Daily Archives: Nov 14, 2011

Escalating anti-mining protests are shaping up to be the defining challenge facing Ollanta Humala, Peru’s president.

While Humala was busy preaching his message of “social inclusion” at the Apec summit in Hawaii last week, his prime minister, Salomón Lerner, was dealing with the fallout of yet another protest that got out of hand. Read more

The techs at Brazil’s central bank have come up with a bizarre combination of simultaneous easing and tightening.

To be precise, policymakers cut back banks’ capital requirements for auto, personal and payroll loans with maturities of less than five years. But they also ordered banks to put aside more cash for loans of over five years. Read more

At the currency exchange booths in the Arena Plaza, one of Budapest’s shiniest new shopping malls, the forint middle rate was around Ft310 to the euro on Saturday, its lowest for well over two years.

Yet a healthy-looking crowd wandered the aisles between the branded stores and the central refreshment area at lunchtime teemed with people, punters needing to queue to find a table. The scene contrasted starkly with reports of hard economic times in Hungary, with tens of thousands of families struggling to repay foreign currency mortgages. Read more

In a day to forget for Hungary, the forint has reached its lowest level ever against the euro, trading at Ft317.6 and breaking its previous record of 317.45 in March 2009. Read more

The moment Mail.ru and Yandex investors have been waiting for has arrived: Russia, at long last, has finally surpassed Germany to become the largest internet market in Europe.

According to comScore, the research firm, Russia had 50.8m internet users in September versus 50.1m users in Germany. And, luckily for those who bought into Russian internet stocks such as Mail.ru and Yandex at sky-high valuations, the market still has a lot of growth left. Read more

In the wake of an October that saw the Indian auto industry post its worst car sales month in almost a decade, Tata Motors’ quarterly results on Monday were a reminder that there are two car areas that are doing just fine, thank you: commercial vehicles and luxury. Read more

India is the world’s shop-theft hotspot according to the 2011 Global Retail Theft Barometer, the largest survey of retail crime and loss in the world.

India tops the global list of retail theft by country with 2.38 per cent of its retail value being lost to thieves and error. Russia sits in second place with a marginally more respectable 1.74 per cent while Brazil comes fifth. China, to its credit, came 37th with a tiny 1.1 per cent. Read more

By Neil Munshi and James Fontanella-Khan

Is it time for the ‘King of Good Times’ to come down to earth?

Or will India’s government swoop in to save his majesty from some decidedly bad times? Read more

Forget about Lewis Hamilton, the broadest smiles at this weekend’s Abu Dhabi Grand Prix were on the taxi drivers’ faces.

“All Abu Dhabi is money,” said one driver as he grinned at the 20Dh ($5) starting fee on the taxi, five times the usual fare. For those who had managed to sneak into the main area, they could negotiate up to 50Dh for a short journey. Read more

Hungary is having a very bad Monday. Its equities are tanking, its bond yields are jumping, its currency is approaching dangerously weak levels and it has been forced to scrap a planned debt sale due to low demand. And all this after a Friday which saw Hungary’s headline Bux index gain 4.4 per cent in what analysts told beyondbrics was a “rally based on nothing”.

What changed? Well, ratings agency Fitch revised Hungary’s rating outlook to negative on Friday night, reminding investors of the very real possibility that the big three ratings agencies will downgrade the country’s debt to junk in the very near future. Read more

Bank of America has announced it has reached an agreement to sell about 10.4bn common shares of China Construction Bank Corp through private transactions with a group of investors to bolster its capital base. The sale is expected to generate about $6.6bn. Read more

If there’s economic growth, there should be earnings growth. Right? Not necessarily, says Citigroup’s Markus Rosgen.

While Asian economic growth has astounded the world in the past two decades, Asian earnings growth has not, at least not on an earnings per share basis.  Annual eps growth since 1990 has been 7.9 per cent in Europe, 7 per cent in the US and 6.8 per cent in stagnation-hit Japan. But Asia excluding Japan – the growth engine of the world in GDP terms – has seen earnings growth of just 4.7 per cent. For China, it is only 2.2 per cent. Why? Read more

* Italy races to install Monti government

* Kurds talk to two more oil groups

* Obama pushes Pacific trade agenda at Apec

* Boeing secures record Emirates deal Read more

Make a quick judgment call: how much political risk should investors price into Middle Eastern credit? Bear in mind: three governments have fallen this year, Syria is slaughtering civilians while slowing going broke, Israel is rattling its sabres (and its F-16s) against Iran, Bahrain is still cracking down on its own uprising, and Shia in Saudi Arabia’s oil-rich East have held their own protests.

So, what geopolitical risk premium are investors demanding to hold Israeli, Lebanese, Turkish and other regional credits? According to Citi’s analysts: none. Could that really, they ask, make any sense? Read more

The Reserve Bank of India’s job isn’t getting any easier. While most other central banks are either easing or considering easing in response to the dire news from the eurozone, Indian inflation remains stubbornly high at a fraction below 10 per cent. Read more

The news that fast-growing airline Emirates will buy 50 Boeing 777s for $18bn – with options for a further $8bn-worth – has set the tone at the start of the Dubai air show.

But as the FT reports on Monday in an aerospace special report, the Gulf is not only where the show is – rival airlines from the region are the hot growth prospects for the whole industry. Read more

By Jerome Booth of Ashmore Investment Management

Why is it that when we have the most serious imbalances, macroeconomic risks and policy confusion in the US and EU in living memory, we are still blinkered to the role emerging markets have in reducing risk?

In particular we suffer from what I call core-periphery disease.  I call it a disease because it is not merely an idea but a deep-seated and insidious meme (an intellectual virus with self-replicating characteristics) lodged firmly in the brain.  It is the idea that the core (the developed world) affects the periphery (emerging markets) but that we can ignore the importance of the emerging world for the developed world.  That is not only ethnocentric: it is no longer the world we live in. Read more

Monday’s top picks from the beyondbrics team: Alan Beattie on why SDRs are not the answer to the eurozone’s problems; Lex on Repsol’s Argentinian dependency; the FT on the friction between Nathaniel Rothschild and Ari Hudaya, Bumi’s chief executive; and struggling Indian airlines asking for government help. Read more

* Italy races to install Monti government

* Kurds talk to two more oil groups

* Obama pressures China on Yuan, property rights

* Boeing secures record Emirates deal Read more

As an astute buyer of companies, the Philippines’ San Miguel Corp (SMC:PHS) has considered crisis its constant companion, counting on it to create acquisition opportunities in an ambitious bid to diversify from its core food and drinks business.

Now, it is finding that crisis can also be a fickle friend that might block opportunities for selling and taking profit. Read more