Good news from Chile: inflation slows
Amid the sea of a bad news roiling markets worldwide came a bit of good news in Chile: slowing inflation.
Chilean authorities have been grappling with above-target inflation for months but a slowing in inflation in July raises expectations that the central bank will on August 18 hold rates for the second month in a row. Continue reading »
Mexico: catching a cold?
Despite the crisis in the United States, Mexico’s finance minister, Ernesto Cordero, says the government is sticking to its 4.3 per cent forecast for economic growth this year.
Many commentators have assumed that Mexico’s economy will be severely damaged by the turbulence surrounding the US. Mexico is heavily dependent on exports of crude oil, automobiles and a range of other goods whose sales appear likely to be severely affected by reductions in US consumer demand. Analysts were certainly revising downward their forecasts. Continue reading »
Brazil’stock market led a rout in emerging markets shares and currencies, plunging nearly 10 per cent in mid-afternoon trading following Friday’s downgrade of the US’s credit rating by Standard & Poor’s.
Russia’s benchmark Micex index lost 5.5 per cent and the dollar-denominated RTS index dropped by 7.8 per cent in its afternoon session. Hong Kong’s Hang Seng index fell as much as 5 per cent during the day before recovering to close down 2.2 per cent. Continue reading »
Argentina: economic top dog?
Nothing illustrates Argentina’s gloating at Standard & Poor’s historic downgrade of US debt better than a front-page map on pro-government Pagina 12 at the weekend, showing the Americas upside down with Argentina at the top and the US and Canada taking South America’s place.
Indeed, Cristina Fernández, the president, misses no opportunity to draw comparisons (albeit partial) with US and European economic woes and default fears and Argentina’s full-speed-ahead economy. Continue reading »
Russia: “clearly underrated”
Talk about being opportunistic. Just days after the US was downgraded by Standard & Poors, Russia’s finance ministry said international ratings agencies have “clearly underrated” Russia. It argued its state debt as a percentage of GDP is lower than emerging and developed economies – particularly the US.
But Russia’s protestations come at an odd time, as the price of oil – key for the government to balance its budget – continues to fall. With government social spending up ahead of next year’s elections, and less oil revenues coming in due to a diminishing global appetite for risk, does Russia really deserve an upgrade? Continue reading »
Poland: whistling past the graveyard
In the current ghoulish economic environment, whistling past the graveyard may make a lot of sense – which is what Poland’s finance ministry is doing, trying to reassure investors that Poland’s sound economic fundamentals make it a safe haven at a time of turmoil.
Standard & Poor’s downgrade of the US may actually help Poland, Domink Radziwill, the deputy finance minister, told PAP, the Polish news agency. Continue reading »
Tymoshenko’s arrest, bad for Ukraine
Ukraine, a vast emerging market economy on the European Union’s eastern border, has been hit in recent days with a double whammy.
The nation’s small and relatively illiquid stock market plunged by more than 8 per cent on Monday, bringing the decline in the past week to a whopping 16 per cent. The trend, largely driven by global market factors such as S&P’s US downgrade and European debt fears, has been sharp and downwards in recent months.
Ukraine is also being shaken up politically. Continue reading »
India’s latest fad: the car café/studio/lounge
Not long ago, cars were leaving Indian salesrooms almost unaided. But higher interest rates have brought soaraway sales to an end and a price war is now underway.
As well as lower prices, distributors are offering extended warranties and even chauffeurs to accompany luxury cars. Now several big manufacturers have opened cafés, studios and airport lounges in a bid to reinforce their brands and pamper their customers. Continue reading »
CEE markets wrap: fear dominates
Equities see-sawed in central and eastern Europe on Monday as investors struggled to digest S&P’s historic downgrade of the US.
The Budapest exchange opened sharply down, recovered as investors took heart following the European Central Bank’s move to shore up Spanish and Italian debt – then fell again later in the morning. Continue reading »
India’s mutual funds: leg up?
Financial regulators in India have been forced to perform a U-turn by revoking a decision taken two years ago to ban front loaded fees for distributors, according to a report in this week’s FTfm.
The decision to end front loaded fees contributed to an eye-watering 12 per cent drop in total assets under management in the latest financial year for the mutual fund industry. So it should be seen as a positive move, right? Continue reading »
Vinaphone: communism has benefits!
In modern, consumption-obsessed Vietnam, it is hard to find young people who profess much enthusiasm for Communism.
But the select few who opt to follow the ways of Ho Chi Minh and Vladimir Ilyich Lenin rather than Harry Potter and Justin Bieber have much to gain from moral guidance to career advancement within the civil service and, now, cheaper mobile phone calls. Continue reading »
New York headlines
* Sell-off starts following US downgrade
* S&P: Asia would be hit harder by a second global crisis
* Gold price jumps above $1,700
* China likely to raise interest rates further
* Goldman Sachs upgrades India to ‘market weight’ Continue reading »
Chinese media: more fighting words
China has made more than clear its displeasure at the US’ debt woes, admonishing Washington to get its financial house in order. But now China’s hawks demand that Beijing do more than just finger-wagging.
Following US lawmakers’ demands that US president Barack Obama should approve a request by Taiwan for advanced F16 fighter aircraft, Chinese state media have run a commentary piece demanding that China teach the US a lesson. Continue reading »
India – a bright spot in a dark world
Just as world markets reel from the downgrade of US debt, India has received an unexpected upgrade.
Goldman Sachs, the US investment bank, on Monday upgraded its outlook on the Indian economy from ‘underweight’ to ‘market weight’. The nod of approval helped Sensex, the benchmark index on the Bombay Stock Exchange, make a climb-back from heavy morning losses triggered by global market fears. Continue reading »
Further reading: who’s to blame?
Monday’s top picks from the beyondbrics team: why do Swiss banks attract wealthy Asians, the fragile relationship between the US and Russia, and who should we blame if we double-dip? Continue reading »
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