Daily Archives: Jan 5, 2012

January 6 is traditionally a gift-giving day in Argentina – the Epiphany, or “Reyes” (Kings) as it is known here, can be expected to bring (at least for children) a present to round off the Christmas season.

But this year, it marks the start of what promises to be a raft of tariff hikes. The Buenos Aires underground railway, or “subte”, will go up by 127 per cent to 2.5 pesos ($0.58) on that day, following its transfer to city government control and the federal government’s commitment to pay (and for one year only) half the subsidy that has kept the ticket price so low for so long. 

Investors in oil and gas stocks could be excused for feeling weary after a bleak 2011 – but groups focussed on East Africa look set to provide some welcome relief.

Cove Energy – an Aim-listed company with operations primarily in Mozambique – put itself up for sale on Thursday, sending its shares surging 13 per cent amid speculation that bids of as much as $1bn could come from the world’s largest oil companies. Analysts reckon this could just be the beginning of a takeover spree in the recently beleaguered sector, as explorers operating in some of the world’s last untapped resource-rich regions are targeted by their better funded rivals. 

Investors looking for musical inspiration for 2012 could do worse than tune in to Chinese television later this month. Warren Buffett, widely revered in China for his investment savvy, will sing and play guitar to celebrate China’s upcoming Lunar New Year in a specially recorded performance to be aired online by state television, according to Patti Waldmeir of the FT. Beyondbrics promises to bring you the footage, assuming it is available… 

This may sound way ahead of the game but Barclays Capital reckons the chances of a better than expected outcome for Europe and the US will lead to a “breakdown in correlation” between the eurozone and EM assets, allowing commodity-linked and other risk currencies to realise their potential without being swung around every other day by changing sentiment on the euro. In fact, BarCap thinks it is already happening. 

This post is the eighth of a series – 12 for 2012 – that beyondbrics is running on key emerging markets topics for the new year.

By David Gardner

A year that began fizzing with hope and pent-up yearning for change across despot-infested Arab lands ended on a note of foreboding.

Tahrir Square, a thrilling emblem of heroism across the world, is being reshaped into a snapshot of thuggery by generals long past their sell-by date. Syria is mired in a vicious stalemate. The triumph of Islamism at the polls has set nerves jangling in the west and in pockets of the Middle East. Ponderous metaphors proliferate about spring turning into winter. 

The new year is shaping up to be just as bad as the last one for India’s embattled aviation industry.

On Thursday, the FT reported that cash-strapped Kingfisher Airlines was at risk of losing its operating license after a regulator’s audit suggested its financial woes were affecting its safety standards. Air India Express – the low-cost subsidiary of the national carrier – could also be grounded, according to the Economic Times

While China gobbles up resources around the world, there’s one thing it can’t get enough of: plasma.

Last month Chen Zhu, Beijing’s minister of health, rang the alarm about a nationwide shortage of blood – which is no surprise to Chinese patients who often have to round up relatives and friends to donate for their operations. State television recently ran a story suggesting that patients should donate their own blood to mitigate problems getting the plasma they need for surgeries – though the state broadcaster admitted that hospitals would not be able to store the blood if they did so.  

The numbers are just getting worse in Hungary, with the forint touching a new all-time low against the euro of Ft324 and the government paying 9.96 per cent in an auction of one-year bills – compared with 7.91 per cent at the last such sale two weeks ago.

And despite the eye-watering yield, the authorities sold only Ft35bn worth of paper, Ft10bn less than planned. How much longer can the stubborn Orban government resist the pressure to go cap in hand for aid to the International Monetary Fund/European Union? 

* Worries grow as China land sales slump

* Hague welcomes Burma’s pledge of more reform

* Spain sees €50bn of new bank provisions

* Gilts draw record numbers of global investors 

Romania, which in November became the first European Union country to cut interest rates in response to the eurozone crisis, on Thursday again sliced borrowing costs, with the the  central bank trimming rates by a quarter point to 5.75 percent.

With investors’ nerves about Hungary undermining confidence across the region,  Bucharest is taking a bit of a gamble with the exchange rate. But with the leu slightly higher against the euro than it was before the November cut, the National Bank of Romania has probably made the right call, given declining inflation and slowing growth. 

Might things finally be getting better for the Indian economy, which had a terrible 2011?

Food inflation, which had been declining since mid-November, fell into negative territory in the week ending December 24, down to -3.36 per cent from 0.42 per cent the week prior, driven by steep falls in the price of vegetables, potatoes and onions, according to data released on Thursday. 

Thursday’s top picks from the beyondbrics team: Lex on Hungary ignoring warnings, Macao enjoying a casino boom and competition in India’s fast-growing car market; John Gapper on why China’s elite rulers should listen to the masses; and why America won’t heed Iran’s sabre-rattling. 

By Shelina Janmohamed of Ogilvy Noor

It’s the beginning of 2012 and you’ve come into work determined to flex your marketing muscles and really make a splash for your brand by growing a new segment. Where should you look? The Muslim consumer.

Here’s why: a global population of 1.8bn people who say their faith shapes their consumption choices. It’s a market estimated at $2.1tr. And its movers and shakers are the ‘Futurists’: predominantly young, tech-savvy Muslims who take pride in their faith but embrace modernity, marketing and – most of all – brands. 

* Spain sees €50bn of new bank provisions

* Gilts draw record numbers of global investors

* PBOC suspends bill sale as money rates rise before holiday

* Europeans plan oil embargo on Iran