Argentina: closing the door on foreign landowners
Two months after launching an ambitious agricultural modernisation strategy aimed at attracting farm investments, Argentina’s congress has voted to cap an important source of capital for innovation: foreign land owners. Continue reading »
Brazil: Dilma made out of Teflon
Brazil’s president Dilma Rousseff must have a non-stick coating. A study released on Friday by the National Confederation of Industry (CNI) found that her personal approval rating remains at 72 per cent compared with 71 per cent in September. This comes in spite of or maybe because of her loss of six ministers to corruption scandals this year.
“The president has managed to shield herself. The allegations of corruption were restricted to her ministers,” said CNI’s executive manager of research, Renato da Fonseca. Continue reading »
Chevron in Brazil: one messy oil spill
Compare and contrast the following oil spills:
The Gulf of Mexico disaster last year released 4.9bn barrels of oil into the sea, killed 11 people, and caused extensive damage to the local coastline, and fishing and tourism industries. BP, the operator of the well, booked more than $40bn in losses as a result.
Last month, less than 3,000 barrels of oil spilled from Chevron’s Frade field off the coast of Rio de Janeiro, killing no one and causing no visible impact to the local coastline. Chevron is being sued, jointly with rig operator Transocean, for R$20bn ($10.6bn) and both companies face being kicked out of Brazil. Continue reading »
No holiday cheer for Poland’s top copper miner
Traditional copper ornaments may look great on a tree, but a portfolio that includes Polish copper miner KGHM won’t be bringing much joy for investors this Christmas as the details of the government’s new mineral tax became clear this week.
The cash strapped government is determined to keep public debt from passing a self-imposed legal threshold of 55 per cent of gross domestic product, and in order to that it plans to hit mining companies – mainly KGHM – with a new mining tax. Continue reading »
Russia finally joins WTO
Russia was formally, and finally, admitted into the World Trade Organisation on Friday, 18 years after negotiations began. Russia was the world’s last major economy, and the only Bric, remaining outside of the organisation.
It began negotiations to join the WTO in 1993 when Boris Yeltsin was in the Kremlin and, even by the WTO’s normally slow standards, its progression has been painfully drawn out. Continue reading »
Hungary v IMF: another row
By Kester Eddy and Stefan Wagstyl
Once again, Hungary has shot itself in the economic foot. Budapest was on Friday trying to limit the damage after a visiting International Monetary Fund/European Union mission cut short talks on a Hungarian bid for financial support.
The visitors walked out in protest at a proposed central bank law which critics say threatens its independence. That’s a no-no for the IMF/EU – and the sight of the mission high-tailing it for the airport had Budapest saying it would “incorporate” their suggestions into the bill. Continue reading »
Two of Argentina’s exchanges, Rofex and the Rosario stock exchange (MervaRos), have agreed to merge as consolidation continues to sweep Latin America’s bourses.
Rofex, or Mercado a Término de Rosario, is one of the country’s two futures exchanges and specialises in commodity futures. It is based in the city of Rosario, northeast of Buenos Aires, where there is also a stock exchange named Mercado a Término de Rosario (MervaRos). Continue reading »
Fund flows: a slow bleed
As expected, emerging market funds continued to haemorrhage capital this week as investors looked to cut risk exposure at year’s end. EM investors’ aggressive risk-off mode wasn’t helped by a limper than hoped for European summit and the European Central Bank’s subsequently weak market interventions. Continue reading »
A hiccup at the launch of Asia’s biggest law firm
The merger of Chinese law firm King & Wood and Australia’s Mallesons Stephen Jacques— approved by partners last month and announced officially this week— hasn’t come without some hiccups.
John Shi, Mallesons’ chief representative in Beijing since 2004, and another partner are leaving for a rival firm. And other competitors may be interested in poaching more of their former colleagues. Continue reading »
Vietnam: looking vulnerable
As the economic outlook in the US and Europe deteriorates by the day, investors are asking which countries in southeast Asia would be hardest hit by the knock-on effects of a double-dip recession.
Leif Eskesen, a regional economist at HSBC in Singapore, reckons that Vietnam, which is going through an extended financial crisis of its own, is the most exposed to a downturn by some way because of its reliance on foreign trade and investment, weak corporate balance sheets, troubled banking sector and poor fiscal position. Continue reading »
New York headlines
* IMF chief warns over 1930s-style threats
* Indonesia passes land bill
* BP accepts $250m Gulf spill settlement
* Sino-Forest faces battle with bondholders Continue reading »
Chart of the week: Russian air safety
As economies grow, so does their need to move goods and people about – by road, rail, and of course air. But with transport comes safety concerns. Where is it safest to fly among in EMs? And is Russia as dangerous as many stories this year have suggested?
Chart of the week looks at the safety records of some of the bigger emerging markets. It’s not as clear cut as you might think. Continue reading »
Further reading: highs and lows
Friday’s top picks from the beyondbrics team: Lex on Chevron’s Brazilian fine and the tightrope Delhi’s decision makers are currently walking; Sino-Forest’s battle to avoid the biggest corporate default in Asian bond market history; Philip Stephens on the highs and lows of democracy; and why American business is not reaping the benefits from Iraq’s reconstruction. Continue reading »
India: RIL argues, BP has to wait
In July, when the Indian government approved BP’s $7.2bn purchase of a 30 per cent stake in big natural gas fields owned by Reliance Industries, it was thought that the British group’s deepwater expertise would help India build up production that had failed to live up to expectations.
But nearly six months later, output at the largest field – Krishna Godavari D-6 - has hit an all-time low, with gas pumping out at a daily rate of just over half of what Reliance originally envisaged. And BP’s technology has yet to be unleashed, as Reliance finds itself locked in a financial dispute with the government. That’s bad for India and bad for its reputation with foreign investors. Continue reading »
Indonesia land bill: an open road
After a year of argument, Indonesia’s parliament on Friday passed a controversial land acquisition bill designed to accelerate the purchase of property for government infrastructure schemes.
Even though the decision was expected, investors cheered the news with a 1.8 per cent jump in Indonesian stocks, with property companies and toll road operators leading the way. It won’t remove the country’s traffic jams overnight, but it should eventually pave the way to the building of modern transport networks. Continue reading »
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