Is Pemex about to turn a corner? Over the last few years, Mexico’s state oil monopoly and the world’s fourth-largest producer of crude has reported some ghastly figures – the best known being the 24 per cent fall in oil production between 2004 and 2009.
Less known, however, is that Pemex has since managed to stabilise production at just over 2.5m barrels a day. Continue reading »
The cost of the Turkish central bank’s efforts to support the lira are mounting fast. The bank on Friday disclosed a $4.8bn drop in total gold and foreign exchange reserves last week to $88.2bn, the lowest level since early 2011.
With analysts estimating a further $3bn could have gone this week, the central bank cannot afford to keep intervening like this. As of the end of December, reserves covered just four months’ imports, against a 5½-month average in CEE (minus Russia). With Turkey’s current account deficit of 10 per cent of GDP, these figures aren’t yet a reason to panic but they are of concern. Continue reading »
Even for skitty EM equities, Indian stocks have notched up some extraordinary volatility of late. They were among either the three best or three worst performers in the EM universe in four of the past five years. Now, though, they are in line for some stability.
That, at least, is the view expressed by Ridham Desai and colleagues at Morgan Stanley in a report published on Friday. So what should investors do, given that 2011 was a “bottom-three” year? Buy now, suggests Desai. Continue reading »
Has there been a breakdown in correlation between the eurozone crisis and investor sentiment in emerging markets? Barclays Capital has identified one (see above link) but data from EPFR, the fund-tracker, suggests that the eurozone turmoil is still driving investors to switch between risk-on and risk-off modes. And right now, it’s risk-off. Continue reading »
When you are India’s largest single lender, your balance sheet is around $250bn, your tier-1 capital adequacy ratio is under 8 per cent, your stock lost 42 per cent of its value last year (nearly double the decline in the market), and your non-performing assets are growing.
That’s the position of the government-controlled State Bank of India, which on Thursday night said it would be receiving a likely Rs50bn-Rs60bn ($948.6bn-$1.14bn) capital infusion from the state by the end of March, according to the Economic Times. Continue reading »
The forint rose and bond yields eased on Friday after embattled prime minister Viktor Orbán came out of a government-central bank meeting saying an agreement “as soon as possible” was in the interests of the economy. Given the many arguments dividing Budapest from its potential rescuers, a deal is still a long way off. But it’s an important step in the right direction. Continue reading »
This post is the ninth of a series – 12 for 2012 – that beyondbrics is running on key emerging markets topics for the new year.
By Michael Landesmann of the Vienna Institute for International Economic Studies
Until quite recently the picture which forecasters painted of the likely business cycle dynamic in central and eastern Europe (CEE) was the following: 2009 saw a deep decline in economic activity; 2010 was in many countries an export-led recovery; in 2011 there was some shift towards domestic demand components (consumption, investment); and for 2012 one expected the recovery would remain relatively steady.
Those expectations have been substantially revised downwards over recent months and most forecasters now warn that the down-side risks are higher than the up-side risks. Continue reading »
Friday’s top picks from the beyondbrics team: Philip Stephens on why Victor Orban would win plaudits from Vladimir Putin; Japan and South Korea bow to political pressure; US unveils “smaller and leaner” military; why the current anti-corruption efforts in South Africa will not suffice; and how foreign financial institutions can start making serious inroads in China.Continue reading »
China loves shale gas. Just this week a Chinese company spent $2.5bn on US shale oil and gas assets, in part to help meet the country’s voracious appetite for energy. Gas demand is estimated to grow 15 per cent a year.
But a close friend of Beijing’s has joined those criticising the controversial energy source: Fidel Castro. Continue reading »