’t attend even though the FIA World Motor Sport Council had controversially decided to reschedule the grand prix for October 30.
The cancellation will feel like justice given the severity of the crackdown on the majority Shia protest movement, but the abandonment of another high-profile event could actually make the path towards reconciliation even rockier. Continue reading »
IMF: it’s Lagarde, says Paddy Power
If you want to apply for the top job at the IMF your time and chances are running out: the deadline for applications is Friday and Christine Lagarde, France’s finance minister, has strengthened her lead as the odds-on favourite at Paddy Power.
The online betting site has her as 1/10 favourite – so punters would have to bet £10 for the chance to win £1 (and take home £11). Agustin Carstens, the EM candidate who has failed to gather much EM support, is at 5/1. Continue reading »
Vienna to neighbours: Fear not, minnows
Stock exchanges in central and eastern Europe have watched – no doubt nervously – as the Vienna exchange has moved across the region snapping up controlling stakes in smaller bourses.
After all, in a world dominated by mega-exchanges like the one contemplated by the proposed merger of Deutsche Borse and NYSE Euronext, what place can a tiny bourse in an eastern European country hope to have? Like in Croatia or Romania, for example. Continue reading »
Fund flows: EM bonds – the new safe haven?
Money has been sloshing in and out of EM equity funds for months; in the week to June 8, there was a marginal withdrawal of $222m, according to data from EPFR, the Boston-based fund tracker. But it’s hard not to detect a pattern in EM bond funds: 11 weeks of inflows, capped this week by a whopping $1.37bn (see chart after the break).
Is it now safe to talk about a shift from equities into bonds by EM investors? Continue reading »
Croatia & the EU: final set
Croatia has received its eagerly-awaited green light – the recommendation from European Union officials to wrap up membership talks in just two more weeks.
Jose Manuel Barroso, president of the European Commission, proposed closing the negotiations and opening the door for Croatia to become the bloc’s 28th member state on 01 July 2013. That’s good news for Zagreb, for the rest of the former Yugoslavia, and for the region’s fragile economies. Continue reading »
Big Brother is watching
Forget rapid growth. Forget economic catch-up. Forget political risk. What really defines emerging markets is the heavy role of the state.
So says John-Paul Smith of Deutsche Bank, the latest pundit to try to define the marshmallow cloud that is the EM concept. And, in his view, it is more than a matter of academic debate. If what distinguishes EMs is state influence in the economy then investors are in for a bumpy ride. Far from out-performing developed markets in the next couple of years, EMs could run into the buffers. Continue reading »
The end of inflation? Not for long
Around the emerging world, policymakers have the end of inflation in their sights – even though prices are still rising and inflation has yet to peak in many markets. Governments from Beijing to Brasília have made fighting inflation their top priority for 2011. By some time next year, many believe the battle will be won.
But relief, when it comes, is likely to be short lived. Continue reading »
Indian airlines: westward bound
In a sign that the Indian airline industry may be about to turn the corner, Jet Airways, India’s largest airline by passenger numbers, is adding 10 new long-haul aircraft to its existing fleet.
And, while buying new planes, the airline, like its competitors, is increasingly shifting focus from Indian passengers to international in search of profits. Continue reading »
New York headlines
* China to develop N Korea trade zones
* China’s SMEs face severe cash crunch
* China reports less-than-estimated trade surplus
* Samsonite raises $1.25bn in HK IPO
* US puts new sanctions on Iran security forces Continue reading »
Brasil Foods – doomed by inflation?
May 2009: that was then
It’s almost unthinkable.
The world’s biggest poultry exporter, Brasil Foods, could soon be history if Brazil’s competition commission decides to block the $3.8bn merger that created the company two years ago.
Late on Wednesday, Carlos Ragazzo, a director of Brazil’s CADE antitrust agency, voted against the deal, adding: “It’s rare in antitrust analyses around the world to find a transaction in which the probability of damage to the consumer and the market is so evident.” Continue reading »
Further reading: China maturing?
Friday’s best picks from the beyondbrics team: how a failed Chinese IPO shows China markets maturing, looking at how India grapples with dynamism and dysfunction, and taking a cold, hard look at the auditors of those Chinese companies under fraud investigation. Continue reading »
S Korea: brave call on rates
South Korea made a brave call by lifting interest rates by 25 basis points to 3.25 per cent on Friday despite the signs that the global recovery could be slowing.
In truth, yo-yoing data are going to present Korea with mixed messages about the global economy over the next few months. If Seoul’s central bankers are to remain committed to fighting inflation, they will have to hold their nerve and continue raising rates to 4-4.25 per cent to reach neutral levels (no stimulus or brake). There are still some gutsy decisions to be made. Continue reading »
China’s skyscraper boom: next a bust?
China is on track to complete one skyscraper every five days over the next three years, in a height-obsessed construction frenzy that could presage economic trouble if the experience of other nations is anything to go by.
China will have 800 buildings taller than 152 metres by the end of 2016, more than four times as many as the United States now has, according to a report by Motiancity, a Chinese website for skyscraper enthusiasts. Continue reading »
China B: the sum of all fears
Another plunge in China ‘B’ shares – the sort available to foreigners – as investors take fright at growing concerns about possibly accounting irregularities in US-listed Chinese companies.
The Shanghai ‘B’ index dropped 2.7 per cent on Friday, following a 7.9 per cent fall on Thursday, turning a sell-off into a rout. With the Shanghai main market holding up and Hong Kong down only 0.8 per cent, there’s no general loss of confidence in China. But it’s more than a little local difficulty, reviving long-standing questions about valuations and about transparency. Continue reading »
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