Daily Archives: Nov 18, 2011

So Brazil is well-positioned to resist any external shocks, isn’t it? After all, the economy is still growing reasonably fast. The planning ministry just revised its growth forecast for this year to 3.8 per cent from 4.5 per cent – but this is still a very respectable number and in line with long-term trends.

So why do we get the feeling that the government does not share our confidence? Read more

While Brazil looks forward to its future as an agricultural power, many of its rural areas continue to be marred by violent conflicts over land that have continued unchecked from one decade to the next. Read more

It could have been an opportunity to crow about the eurozone crisis. But Vladimir Putin was in a friendly mood when he met François Fillon, his French counterpart, on Friday for talks aimed at expanding Russia’s business ties with Europe’s second biggest economy. Read more


Shame on Vitro, Mexico’s biggest glassmaker. At least that is one of the conclusions of a hard-hitting new paper published by US-based Centre for Strategic and International Studies (CSIS) this week. Read more

Russia is now officially the largest internet market in Europe, taking over from Germany (as reported on beyondbrics earlier this week).

But is there room for more growth? And how does it stack up against its Bric peers? Chart of the week delves into the numbers to find out. Read more

Hungary’s forint gained steadily on the foreign exchanges on Friday as investors concluded that Budapest was serious about talking to the International Monetary Fund.

But there are so many unanswered questions about its proposals for a “new type” of cooperation that the market rightly remains cautious about where it will all go. On late Friday, Budapest time, the forint was 1.2 per cent up against the euro at 304.2, extending its weekly gain to 2.6 per cent. Read more

Nearly three years ago, the financial sector in central and eastern Europe secured a big confidence boost from a low-profile lobbying campaign called the Vienna Initiative.

The European Bank for Reconstruction and Development, together with the much bigger guns of the European Union and the International Monetary Fund, successfully persuaded the international banks active in CEE banking (outside Russia) not to rush for the exits. Now, Erik Berglof, the EBRD’s chief economist, thinks CEE needs Vienna 2.0. Only this time, it will be much more difficult. Read more

Poland’s premier Donald Tusk has given ratings agencies and market watchers pretty much everything they were asking for in his maiden speech to parliament on Friday.

Painting the “dramatic and unsettling” economic dangers lurking for Poland and the European Union in very dark terms, Tusk promised to tackle issues that he had avoided during his first four-year term in office. Read more

Latin America is not immune to the world’s troubles and its economies are likely to suffer slower than expected growth in the coming few years. However, slowing growth means falling inflation and that should allow LatAm policy makers the kind of scope for policy stimulus that would make developed world politicians green with envy.

Capital Economics, in a note released on Friday, argues that as growth slows, every country in the region bar Ecuador, Venezuela and Argentina should have room to loosen monetary policy and thereby limit the length and depth of the coming slowdown. Read more

The drift back into EM funds stalled this week, after four consecutive weeks of inflows. Why? It’s the eurozone, of course. Investors need more clarity after Italy has moved centre stage.

According to data from EPFR, the fund flow monitor, EM fixed income funds saw just $21m come in, whereas EM equity funds saw $183m flow out. Read more

When you are trying to persuade people to vote for you, words will only get you so far. Money is usually a whole lot more persuasive.

This has clearly not escaped Hugo Chávez, Venezuela’s president, who thanks to his control over PDVSA, the state oil company, has access to a good deal more money than most politicians in the region.

And even though there is still a year to go until Venezuela’s presidential election, his government is already ramping up spendingRead more

The Sphinx at Giza. Getty ImagesEgypt’s interim government has done the sensible thing and agreed “in principle” to go for the $3bn International Monetary Fund loan that was rejected earlier this year.

In the face of soaring domestic borrowing costs and dwindling foreign exchange reserves, ministers had little choice. But, worryingly, they still seem to be in no hurry, with deputy prime minister Hazem El Beblawi saying the government was “considering the right time”. Read more

* Housing prices fall in Chinese cities

* US deficit ‘supercommittee’ hits impasse over tax

* Huawei, ZTE face US intelligence probe

* RBI warns over bias in bank system Read more

Investors, apparently, weren’t convinced by embattled billionaire Vijay Mallya’s assurances on Thursday that he was closing in on a number of deals that would save his debt-ridden Kingfisher Airlines: the company’s stock was trading down 15 per cent from Thursday’s close during early trading on Friday.

But India’s second-largest carrier by market share isn’t the only airline whose finances are being questioned. Read more

The forint marked time on Friday as investors awaited details of the country’s proposals for a new IMF deal.

The HUF, which leapt over 2 per cent against the euro on Thursday when Budapest announced plans to start talks with the Fund about an “insurance” agreement, slipped 0.43 per cent lower as officials met an IMF mission that happened to be in Hungary on a routine visit. With Hungary and the Fund at loggerheads for months over Budapest’s economic policies, the negotiations won’t be easy. Read more

Friday’s top picks from the beyondbrics team: Lex on SABMiller’s balancing act between booming emerging markets and its more mature operations, and the ongoing travails of Bumi Resources; the problem’s within China’s banking system; the enormous challenge facing a ruined Libya; the comparisons between Vladimir Putin and Silvio Berlusconi; and Robert Zoellick on why China shouldn’t save Europe. Read more


There must be sighs of relief all round at Lone Star, the US private equity fund, now that it can finally sell out of Korea after regulators on Friday ordered it to dispose of its controlling stake in Korea Exchange Bank within six months. Read more

By Benoit Anne of Société Générale

Let’s step back from the events of Thursday in Budapest, when Hungary’s economy ministry claimed to be in discussion with the IMF on a new type of programme – only for the IMF to deny the whole idea.

A few conclusions here. First, relations between the IMF and the Hungarian government were tense to begin with. You can be sure that, after such an incident, they are not going to get any better. Read more

* Pakistan memo puts pressure on Zardari

* Hungary to seek IMF help as debt costs rise

* Huawei, ZTE face US intelligence probe

* China trade surplus may be wiped out Read more

When there’s a financial crisis, not many investors want to be long on banks. But is that true for all markets?

Bank shares around the world this year have moved pretty much in tandem, as hopes early in the year of a global recovery have given way to fears of a new recession driven by the eurozone crisis. Is there any glimmer of hope? And how does this compare to the dark days of 2008-09? Read more