Daily Archives: Nov 25, 2011

Brazil’s central bank has released figures for October showing the highest vehicle loan default rate in two years. As reported by Bloomberg:

Default rates on cars, motorcycles and trucks in October rose to 4.7 per cent, the highest since September 2009, compared with 3.1 per cent a year earlier and 4.4 per cent in September, the central bank said Nov 23. Loans that were 15 to 90 days overdue increased to 8.6 per cent from 7.9 per cent a month ago.

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Colombia’s first interest rate hike in four months puts it out of step with many central banks in the region, which have been holding or loosening monetary policy.

The 25 basis point increase to 4.75 per cent comes as inflation tops the Central Bank’s 2 to 4 per cent target range at 4.02 per cent. Read more

It’s pretty tough to track the trajectory of a ricochet, which is one of the reasons Poland’s central bank is having a difficult time stabilising the course of the zloty as Poland is buffeted both by Hungary’s recent downgrade and by Germany’s continuing indecision over whether it wants to make the painful sacrifices needed to save the euro.

The zloty crossed the psychological threshold of 4.50 to the euro on Friday, and dropped to below 3.41 to the dollar despite surprisingly strong data on retail sales and unemployment. Read more

In the 20 years since India started liberalising its economy, foreign companies have not been able to take full advantage of the country’s incredible growth story (which, admittedly, has taken a few licks lately).

From the sorry state of India’s roads, reservoirs and electricity grid, to a paperwork-addicted bureaucracy renowned the world over for its density, to archaic laws limiting foreign investment, the Indian government has simply made it very difficult for foreign companies to do business on the subcontinent. But if recent events are any indication, it might just be getting easier. Read more

It’s risk-off everywhere at the moment and EM funds are no exception. Investors are looking for safety, spooked by the eurozone crisis, turmoil in the middle east and the prospect of slowing growth in China.

EM local currency bonds, which not long ago were being viewed as near haven assets, are off the menu and the move into traditional safe-havens is on. Read more

The eurozone crisis may be shaking western Europe, but businesses in central Europe are still doing relatively well – in large part thanks to their cheaper labour and often nimble companies, and to the boost that many CEE exporters have received from the steep fall in local currencies relative to the euro.

Wojciech Wlodarczyk, the head of the Polish branch of G-Tech, a US company that builds networks for national lottery companies, says that his operation could be affected by a general drop in spending in the eurozone, but for now he is unaffected by the crisis. Read more

By Luis de la Calle

The absence of any real progress at the recent G20 summit is a wake-up call to policy makers. They should jettison the sprawling agenda that has come to typify the group and focus exclusively on one goal: to defend and deepen globalisation.

That is not an easy or necessarily popular endeavour. Economic adjustment has helped produce a chorus of voices against open markets as western democracies go through painful and protracted adjustment programmes, and at great social cost. But the answer to the world’s problems is more globalisation, not less. Read more


Gazprom is tightening its grip on Europe’s gas pipelines. After opening the new Baltic Sea link to Germany earlier this month,  the Russian state-controlled group has announced it’s taking total control of the Belarus pipeline that runs from Russia to the European Union.

Gazprom is lifting its stake in Beltransgaz to 100 per cent by buying the cash-strapped Belarus state’s 50 per cent for $2.5bn – following years of bitter arguments with Minsk.  It’s a triumph for Gazprom and Russia. However,  it’s a mixed blessing for the EU: Russia/Belarus disputes may end, but only at the price of greater dependence on Russia.  Read more

Foreign supermarket giants have been salivating for years over the possibility of India’s $450bn market opening up to international retail chains.

On Thursday night, they got their wish, as the country’s cabinet, in one of the most radical pro-liberalisation moves in years, decided to allow 51 per cent FDI in multi-brand retail (hello Walmart, Tesco and Carrefour), and 100 per cent in single-brand retail – opening the door for Ikea and others.

So far so good. There are still other hurdles though. Read more

* India opens doors to supermarket giants

* Ex-Egyptian PM asked to form cabinet

* CIC may give ‘indirect’ support to Europe

* Hungary downgraded by Moody’s Read more

Striking in 2008

By Christian Oliver and Song Jung-a in Seoul

Hyundai Motor’s share price fell more than 3 per cent on Friday thanks to the reappearance of its once obstreperous union.

The big issue is whether scrapping the night shift at Ulsan, the main factory, is going to slice output at South Korea’s top carmaker. Globally, it won’t have the impact that it would have done a few years ago, since Hyundai is expanding overseas production in newer plants in the US, China, Brazil, Russia and India. But it’s still a management headache. Read more

Friday’s top picks from the beyondbrics team: Lex on the Hungary-shaped manacle clamped to Austria’s banking system; Philip Stephens on why the term ‘Brics’ no longer applies; why Bahrain is at a crossroads; the need for Egypt’s army to return to its barracks; and a rising tide of discontent facing Russia’s rulers. Read more

Just at the point where eastern Europe faces a banking crisis, a Hungarian credit downgrade and the possible default of its neighbours, a friendly arm has been extended from China.

East meets east – the cover story of China Daily’s latest weekly magazine - comes across as something of a love letter to eastern Europe. Read more

The Budapest stock market plummeted over 4 per cent on Friday following Moody’s move to cut the country’s credit rating to junk.  At 16,268, the Bux index was down over 33 per cent from its April peak and 24 per cent down on the year. Read more

Thousands of Indonesians thronged the upmarket Pacific Place mall in central Jakarta on Friday waiting for the chance to buy the new Blackberry Bold 9790 smartphone – at its global debut.

By lunchtime, in scenes resembling a rock concert, several women fainted in the crush and five ambulances were parked outside. Traffic snarled on the city’s main thoroughfare, Sudirman. Police, fearing a riot, used a megaphone to announce the sale was over. Read more

Russia left its benchmark interest rate alone on Friday for the second month running as the central bank stayed its hand in the face of the competing pressures of domestic inflation and global economic uncertainty.

The bank held its refinancing rate at 8.25 per cent, having already increased it twice this year.  The overnight repo rate stayed unchanged at 5.25 per cent and the overnight deposit rate at 3.75 per cent. Read more

The Hungarian forint plunged on Friday after Moody’s stripped the country of its investment-grade bond rating late on Thursday for the first time in 15 years and cut it to junk.

Even though the news was hardly a surprise, given the flaying Hungary has received over its economic policies in recent months, the HUF fell 1.5 per cent against the euro to 316.46. It’s now lost almost all the ground it gained on its decision last week to turn for help to the International Monetary Fund. Investors clearly still aren’t convinced about Budapest’s economic direction. Read more

Another round of talk in Mumbai that the long-awaited launch of a market for credit default swaps is imminent, despite concerns that the products helped exacerbate the both the 2008 global financial crisis and the current eurozone turmoil. Read more

Picture: Konecranes Plc

When you’ve just been asked to build the world’s biggest gantry crane, and your order book is at it’s second fullest ever, it may seem odd that your share price has halved in a year.

But that’s the situation Pekka Lundmark, chief executive of Konecranes (KCR1V:HEX), finds himself in. The main reason? Next year is looking bleak, and emerging markets aren’t going to help. Read more

* India opens doors to supermarket giants

* CIC may give ‘indirect’ support to Europe

* US blocks key fund in climate agreement

* Chow Tai Fook IPO to raise up to $2.8bn Read more