Brazil’s Vale: new and improved?
According to Vale’s new management team, the Brazilian miner has one big resolution for 2012: to become more transparent.
The company’s new chief executive, Murilo Ferreira, and revamped top management have spent the last month flying around the globe, trying to convince investors, analysts and journalists of precisely this. Continue reading »
Ukraine fears new Russian gas route
Turkey’s decision to allow Russia permission to build the South Stream gas pipeline seems to have caused a degree of panic in Ukraine. The agreement, reached on Wednesday, could have significant implications on long-running gas negotiations between the two countries and reduce Ukraine’s bargaining power in extracting much needed price concessions from Moscow.
The South Stream pipeline would see Russian gas exported across the Black Sea to Europe, bypassing Ukraine, whose gas transit network is currently responsible for carrying 80 per cent of Russian energy exports to the EU. Continue reading »
India’s stock market regulator has issued a wake up call to investment banks operating in the country by banning some prominent banks from new listings and warning that it will overhaul the rules governing initial public offerings, according to James Lamont and Neil Munshi of the FT. Read the full story on FT.com
12 for 2012: expect an EM equities rally
This post is the third of a series – 12 for 2012 – that beyondbrics is running on key emerging markets topics for the coming year.
By Jonathan Garner, Morgan Stanley
Since the end of the Asian crisis in 1998, EM equities have been in a 13- year relative bull market compared to DM equities. Total outperformance including dividends has been 215 per cent in US dollar terms.
A year ago we were cautious on the outlook for EM equities in 2011. We warned of a setback as EM policymakers combated overheating and inflation with tighter policy in the context of a market that was slightly expensive to long run average valuations. In 2012 we expect the bull market to reassert itself. Continue reading »
Aldar bailout: day 2
Aldar, Abu Dhabi’s biggest developer, saw it shares jump 9.5 per cent on Thursday on the back of a massive government bailout package unveiled the day before. And Abu Dhabi’s real estate index took confidence too, bouncing some 7.5 per cent .
On Wednesday, Aldar announced it is selling assets to the government and receiving debt support to the tune of $4.6bn, after receiving a rescue package of $5.2bn in January. That brings the total amount of government aid in Aldar’s 2011 begging bowl to near $10bn. No wonder shareholders are so happy. Continue reading »
India’s electric two-wheeler takeover
Electric vehicles might have yet to catch on in India but that hasn’t stopped one Indian company from seeing the money-spinning potential of electric motorcycles and scooters.
Hero Eco – owned by the same parent company as India’s largest two-wheeler maker, Hero Motocorp – is hoping to boost its presence in the electric two-wheeler industry with the acquisition of Ultra Motors – a UK-based manufacturer. Continue reading »
EM quiz of the year
As 2011 draws to a close, beyondbrics is running its first ever annual quiz. There are 10 questions. We will publish the results on Monday, but one of any correct set of answers left in the comments below will receive a prize. Something lying around the FT office, probably. Good luck. Continue reading »
Vale, the world’s largest iron ore producer by volume, took a significant step towards its goal of controlling all its shipping to China after it was confirmed that one of its giant new Valemax ships had been allowed to dock in China for the first time.
A person familiar with the situation confirmed that the Berge Everest, owned and operated by Berge Bulk, part of Hong Kong’s BW Group, but chartered long-term to Vale, was allowed into the port of Dalian, north-east China, to unload on Wednesday.
[video] Tens of thousands mourn death of Kim Jong-il
North Koreans lined the streets and wailed with grief as their Dear Leader’s hearse drove past. The FT’s Christian Oliver examines the reaction of North Korea’s people and looks at what the future holds for Kim Jong-eun, Kim Jong-il’s son and anointed successor.
New York headlines
* Chief Arab monitor alarms Syrian opposition
* China rail crash blamed on bad management
* Putin softens stance towards protesters
* Hazare cuts short his hunger strike Continue reading »
S&P looks kindly on Nigeria
Another emerging market has seen the kinder face of the ratings agencies. This time it is Nigeria’s turn – its credit rating outlook has been upgraded to positive, from stable, by Standard and Poor’s on Thursday.
Nigeria is currently rated ‘B+/B’ by S&P, which is three steps away from the minimum investment grade. But, according to the ratings agency, its new positive outlook means there is now “at least a one-in-three likelihood of an upgrade if Nigeria’s reform initiatives support economic growth, build stronger buffers against Nigeria’s dependence on petroleum revenue and reduce pressure on the exchange rate”. Continue reading »
Japan and India’s currency swap
Japan and India are looking to increase economic ties and a $15bn currency swap agreement, announced on Wednesday, is one way to do just that.
The new pact, sealed by Yoshihiko Noda, Japan’s prime minister and Manmohan Singh, his Indian counterpart, replaces an old $3bn swap-deal and will see the two countries swap currencies for US dollars and tap into each other’s foreign exchange reserves to ease any liquidity problems, according to the BBC. Continue reading »
Further reading: Malthus bonds
Thursday’s top picks from the beyondbrics team: Lex on the investment opportunities in population growth, why the Arab Spring needs more time, and the dangers inherent in China’s attempt to manage a property slowdown; the fightback in Rio’s favelas; and the funeral of Kim Jong-il. Continue reading »
China has again outshone the US as the top venue for initial public offerings despite steep share price falls on the mainland and Hong Kong stock markets, highlighting the shift in global financial activity from west to east.
Companies raised $73bn from IPOs in Shanghai, Shenzhen and Hong Kong this year, according to Dealogic – almost double the amount of money raised on the New York Stock Exchange and Nasdaq combined.
The external impact of China’s renminbi policy – not so simple
China's currency, the renminbi
It’s always nice to see a bit of academic clarity injected into a muddy debate. And in a paper published on Wednesday looking at the impact of renminbi appreciation on company valuations, Barry Eichengreen and Hui Tong (of Berkeley and the IMF) do just that.
The authors’ findings suggest that, unfortunately for those who advocate a “RMB must appreciate now” position, the actual situation is not that simple: it is entirely conceivable that a RMB appreciation might have overall negative consequences for foreign firms. Continue reading »
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