Cemex Venezuela: we’re outta here
The $600m compensation agreement that Cemex finally reached with Venezuela’s government after its subsidiary was nationalised may be less than it wanted, and it may have taken the best part of four years. But at least it’s all over. Continue reading »
Chile’s central bank: contagion is here
With eurozone contagion now being felt in Chile and the country’s terms of trade deteriorating, the time is approaching to cut interest rates.
That is the clear message from José De Gregorio, the central bank president. As he wrote on Wednesday: “The situation in the advanced economies is complicated and in Europe it is very serious. In this context, one of the possibilities is that we may need a bigger monetary push than at present.” Continue reading »
CEE markets wrap: there’s a contraction coming
Some central and eastern European economies have held up better than others during the Great Contraction. Until recently Poland and the Czech Republic were two of the region’s brightest spots. Unfortunately, Thursday’s purchasing managers’ indices suggest that may be coming to end.
PMIs from Poland and the Czech Republic dipped into negative territory for the first time since October 2009, according to Markit, a financial information services company. Poland’s fell to 49.5 while the Czech Republic’s fell to 48.6 – any number below 50 denotes a contraction. The markets did not take the news well. Continue reading »
Brazil’s success – an optical illusion?
The inexorable climb of a latent global superpower: last year, Brazil’s economy outstripped Italy’s for the first time; this year, it will be bigger than the UK’s. So crowed local Brazilian newspapers recently. But how much of this triumph is real, and how much is an optical illusion? Judging by finance minister Guido Mantega’s latest measures to boost the economy, not as real as it might have seemed. Continue reading »
Slovakia: not so flinty after all
Central Europeans are supposed to be the stalwart belt-tighteners of the European Union. Witness Latvia’s grim acceptance of tough economic times, which even saw the government re-elected after presiding over brutal cutbacks. But patience at last appears to be wearing thin, as can be seen by a doctors’ protest in Slovakia. Continue reading »
Egypt’s reserves dip ever lower
Egyptian markets are going through a rare bright spot following a peaceful start to parliamentary elections on Monday. But with reserves forecast to hit just $15bn by the end of January, according to the head of Egypt’s military financial authority, that is a very thin silver lining on an increasingly dark cloud. Continue reading »
[snap] Kenya hikes by 150bps
Kenya hiked its policy interest rate by 150bps to 18 per cent a year on Thursday as it intensified its fight against inflation, which hit 19.7 per cent in November. This is the central bank’s fourth consecutive interest rate increase and brings this year’s cumulative increase to a whopping 1100bps. Continue reading »
Wenzhou, engine room of Chinese low-cost manufacturing, running out of fuel
Wenzhou’s low end manufacturers are struggling with tightening credit and rising costs. Are problems in the eastern city a litmus test for the rest of China?
India: a little good news, a little bad
When it comes to the Indian economy these days, any good news is welcome.
Amid the pain of lowered GDP growth expectations, a parliament paralysed by protests, underperforming equity markets and a faltering currency, the subcontinent finally saw something to cheer about on Thursday: food inflation, long in double digits, fell for the second straight week. Continue reading »
Brics? It’s Carbs that make you strong
By Kingsmill Bond
Ten years ago the mood among emerging market investors was one of despair. After a series of crises, EM equities had gone nowhere for a decade. All they seemed to offer was risk without reward.
The rebranding of the asset class as Brics was welcome and timed the bottom of the market perfectly. However, the cyclical upsurge in commodities has been so powerful that it has revealed a split in both emerging and developed markets: commodity producers – EM and DM – have outperformed in equities to such a degree that it is time to reorganise our labels. Out with the Brics and in with the Carbs. Continue reading »
China: easing, but this is not 2009
China hit the stimulate button on Wednesday as slowing growth and inflation spurred the government into action – vindicated by Thursday’s negative PMI number.
Beijing’s 50 basis point cut in reserve requirements for all China’s banks was a decisive shift in monetary policy and one that is set to continue into 2012. But confusing this round of easing with the enormous stimulus package unrolled in 2009 would be a mistake. Continue reading »
[snap] Brazil manufacturing contracting but at slower pace
Brazilian manufacturing continued to slow in November according to the HSBC purchasing managers’ index compiled by Markit. The index stood at 48.7 in November – any number below 50 denotes a contraction. But things are less bad than they were in October, when the index came in at 46.5.
China PMI reading ‘a shocker’
China’s purchasing managers’ index has fallen to its lowest level since 2009, suggesting the economy could be slowing rapidly. Ben Simpfendorfer of Silk Road Associates talks about the possible fallout for the global economy and the potential implications of another Chinese stimulus package.
New York headlines
* Chinese manufacturing activity slows
* Stance shift sees China ease monetary policy
* Iran set to dominate EU foreign ministers’ talks
* Brazil joins easing moves with rate cut Continue reading »
Bank Indonesia, how low can you go?
Indonesia’s inflation slowed for a third consecutive month – probably all the justification its central bank governor needs to push lending rates in the booming economy to a record low.
November inflation eased to 4.2 per cent, as markets had expected, to the slowest pace since April 2010, the statistics agency said on Thursday. Continue reading »
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