Daily Archives: Sep 21, 2011

The sorry saga of the downfall of the Caribbean’s largest home-grown conglomerate, CL Financial, is far from over – even if the government of Trinidad and Tobago must be wishing that it was.

A finance ministry official reportedly admitted on Tuesday that the cost of the bailout that began in January 2009 may now rise to more than $3bn, at a time when the twin-island nation is beset by several other equally serious problems. Read more

Now that Lan and Tam have jumped another hurdle to create one of the world’s biggest airlines, more and more passengers are wondering what brand of frequent flyer points will they dole out Read more

In Turkey, gold is a way of life. For example, a Turkish bride often brings an outsize purse to her wedding, all the better for guests to drop gold coins into. (If she’s unlucky, they will pin bank notes on her gown instead.)

But now, it looks like the national interest in the shiny metal could have an impact on the national accounts as well – and just at the right time. Read more

Recently, beyondbrics asked whether the Brazilian real has touched the bottom, when it dropped bellow 1.80 against the dollar for the first time in 13 months.

The answer is: “err, no”. A fresh 15-month low was hit on Wednesday and the bottom is nowhere to be seen. With the investors’ appetite shifting from emerging currencies to more conservative options, such as the dollar and Swiss franc, economists forecast more declines for most of the EM currencies. Read more

Watch out for a possible bust in emerging market corporate debt.

That’s not the language the International Monetary Fund employs but it is one of the warnings contained in its Global Financial Stability Report published on Wednesday. The authors say that while the growth in EM corporate debt is welcome, the rapid pace at which funds have flowed into these assets means there is the potential for “mispricing and a sudden reversal”.  As we said, a possible bust. Read more

Amid spectacular economic growth, Indian efforts to combat the country’s devastating poverty have largely failed. That’s one reason why the Indian government has decided to take a stab at redefining the very definition of the word “poverty”.

In a move widely derided by social scientists and NGOs, India’s main planning commission on Tuesday filed an affidavit with the country’s Supreme Court to update the country’s poverty line, the Economic Times reportedRead more

If you can’t beat them, copy them – or even block them. That seems to be the message to the world’s biggest tech company, Apple, from South Korea and China.

While trying to shore up its store designs in China to stop the proliferation of fake stores, Apple (AAPL:NSQ) is also subject to a blocking move by South Korea’s Samsung over sales of the iPhone 5 in several countries. Read more

Emerging markets – as an asset class – are about to get much more complicated. The days of plonking 10 per cent of your portfolio into an actively managed EM fund and considering yourself ‘diversified’ are over. Investors, and fund managers, need to get wiser.

Those are some of the findings of a recent white paper from BlackRock’s investment think-tankRead more

By Ryszard Petru, chief economic advisor for Demos Europa

Although Poland does not have the euro, its economic future is closely tied to the success of the common currency. Sixty per cent of Polish exports go to the eurozone. A quarter of all Polish exports to go to a single country: Germany.

Poland is a less open economy than the Czech Republic, Hungary or Slovakia, where the relation of exports to gross domestic product is close to 80 per cent. In Poland it is only 40 per cent. Poland’s large internal market makes the difference. Read more

Trucks cross the US-Mexico borderWhich developed economy is as hard to enter as the toughest emerging markets?

The answer, according to a report published on Wednesday by law firm Allen & Overy, is the US. According to a survey of 1004 global business leaders, only China with 21 per cent ranks ahead of the US (19 per cent) in terms of difficulty; Russia comes third with 17 per cent; India, Brazil and South Africa are lower down the list. Read more

Egypt is FreeCzech Pegas, the second biggest producer of synthetic textiles in Europe, is expanding abroad. And the first country the company picked for its FDI premiere is – wait for it – Egypt.

And what is Pegas’s maiden foreign adventure is also – wait for it again – Egypt’s first foreign direct investment since the January revolutionRead more

It always looked like a non-starter. Now the Brics plan to save the eurozone has been buried by the man who launched it only last week.

Europe has to save itself,” Guido Mantega, Brazil’s finance minister, told the Wall Street Journal in an interview published on Wednesday – a message with a different ring to it from the one he sent on September 13: “We’re going to meet next week in Washington and we’re going to talk about what to do to help the European Union get out of this situation.” Read more

SpringbokThe Australian-flavoured centrepiece of Foster’s current advertising campaign may have to change. SABMiller, the world’s second-biggest brewer by volume, of South African origin, has agreed to buy the Australian brewer for A$9.9bn ($10.2bn). Read more

Tesco didn’t get where it is today without good timing.

Wednesday’s news that Tesco (TSCO:LSE) is to hive off 15 of its Thai hypermarket sites into a listed property fund worth some Bt14bn ticks three important boxes for new chief executive Philip Clarke. First, freeing up some of the cash tied up in Tesco’s £35bn ($55bn) global property empire;  next, taking advantage of renewed investor interest in Thailand; and last, reducing some of the company’s vulnerability to legal challenges over its property ownership in Thailand. Read more

* China growth forecasts trimmed by IMF

* Brazil says Europe must ‘save itself’

* Hungary opens FX reserves to banks Read more

Flying high over the GulfMiddle East bankers were on Wednesday mulling the implications of the International Monetary Fund’s latest warning about the state of the world economy.

But they can take comfort from the fact that the Fund was far less gloomy about the region than other corners of the world economy – and generally more positive about growth than other forecasters. Read more

By Mark Shapland of mergermarket

There was a time when China’s growth story was talked about with a sense of awe and disbelief – not anymore. In the stainless steel market China is seen as ‘old hat’ and the hunt for pastures new is firmly on. Read more

Bankers are sharpening their knives over Hungary’s plan to make them swallow losses arising from the government’s scheme to cut their personal clients’  foreign currency debt burden.

The head of the central and east Europe business of Italy’s Unicredit, one of the largest operators in the region, said his bank was considering freezing its Hungarian expansion plans. Meanwhile, the Hungarian Banking Association warned the move would harm the economy – and repeated threats to the take the authorities to court. But prime minister Viktor Orban isn’t going to take much notice. Read more

Wednesday’s top picks from the beyondbrics team:  the Lex column looks at  foreign exchange controls in emerging markets, what makes India different from other Brics and where India’s cabinet ministers put their money (hint: not  the India’s stock market). Read more

Tesco Thailand shopperTesco has long experience of selling off its supermarkets to portfolio investors and leasing back the stores. But, in a novel twist, it announced on Wednesday that it would go for a stock market IPO to sell a 14bn baht ($460m)  retail property fund in Thailand.

It’s a way of releasing capital and highlighting the fast-growing importance of the UK supermarket group’s emerging market businessesRead more