Daily Archives: August 24, 2011

Chile protests: long, hard road ahead

August 24, 2011 11:38 pm by Jude Webber

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Sebastián Piñera, Chile’s president, reckons a two-day nationwide strike which began on Wednesday could cost the country $400m and has lamented incidents of violence. The strikers’ aim, he says, is to “inflict damage on Chile”.

Rodrigo Ubilla, interior ministry undersecretary, said it had turned out to be “a big failure” with low turnout and most of the country working normally.

But Chile is not working normally. Three months of protests by university students demanding free education have exposed festering social sores. Continue reading »

Tags: Chile politics, Chile protests Posted in Chile, LatAm | Permalink

Mexico: inflation at a standstill but should investors worry?

August 24, 2011 9:12 pm by Adam Thomson

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If inflation concerns have returned to some Latin American economies, there is almost no sign of it in Mexico. Prices went up a mere 0.09 per cent during the first half of August, only half the amount analysts had expected.

The latest data, published Wednesday by the country’s national statistics agency, not only point to the likelihood that the central bank will keep interest rates on hold at 4.5 per cent when it next meets this Friday. They also suggest that the bank’s next move, whenever that comes, might even be a cut rather than a hike. Continue reading »

Tags: inflation, Mexican economy Posted in LatAm, Mexico | Permalink

Poland: privatisating with one hand, buying state assets with the other

August 24, 2011 6:20 pm by Jan Cienski

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This is the kind of thing that could raise an eyebrow or two. A corporate press release announcing a big takeover has come straight from the printing presses of the treasury minister and extols the business sense of the transaction.

In the Polish government’s latest push to build up large corporations through its privatisation program, the treasury ministry has announced a double sale of the Polish assets of Sweden’s Vattenfall utility – with one part going to state-owned PGNiG and the other to state-controlled Tauron.

Posted in Europe, Poland | Permalink

Peru: return of the bond vigilantes

August 24, 2011 5:30 pm by John Paul Rathbone

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Fickle but powerful things, markets. Investors know that. So too do struggling western governments. Now it’s the turn of Peruvian president Ollanta Humala – the former coup leader and Hugo Chávez admirer who has now turned (apparently) into a middle of the road centrist in the mould of Brazil’s former president, Luiz Inácio Lula da Silva.

It was only a handful of months ago that markets were freaking out at the prospect he might become president. Yet now that Humala is installed in the presidential palace, they’re not so worried and have decided that they’re open for business after all. On Tuesday, the government returned to local debt markets for the first time in five months with a PEN300m (US$110m) 2-year bond. The issue had six times more bidders than was available. Continue reading »

Tags: bonds, Peru economy, Peru politics Posted in LatAm, Peru | Permalink

[snap]: S&P upgrades Czech Republic

August 24, 2011 4:46 pm by beyondbrics

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Standard&Poor’s on Thursday lifted its rating of Czech long-term foreign currency debt to AA- from A. The rating agency said the reason was a change in sovereign-rating criteria that puts more weight on the “political and economic profile” of governments.

It puts the Czech Republic on a par with Japan and China on S&P’s fourth-highest rating.

Tags: credit ratings Posted in Czech Republic, Europe | Permalink

GVK ups stake in Bangalore airport with $135m deal

August 24, 2011 4:25 pm by Stefan Wagstyl

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By Mithun Varkey of mergermarket

Despite the global financial turmoil, Indian companies are convinced that their domestic infrastructure sector story remains a good bet.

GVK Power and Infrastructure, part of the diversified GVK group, has this week agreed to pay more than US$135 million for a 14 per cent stake in Bangalore International Airport (BIAL), making it the largest shareholder with 43 per cent and plans to acquire majority control. Continue reading »

Tags: transport Posted in Global, India | Permalink

Guest post: Turkey vs Hungary

August 24, 2011 3:46 pm by beyondbrics

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By Christian Keller of Barclays Capital

The central banks of Turkey (CBT) and Hungary (NBH) both left their policy rates unchanged on Tuesday – the CBT at 5.75 per cent and the NBH at 6.00 per cent - as widely expected.

But this is about where the similarities end. Indeed, the Turkey-versus-Hungary comparison is perhaps the starkest example of the macroeconomic contrasts within the EEMEA region and also of the different policy responses of the respective central banks. Continue reading »

Tags: guest post, inflation, monetary policy Posted in Europe, Global, Hungary, Turkey | Permalink

Vietnam’s mandarins: stuck in a rut

August 24, 2011 3:03 pm by Ben Bland

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The Vietnamese government is stuck in an economic bind and its room for manoeuvre continues to shrink as it struggles to avoid a nasty inflationary spiral.

