Daily Archives: Jan 13, 2012

Got a measly pay rise at the end of 2011? Or none at all? You might, after a brief look at new figures from the UN’s International Labour Organisation, consider moving to Argentina. Read more

Everybody knows that credit is shrinking in developed economies. Banks are scared to lend and clients are frightened to borrow.

But it’s quite different in emerging markets, as Goldman Sachs points out in a report this week. While credit contracted by 1 per cent in a typical developed country last year, in the typical EM it grew – and by a chunky 11 per cent.

That’s not a problem in itself, says Goldman. But it could it become one if the credit crunch in the eurozone gets any worse, because banks will be forced to cut exposure quickly and so rob credit-hungry EMs of funds. Who is most exposed? Central and eastern Europe and Latin America. Read more

With Egypt resuming talks with the IMF in the next few days, and Hungary making more conciliatory noises about IMF help, it’s a busy time for the fund.

But which emerging countries actually have IMF facilities, and for how much? Chart of the week finds out. Read more

As speculation swirled about the latest action to be taken by rating agencies in the crisis-hit eurozone, South Africa had its own dose of bad news.

Fitch on Friday affirmed the country’s long term foreign and local currency credit ratings at BBB+ and A, respectively, but revised its outlook on Africa’s largest economy to negative from stable. Read more

Vladimir Putin has had a tough week. His new campaign site Putin2012.ru was barraged with negative comments on Thursday within the first hour being launched, with users calling for him to retire, resign and worse. (You can see a cached list of the comments, which were later scrubbed, here.)

Yet all is not bad for Russia’s paramount leader. According to VTsIOM, the Russian polling agency, Putin’s numbers have actually gotten better since when protests first took off in early December. Read more

As beyondbrics reported on Thursday, there has been quite a pick up in bond issuance from Brazil since the start of the year. One offer in particular, from government-controlled Banco do Brasil, merits a closer look.

The largest Latin American bank by assets came to markets on Thursday with a bond that may linger around until the end of time. Read more

What to make of this week’s fund flows? Emerging market hard currency bond funds saw a big outflow; EM local currency bonds continued to ebb away; but EM equity funds leapt up.

The hard currency number may be a blip – but the local currency data hint at bigger problems. Read more

When US Treasury Secretary Tim Geithner travelled to Beijing this week, the US embassy initially struck a note of cautious optimism: China is open to cooperating with the US vis-à-vis Iran, officials said.

But the day after Geithner left, the US suddenly announced new sanctions against a Chinese oil trader that works closely with Iran, hinting that the visit may not have gone as smoothly as it first appeared. Read more

By Kathleen Sullivan of Ergo

From a petroleum perspective, 2011 appears to have been a fantastic year for Saudi Arabia. The country’s oil production soared to over 10m bpd, piling up cash reserves and reducing government debt. Proud holder of the world’s largest proven oil reserves, highest exports, and most spare capacity, Saudi Arabia seems guaranteed the pre-eminent position in world oil markets that it has held for decades.

Yet throughout the past year, threats to the Kingdom’s power intensified. Disruptions in Libyan production cast doubt on Saudi Arabia’s spare-capacity reserves. Fractious OPEC meetings highlighted the Saudis’ increasing tensions with nuclear-armed Iran. Arab Spring uprisings stirred emotions among restive Saudi youth. Read more

* Myanmar frees dozens of political prisoners

* Arab League chief fears Syria civil war

* US sanctions Chinese oil trader

* China forex reserves drop for 1st quarter since ’98 Read more

Carson Block, the man behind research firm Muddy Waters, gained a fearsome reputation by accusing US-listed Chinese companies of fraud and profiting handsomely when their shares plunged. But the notorious short-seller is changing tack. This week he told Bloomberg he was on the hunt for US-listed Chinese companies in which to invest. Read more

Is India going the way of China? Not when it comes to development indicators. Or enhanced infrastructure. Or economic power. But in another category at which Beijing excels: web censorship.

That was the implication of a ruling on Thursday from Justice Suresh Kait, of the Delhi High Court, who told lawyers for Facebook India and Google India that unless they develop mechanisms to regulate “offensive and objectionable” material on their web sites, India is prepared to take drastic measures, according to the Hindustan Times. “Like China, we will block all such websites,” Kalit declared. Read more

Has Taiwan’s stock market been benefiting from an election boost? Conventional wisdom suggests that, with a still-uncertain election outcome on Saturday, and continued storm clouds over the eurozone, investors should have been sticking to the sidelines until a clearer picture emerges.

But in fact the Taiwan stock exchange has been one of the best performers in Asia this year, rising 7.8 per cent since December 20 to close at 7181.54 on Friday, the last trading day before the vote on January 14. Read more

Apple ran into trouble with the launch of iPhone 4S in china when violence flared on Friday at at its flagship store in Beijing, which saw similar scenes at the launch of the iPad 2, as this amateur video shows.

Friday’s feast from the beyondbrics team: Lex on India’s lacklustre airline industry; upheaval in Malaysian politics;  Georgia’s outdated laws; how US candidates talking tough on foreign policy is dangerous in Chinese eyes; and making culinary chefs out of Masai chiefs. Read more

Hear it from the Hungarian side and you get the impression that the main differences between Budapest and the European Union/ International Monetary Fund are the result of an unfortunate misunderstanding. A bit of talking, a policy tweak here and there – and all will be well.

Christine Lagarde, the IMF manging director, made clear in Washington that this just isn’t true. She told a visiting Hungarian delegation that Budapest has to show “tangible steps” before the Fund can “determine when and whether to start negotiations for a Stand-By Arrangement”. And that was her public statement. Privately, she would have been even clearer – no U-turn, no money. Read more

South Korea loves blaming outsiders for its inflation headaches. But this week is a classic example of why eye-watering food and agricultural prices are really a homemade problem.

Seoul is sending very confused signals. It is unclear whether the priority is to fight prices or to protect inefficient producers and suppliers who are keeping prices too high. The central bank held rates at 3.25 per cent for a seventh continuous month on Friday, not knowing which way to run. Read more

Nearly 4,500 workers sewing Nike trainers at an Indonesian contractor have agreed compensation for working overtime for free, after the global sports company stepped in to take their side.

The settlement suggests that Nike, although still struggling to improve its labour practices and that of its contractors, is trying to up its game in addressing reports of mistreated factory workers quickly – and before activists launch major campaigns in the West. Read more

* China forex reserves drop for 1st quarter since ’98

* Nigerian leader in crisis talks on strikes

* US slaps sanctions on China state oil trader over Iran

* China loses top spot in clean energy investment Read more

Purists would have that an exchange rate is much like a woman: just as she can’t be half-pregnant, a currency cannot get very far when only half-convertible.

Beijing is now doing its darndest to disprove this truism – well, at least the latter part of it. With its carefully scripted internationalisation of the renminbi, China is expanding the convertibility of the renminbi in increments. And for now, it has been hugely successful in attracting sustained interest from investors. Read more