Brazil less risky than the US
Should Americans be giving up their passports and moving to Brazil to avoid bankruptcy?
That depends on whether you believe in the wisdom reflected in the one-year credit default swap market. Guido Mantega, Brazil’s finance minister, does. He says that the risks associated with Latin America’s largest economy are now lower for the first time than those of the US as measured by the CDS market. Continue reading »
Americas market wrap
Latin American markets have been dragged down with the rest of the world due to fresh concerns over the eurozone sovereign debt crisis and investors found little consolation in US economic data. The region’s currencies also extended losses, on fears that a default in Greece or Ireland would send shock waves through world credit market. Continue reading »
Formula 1 may come back to Argentina
Argentines, who tend to fancy themselves as racing drivers when they are behind the wheel, have been deprived of Formula 1 for more than a decade. A new project to build a world-class race track north of Buenos Aires now aims to put that right. Continue reading »
Chile’s ash dump and Patagonia’s sheep
A million sheep in Argentina’s Patagonia, a region prized for its luxury wool, could in the devastating ash dump from Chile’s Puyehue volcano, a farm association is warning.
Argentina is the world’s fourth biggest wool exporter and with the annual shearing due to get under way in September, producers are looking at heavy losses. About 60 per cent of Argentina’s wool production comes from Patagonia and a state of agricultural emergency has been declared in the provinces of Chubut, Río Negro and Neuquén to unlock aid for farmers hit by ash falls from the June 4 eruption. Continue reading »
Mexico: China keeps its distance
Jack Liu had plenty of time on his hands last weekend as he sat at his stand in the Mexican Oil Congress.
“This is the third year our company has taken a stand at the [oil] congress, but we’ve never raised any business,” said Liu, a manager at Beijing-based LandOcean Energy Services, a high-tech data processor for oil companies. “It’s terribly difficult to get business with Pemex [Mexico’s oil monopoly].”
The company is just one example of China’s striking failure to develop strong economic ties with Mexico at a time when it is building links almost everywhere else in Latin America. Continue reading »
Polish inflation: increasingly political
Poland avoided the worst of the global economic crisis. But, with figures published on Thursday showing May’s inflation rising to an annual rate of 5 per cent, is the country now at risk of over-heating?
Possibly, says the central bank, which has raised interest rates four times this year. Definitely not, says the government. In an interview with the Financial Times, Waldemar Pawlak, Polish economy minister (pictured), accused the central bank of over-reacting to inflation and putting growth at risk. Continue reading »
India: staying cool
India’s unrelenting heat presents big opportunities for global air-conditioner manufacturers, but few makers have broken into the mass market. Only 3 per cent of Indian households have air-conditioning units, says Euromonitor, a market research consultancy. That means 97 per cent don’t.
However, this may now be changing with incomes rising, spurring demand for air-conditioning units newly-minted middle class consumers seek ways of coping with the summer. Continue reading »
Venezuelans smuggle petrol as blackouts spread
By Girish Gupta
It's in the petrol tank
In the Venezuelan border town of San Antonio, motorists fill their tanks for $1 then drive a few hundred yards into Colombia, syphon out the contents and sell them to middlemen for $40. Meanwhile, as electricity blackouts spread this week from Caracas to Maracaibo, Venezuela’s second city, president Hugo Chávez is putting the blame on unidentified saboteurs.
Heavy subsidies on petrol and electricity clearly aren’t working. But looming elections next year mean the Chávez administration probably can’t do much about it. Continue reading »
Shares in Brasil Foods (BRFS3:SAO), the world’s biggest poultry exporter, surged by more than 4 per cent in São Paulo on Wednesday after regulators postponed a decision on whether or not to break the company up.
CADE, the competitions watchdog, had been due to rule on the merger of Perdigão and Sadia, which created Brasil Foods, more than two years after it was announced in May 2009. Continue reading »
St Petersburg’s pre-election summit
As White Nights descend on St Petersburg, Kremlin officials are suiting up for the annual opportunity to wine, dine and woo foreign investors at Russia’s answer to Davos: the St Petersburg Economic Forum.
The forum, which kicks off Thursday, comes at a time when Russia is facing capital outflows. But as Arkady Dvorkovich, the Kremlin’s economic advisor, pointed out in a press conference this morning, the forum is more important for Russia than ever as it seeks to calm pre-election jitters, and begins to look east, as well as west, for investment.
Sino Forest: smoke or fire?
After weeks of allegations from short-seller Muddy Waters, Sino Forest held an analyst call on Tuesday in a bid to assuage the concerns of investors – who have watched the share price plummet 70 per cent in recent weeks – and to announce first quarter earnings.
Maybe it was the awkward way in which a few analysts’ questions were cut off, or the way some questions were ignored entirely, that unsettled the market: immediately after the call, the stock fell 12 per cent on the Toronto Stock Exchange. It closed down 32 per cent.
Further reading: Beware Brazilian bonds?
Wednesday’s best picks from the beyondbrics team: Why investors are wary of Brazilian bonds and exploring whether China could be the next Japan. Also why heads have started to turn from emerging markets.
New York headlines
* China warns over South China Sea dispute
* Singh aide urges India to end energy subsidies
* Brazil to rein in lending by BNDES
* IMF warns Russia of reform or recession
* Chevron bets on power from $30bn volcanoes in Indonesian rainforest Continue reading »
Good news?: Bakrie family media IPO
The Bakrie family is bundling its television and online media outlets, including Indonesia’s most popular broadcaster, and listing them on the Jakarta stock exchange. It’s the latest business venture by the powerful family since taking their coal assets to London with the Rothschilds.
“We see tremendous growth in the advertising market and this will be the leading Indonesian media company,” Anindya Bakrie, president director, told beyondbrics. “Our net income has started to come online and revenue has been growing at 50 per cent.” Continue reading »
S&P cuts China property outlook
Pity the developers. Faced with tightening liquidity, an uncertain sales outlook, rising commodity prices and a government that is determined to get a grip on runaway property prices, the industry has another doomsayer: the ratings agencies.
On Wednesday S&P followed Moody’s and downgraded the outlook for the sector to ‘negative’, and said it might downgrade individual ratings in the next 12 months. Continue reading »
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