Daily Archives: Sep 9, 2011

It didn’t go down very well with Venezuelans, for whom blackouts are a daily nuisance, when they were told this week that their government had “given” the tiny west African state of the Gambia $22m for its electricity sector.

In fact, it was only a loan (even if “lending” often becomes “giving” in this country), but it was an unwelcome reminder of the ongoing fiasco that is Venezuela’s electricity sector, which caused the economy to contract in the second quarter. Read more

By Martha Gill

As Brazilians warm up to hosting the 2016 Olympics and the 2014 World Cup, practising their stretches and squat-thrusts, they have suddenly begun to worry about their English.

This anxiety is pushing up a booming market for English language tuition in Brazil, which has grown as the economy develops and becomes more globalised. And as Brazilians look for ways to brush up their language skills, one Brazilian company is looking to the US to help fill the gap. Read more

Another bout of nerves over Greece.  The shock resignation of Germany’s ECB board member Jurgen Stark. Concerns about the economic outlook and financing. All this and more made for a black day for central and east European financial markets on Friday.

Hungary led the way down with a 6.2 per cent drop in the Budapest stock market and a 1.2 per cent decline in the forint against the euro. Poland wasn’t far behind with shares down by 4.95 per cent and the zloty by 1 per cent against the euro. With global financial markets in turmoil, banks naturally bore the brunt of the action. Read more

Trade between BRIC countries and Africa is often seen as one-way traffic – with the fast-growing emerging powers, notably China and India, seeking to exploit the continent’s natural resources.

But there are increasing examples of African companies, predominantly South Africa groups, looking east for opportunities in Asian markets. Among them is Sanlam (SLM:JNB), South Africa’s second largest insurer, which has announced plans to pay R1.9bn ($266m) for a 26 per cent stake in Shriram Capital, the holding company of the Shriram conglomerate. Read more

Cuba’s great age of sugar has passed, so too its wealth and with it, now, one of the island’s most astute observers. Jerry Hagelberg – sometimes known as “Mr Sugar” and a frequent visitor to the island’s plantations in the 1960s with Che Guevara when he worked in Havana with “El Che” as economics editor of the government newspaper Granma – died this week. He was 86. Read more

There are many things China comes under fire for when US politicians take the stage: stealing American jobs is an old favourite, as is “manipulation” of the renminbi to keep Chinese manufacturing cheap. Then there are the exports of toxic petfood, or lead-coated children’s toys. But the latest broadside from Capitol Hill hits out at a new, and somewhat surprising, target: cheap Chinese solar panels being installed on American homes. Read more

Poland fallsPoland’s zloty is bearing the brunt of investor fears about emerging markets, with the currency falling against the euro, the dollar and the Swiss franc despite a lack of hard economic news that would justify the sell-off. Read more

Chinese food store, September 2011, Changzhou, Jiangsu ProvinceHas Chinese inflation peaked given the publication on Friday of figures showing the rate of increase in consumer prices slipped from 6.5 per cent rise in July, to 6.2 per cent last month?

The figures were bang in line with the Chinese government’s indications and the forecasts of most economists. But even if the trend is now down, future inflation reports may still hold some nasty surprises, given the key role of volatile food prices in the economy. Read more

scotiabank buys into ChinaWhile some foreign financiers have some doubts about the condition of China’s banks and their bloated loan books, Canada’s Scotia Bank on Friday announced plans to buy a 19.99 per cent stake in the Bank of Guangzhou (BGZ) for a cool C$719 million (Rmb4.65 bn).

Scotia (BNS:TOR), which has been in China nearly 30 years,  is presumably going into unlisted BGZ with its eyes open. Food for thought for the many bears of China’s banking/property sectors. Read more

A classic risk-off week for fund flows, according to the latest data from EPFR, the Boston-based fund watcher. As policy makers in the US and Europe go on failing to impress, the search is back on for safe assets – and EM bond funds continue to benefit.

Lumping DM and EM together, investors took $15bn out of risky equity funds; they put $2.8bn into conservative bond funds and $11.5bn into super-safe money market funds. In the EM fund universe, $1bn left equities and $685m went into bonds – with local currency bonds, now in their 24th straight week of inflows, recovering to $212m of inflows in the week to September 7, up from $50m a week earlierRead more

Chinese inflation falls in August to 6.2%

Obama jobs package fails to lift spirits

Hong Kong faces dollar peg inflation dilemma

 Read more

Like the confidential US cables released by Wikileaks, devastating reports by India’s Comptroller and Auditor General spell out what everyone fears to be true but dare not put in words about the running of the Indian government.

The two reports, released on the last day of a tumultuous monsoon session of parliament, have thrown a scorching spotlight on India’s civil aviation and oil ministry, and the leading companies in these two sectors. Read more

A roulette wheelIs south east Asia going soft on inflation, or are its central banks taking a justified pause in the monetary policy tightening cycle as growth clouds hover over the global economy?

Evidence from the most recent actions by central banks suggests the answer is that it depends where you are looking. But some of the region’s central bankers are clearly taking big risks, with Indonesia taking what looks like the largest gamble of all. Read more

Friday’s top picks from the beyondbrics team: Tim Geithner on how to boost global growth; why central banks need to act; and how to achieve growth beyond economic freedom.  Read more

It must be nice to be a Qatari bureaucrat. The country’s government recently gave salary and pensions raises of between 50 and 120 per cent to public sector workers – something other employers are wholly reluctant to hand out these days. Read more

It’s not exactly an enticing sales pitch for foreign investors looking to do business in booming Indonesia: Government threatens trade barriers against Canada’s RIM for opening factory in rival neighbour Malaysia.

Yet that was precisely the reaction this week from Indonesian cabinet members to the decision by the maker of BlackBerry smartphones to locate a regional production hub north of the border. Read more

* Chinese inflation falls in August to 6.2%

* In Asian rate dilemma, economies hit pause

* Hong Kong faces dollar peg inflation dilemma

* Greek economy shrinks by 7.3% Read more