Daily Archives: Sep 15, 2011

Just when you were beginning to think about Mexico’s slowing growth prospects, here’s an argument for investing in stocks with a high exposure to the country’s domestic market.

In a report Thursday, HSBC argues that 2012 could be a good year for the domestic market thanks in large part to presidential elections, which are scheduled for July. The report says that elections are always a stimulus to consumption, which grew 150 basis points above economic growth in 2006, the last year Mexico had a presidential vote. Read more

It is tempting to take a cavalier attitude to the jettisoning of ministers in President Dilma Rousseff’s cabinet.

The latest casualty was tourism minister Pedro Novais, who this week became the fifth cabinet member to be ejected – four out of five of them for corruption and ethics scandals. Read more

For the past several months, Chilean students have been leading protests demanding free education that have, according to polls, swept the majority of Chilean society behind them.

Sebastián Piñera, the president, has long been perceived as dithering in his handling of the conflict and his failure to push a long overlooked problem to the top of his political agenda until he was forced to do so, has weakened him badly – polls point to current support of about 26 or 27 per cent.

But has he now turned the corner? Read more

WIG index on ThursdayFinally, a bit of relief for CEE banking stocks – which have been taking a beating since this summer.

Shares in banks across central and eastern Europe rose sharply on Thursday after the world’s main central banks launched a concerted action to tackle the dollar funding problems in Europe. Read more

A man with his hands tiedWith so much money whizzing around emerging markets, it’s easy to forget that many investors in the developing world are still tightly bound by capital controls.

Indeed, the contrast between globalised data flows and semi-globalised capital flows has never been greater: EM investors can find international financial information more quickly than ever – but they can’t necessarily do much with it.  As Constantin Vayenas of UBS writes personal capital controls still affect two thirds of the world’s population. Read more

Jacek Rostowski, Polish finance minister, Sept 2011The European parliament is not the kind of place that usually gets pulses racing, but a speech by Jacek Rostowski, the Polish finance minister, in which he cautioned that the collapse of the eurozone could even lead to war, has set off a flurry of commentary in Poland.

In a speech on Wednesday, given in conjunction with Poland’s EU presidency, Rostowski concluded his comments about the growing Greek predicament with an anecdote he said he heard from a banker friend, who told him he was looking for a Green Card to allow his children to emigrate to the US. Read more

Over the past few years, emerging market players have been cutting out the middleman, orchestrating transactions that go directly from Beijing to Lagos with no help from London or Zurich in between.

Now luxury aviation companies are trying to do the same thing, catering to wealthy emerging market entrepreneurs who jet set from Moscow to Abu Dhabi to Ulan Batur and expect to do so in the lap of luxury. Read more

With apologies to Neil Armstrong: It was one small step for a light aircraft; one giant leap for Indian aerospace. That, at least, is what industrial magnate Anand Mahindra would have us believe, as the C-NM5, a five-seater aircraft that he hailed as “our first indigenous effort” made its maiden flight on Wednesday.

But the eurphoria – while understandable – may be misplaced, and not only because there is a big Australian component to the new aircraft’s technology. Analysts say a lack of aviation infrastructure and competitive pricing of road and rail services will hamper the plane’s attempts to break into the as-yet-intapped Indian market for small aircraft. Read more

clockSeven years is a reasonably long time to run one of Europe’s biggest companies. But it was still rather a strange moment for Martin Roman to quit as ceo of CEZ, the Czech electricity group.

Roman has told the Czech press he is planning to leave the job – at a time when CEZ has suffered a profit decline, is undergoing  EU and central bank investigations and is planning a future strategy announcement. But he won’t be going very far – he’s likely to take over as chairman of the CEZ supervisory board. Read more

* Wen sets preconditions to help Europe

* Cairn progresses in sale of $6.5bn stake

* DuPont wins $919m in suit over Kevlar secrets

* Infosys closes in on $700m foreign acquisition

 Read more

A €435m  vote of confidence in one of Europe’s more vulnerable economies. Erste Bank, the Austrian group that has invested extensively in central and eastern Europe, has announced plans to buy out most of the minority shareholders in its Romanian subsidiary – Banca Comerciala Romana.

With CEE battered by the storms coming from the eurozone, the deal could not have come at a better time for Romania which is trying hard to compete for foreign capital with the more advanced economies of the region, headed by Poland, the Czech Republic and Hungary. Read more


William Ackman (left), founder of hedge fund Pershing Square Capital Management, has placed a bet that would profit if Hong Kong severs its 28-year-old peg to the US dollar.

The headline-grabbing move plays into the current debate about whether Hong Kong should rethink the mechanism that links its currency to the US dollar at a rate of HK$7.80 to US$1. Read more

Thursday’s top picks from the beyondbrics team: why there will be no free Chinese lunch for Europe; what to expect from India’s core inflation and surging imports; and why Mexicans need to be careful about their tweets. Read more

scotchTaiwanese drinkers have long had a liking for foreign spirits as rice wine, the island’s national brew, is more often used for cooking than drinking. They have a particular affinity for Scotch whisky – so much so that Taiwan is now one of its top five export markets. Read more

Given China’s love affairs with global luxury brands and homegrown social media, it’s no surprise that the former should use the latter. The surprise is who does it best.

L2 Thinktank, an industry group which researches digital advertising, has taken a closer look at the ‘social engagement’ of 100 international brands and ranked them accordingly. The winner is Audi, followed by Burberry, BMW and Volvo. In fact seven of the top ten are carmakers. Read more

* Wen sets preconditions to help Europe

* Cairn progresses in sale of $6.5bn stake

* DuPont wins $919m in suit over Kevlar secrets

* Infosys closes in on $700m foreign acquisition Read more

India band-wagonIndia has preferred to skirt the issue of reserve currencies to rival the dollar, generally viewing the US currency as irreplaceable in the near term.

The top policymakers in Asia’s third largest economy have considered China’s promotion of the renminbi as a possible alternative as opportunistic and unhelpful at a time of global financial instability.

That may be changing. Read more

Tan Thanh market 2009Although some quixotic Vietnamese patriots like to talk about boycotting “inferior” Chinese goods, Vietnam can do little do to stem the tide of imports from its huge, powerful northern neighbour.

That much was clear from a visit to the sprawling Tan Thanh market, located in Lang Son province, northern Vietnam, just a few metres shy of the border with China’s Guangxi province. Read more