Struggling business owners and property developers are crying out for interest rates to be lowered just as the government statistics office revealed on Wednesday that inflation is continuing to rise, up to an estimated 23 percent year-on-year in August. Continue reading »

Tags: economic growth, inflation Posted in Vietnam | Permalink

India wage inflation: mo’ money please

August 24, 2011 2:17 pm by Akanksha Awal

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When workers at one of India’s largest public sector companies demand a minimum pay hike of a 100 per cent, you know Asia’s third largest economy has a wage inflation problem on its hands.

Analysts predict that the 100 per cent-plus increase demanded by unions at Coal India could eventually lead to a more modest settlement of around 15-20 per cent, the Economic Times reports. But the episode underscores one of the major problems Indian employers are facing at the moment – how to hire and retain the best staff without taking a hit to their margins. Continue reading »

Tags: wages Posted in Asia, India | Permalink

From FT.com August 24, 2011

Food giants clash over access to China

A legal battle between two of the world’s most powerful agribusiness companies is shedding light about the growing role of China in agricultural commodities markets.

Syngenta, the Switzerland-based agrochemicals producer, is suing New York-listed Bunge, one of the world’s largest food traders, for refusing to accept a type of its biotech corn. Bunge – the “B” of the “ABCD” group of companies that includes ADM, Cargill and Louis Dreyfus and control agriculture trading – refuses to buy from farmers growing Syngenta’s new Agrisure Viptera corn because it has not been approved for sale in China. Continue reading »

Tags: commodities, food prices Posted in Asia, China | Permalink

New York headlines

August 24, 2011 11:56 am by beyondbrics

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Libya seeks initial $2.5bn in frozen funds

Food giants clash over access to China

Cosco warned of worldwide ship seizures

China turns to Libya rebels, urges “stable transition”

Slim increases his stake in NY Times Continue reading »

Posted in Global | Permalink

Poland: PKO offer blown off course

August 24, 2011 11:04 am by Stefan Wagstyl

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Another planned equity offering has fallen victim of the recent market turmoil - Poland has postponed the sale of a 15 per cent stake in PKO BP (worth about 6.8 bn zlotys ($2.3bn), and may reduce the offering if and when it comes back to the market later this year.

The treasury ministry said in a statement late on Tuesday that it would make a decision on restarting the sale of Poland’s biggest bank in late October-early November. But with leading bankers warning that the impact of this month’s upheaval on the primary market isn’t yet clear, the outlook then may be no more predictable than it is now. Continue reading »

Tags: privatisation Posted in Europe, Poland | Permalink

Thai central bank fears inflation more than new government does – for now

August 24, 2011 10:57 am by Tim Johnston

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Thailand’s central bank has defied government pressure and slowing economic growth to lift interest rates once again.

The Bank of Thailand’s Monetary Policy Committee met on Wednesday and raised the benchmark one-day repo rate by 25 basis points to 3.5 per cent, its tenth increase in 11 meetings. The reason: inflation.

Tags: monetary policy Posted in Asia, Thailand | Permalink

Don’t expect China et al to save the world

In a world economy rapidly running out of bright spots, many are putting their hopes on the emerging and developing economies. Many experienced very rapid growth over the past decade, and most have recovered quickly from the 2008-2009 crisis.

Optimism abounds. Citigroup predicts real gross domestic product will grow more than 9 per cent a year in Nigeria and India, and more than 7 per cent in Bangladesh, Indonesia and Egypt over the next two decades. In a new Peterson Institute for International Economics study, Arvind Subramanian projects that aggregate output of developing and emerging economies will expand at an annual rate of 5.6 per cent over the same horizon. Continue reading »

Posted in Global | Permalink

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Daily Archives: August 24, 2011

Chile protests: long, hard road ahead

Mexico: inflation at a standstill but should investors worry?

Poland: privatisating with one hand, buying state assets with the other

Peru: return of the bond vigilantes

[snap]: S&P upgrades Czech Republic

GVK ups stake in Bangalore airport with $135m deal

Guest post: Turkey vs Hungary

Vietnam’s mandarins: stuck in a rut

India wage inflation: mo’ money please

Food giants clash over access to China

New York headlines

Libya seeks initial $2.5bn in frozen funds

Poland: PKO offer blown off course

Thai central bank fears inflation more than new government does – for now

Further reading: great brawl of China

Don’t expect China et al to save the world

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