US-China: comrade, can you spare some FDI?
Here’s an idea for all those cash-strapped US states looking to fill their coffers and create jobs: head to China.
According to Reuters, governors from Washington, Hawaii, Georgia, North Carolina, Guam and the Northern Mariana Islands are currently in Beijing, hobnobbing with officials and making their best cases for Chinese investment in an effort to inject a much-needed boost to their foundering economies back home. Continue reading »
[snap] Brazil cuts interest rates, again
Brazil’s central bank has cut its policy interest rate to 11.5 per cent a year from 12.0 per cent, as widely predicted.
In a brief statement the bank said it understood that “by mitigating the effects of a more restrictive global environment, a moderate adjustment in the level of the base rate is consistent with a scenario of convergence of inflation to the target in 2012″.
Argentina: trying, but failing, to put the brakes on capital flight
Argentines, well known for having little faith in the banking system, have been increasingly falling over themselves to get their money out of the country. Now the price they have to pay has more than doubled this year to 5 per cent.
One exchange bureau in Buenos Aires confirmed that it was now charging a flat fee of $80 plus 4.80 per cent of the amount to be sent abroad. “It’s this year that the charge has shot up,” a source there said. Continue reading »
Chávez’s TV wars
In Venezuela’s perpetually politically charged climate, it is easy to find those willing to bash the government. This popular pastime of Venezuela’s chattering classes was given more ammunition to work with this week after an opposition television network was fined $2.1m and the Supreme Court ruled that a popular politician is able to run for president but not hold office if he wins. Continue reading »
EM bonds: roaring back to life
Emerging market debt was one of the last shoes to drop when Europe’s simmering sovereign debt crisis once again turned into a full-blown panic this summer, but when it finally did, it landed with a thud.
The yield of JPMorgan’s benchmark emerging markets debt indices shot up from 5.46 per cent in early August to a one-year high of 6.39 per cent at the start of this month, and corporate issuance in September shrivelled to the lowest since at least January 2010.
However, emerging market bonds have rallied markedly this month, and issuance is once again picking up, with a flurry of deals on Wednesday. Continue reading »
Egypt: downgraded
Standard & Poor’s decision on Tuesday to cut Egypt’s credit ratings a notch has come as no surprise to analysts observing the country’s opaque and turbulent political transition.
S&P cut Egypt’s foreign-currency rating to BB-minus from BB. The local-currency rating was cut by two notches, to BB-minus from BB-plus. All the ratings have a negative outlook. Continue reading »
Brazil: another rate cut in the cards
What else would you do if inflation persistently comes in above target? Cut interest rates, of course. Brazil’s central bank certainly likes to keep everyone guessing these days. Policymakers shocked the market at the last rate-setting meeting in August by slashing the country’s benchmark interest rate by 50 basis points.
Twelve-month inflation has steadily risen above the 6.5 per cent limit of the central bank’s target since April this year. The logical thing to do, economists had all wrongly assumed, was to at least hold rates. However, it seems that the market is more in tune with the bank’s thinking this time. Continue reading »
Mexico: adventure tours for “gringos”
Mexico this week hosts the Adventure Travel Trade Association’s annual summit in San Cristobal de las Casas, a quaint colonial-era town that acquired world fame in the 1990s as the launch pad for the short-lived Zapatista armed uprising.
Hundreds of government tourism-board officials from Jordan to Namibia, as well as adventure tour operators from dozens of countries, have descended on the cloud-covered San Cristobal to participate in what has become one of the industry’s most important business-to-business forums.
For Mexico, which has branded 2011 as the year of tourism, the summit comes at an important moment as the country pushes to rebrand itself internationally as not just a “sun and beach” destination. Continue reading »
Macedonia-Greece: sharing borders, names and problems
While Greece agonises over slashing wages, its neighbour to the north has suffered a large share of the resulting pain.
Macedonia – the former Yugoslav republic, that is – has this week closed border crossings with Greece after repeated disruptions and re-routed all traffic through other countries instead. Before the Macedonian government took the decision, strikes by Greek customs officers left cross-border travellers and numerous cars and trucks stranded on one of the main Balkan access routes to the sea. Continue reading »
Ghana: lies, damn lies and estimates
New oil, Chinese investment, stable government, highest growth in the world: Ghana is a new success story. But be careful with the exact figures.
While all countries revise their GDP numbers and other accounts, Ghana’s revision of the data takes some beating. The Q2 GDP figure was reported in September as 33.5 per cent. The new figure? 16.4 per cent, less than half. Other numbers given for individual sectors are even further reduced. Continue reading »
The EBRD has downgraded central and eastern European growth forecasts on worries over eurozone exposure. Lex’s John Authers and Vincent Boland discuss the threat the eurozone poses to the region and whether investors are realistically pricing in all the risks. View after the break. Continue reading »
S Africa: inflation up, will rates follow?
South Africa’s inflation rate edged up to 5.7 per cent in September from 5.3 per cent the previous month.
The rise, which puts headline CPI ever closer to the top end of the band targeted by the Reserve Bank, could fuel more speculation about whether there will be an interest rate cut before the end of the year. Continue reading »
Argentina: which Cristina will win?
Bloomberg
Argentina faces a fork in the road after Sunday’s elections, in which Cristina Fernández, the president, is expected to win a second term by a landslide. What voters won’t know until later is whether Fernández will chose economic rationalism – which many economists say is the only way to underpin sustainable growth – or plough on with her favourite brand of economic radicalism.
For investors, the two paths would take Latin America’s third-biggest economy in very different directions: a return to the international financial fold and respectability on the one hand; a continued reputation as an investment risk on the other. Continue reading »
India: 2 wheels good, 4 wheels bad?
India’s love of the car is not necessarily unconditional. Shares of the country’s largest motorcycle manufacturer, Hero MotoCorp, opened up 4.31 per cent Wednesday after the company announced record results for the quarter ending in September.
The exceptional performance could be attributed to India’s high interest rates and petrol prices, which have caused potential car buyers to move to the less-expensive, more fuel-efficient two-wheeler alternative. Continue reading »
New York headlines
* China sells US Treasury debt amid strong haven demand
* Malaria vaccine trial shows promise
* Moody’s cuts Spain’s sovereign rating
* EU growth funds fail to reach poor countries
* SAB Miller in $1.9bn CEE beer deal Continue reading »
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