Daily Archives: Jan 18, 2012

When the US sneezes, Latin America catches a cold – or so the saying goes.

But you wouldn’t know that looking at the LatAm debt market. Bimbo, the the world’s largest breadmaker, became the latest to join the LatAm 2012 bond bonanza with a 10-year debt sale. Read more

Brazil’s central bank has cut its benchmark interest rate by 50 basis points to 10.5 per cent.

No surprises there, then.

Here’s the accompanying statement: Read more

Initial reaction to Brazil’s new law introducing overtime payments for after-hours office emails and telephone calls ranged from approval by workers to anger among businesses.

In a land in which labour laws are already highly complicated and the cost of hiring people is steep, the negative reaction from businesses, especially small ones, is understandable. Read more

Who would want to run a business in Argentina? The country (officially considered a frontier economy now by equity markets) offers risk aplenty: rules that can change at the drop of a hat, like new import regulations announced last week and a serious problem with inflation.

The government has this week accused major oil companies of operating a cartel to inflate the price of diesel. It is even suspected of messing with the price of Big Macs.

So, one might wonder, why bother? Aren’t other countries in Latin America booming? Aren’t there other less headache-inducing countries for companies to go to? Read more

So apparently this Brazil place is worth having a look at?

Everyone and their grandmother may be investing in Brazil nowadays but finally the UK foreign secretary, William Hague, has come to see what all the fuss is about. Read more

Ruspetro, a Russian oil explorer, has raised $25om in a London initial public offering – the first London flotation for a Russian company in six months.

While some might herald the Ruspetro listing as a kick-off to the 2012 Russian IPO season, it would be naive to think that many other groups are rushing to follow in the oil explorer’s tracks. Read more

It looks as though Zygmunt Solorz-Zak is going to pay a steep price for his audacious purchase of Polkomtel, one of Poland’s leading mobile providers, thanks to rising bond yields which make financing the $5.2bn transaction more expensive.

Polkomtel is in the midst of an international road show, flogging a €900bn equivalent 8-year bond issue denominated in euros, dollars and zlotys, which Reuters reports could be priced by the end of this weekRead more

The eurozone crisis might have left south-eastern Europe in an economic doldrums since 2009 but that has not stopped one company from seeking its fortunes in the region.

Tobacco AD, a fast-growing Macedonian convenience store chain, is betting that even in these times of financial austerity, people will continue to drink, smoke and pay their utility bills.

The Skopje-based company, with 55 stores open already in the former Yugoslav republic, is planning to raise €2m via an initial public offering to fund its expansion around the western Balkans. Read more

It’s understandable that BTA’s long-suffering creditors are furious that Kazakhstan’s third biggest bank has defaulted so soon after the 2010 restructuring when they succumbed to massive haircuts.

But what can they do about it except rant and rave? Read more

If the quick-tempered Viktor Orbán was advised to keep cool in the face of enemy fire when he appeared before the European Parliament on Wednesday,  he succeeded admirably in sticking to the script.

A string of tirades against his alleged attacks on democracy left the Hungarian prime minister unmoved. So did references to the alleged anti-Semitic past of an ally, and even unflattering comparisons with Fidel Castro and Hugo Chávez. This should be positive for the markets – if Orbán can keep calm in these circumstances, he ought to be able to do the same in the tough forthcoming talks on Hungary’s EU/IMF bailout. Read more

Three pieces of data came out of South Africa on Wednesday, revealing an economy in worse shape, on balance, than analysts had forecast – but only just.

The latest manufacturing and retail figures fell short of consensus expectations – a further blow to Africa’s largest economy after Fitch revised its outlook to negative last week. But inflation in December was lower than anticipated, albeit still at its highest level since January 2010. And Absa Capital, at least, was cautiously optimistic about the country’s macroeconomic outlook for 2012. Read more

Analysts and economists are so sure that Brazil’s central bank will cut its policy interest rate this evening that they will barely pay it any attention – unless, that is, the bank surprises with a cut of 25 basis point from the current 11 per cent a year, instead of the 50 bps cut widely predicted.

But they will be paying very close attention to the short statement that accompanies each decision, as well as the full minutes of Tuesday and Wednesday’s monetary policy committee meeting to be published on January 26. Read more

By Alfredo Behrens of the FIA business school in São Paulo

Which is the best way to run a business: paternalism or meritocracy? It depends what kind of society you are operating in. Here is a tale of video production in Brazil. Read more

India is to launch a $35bn wave of public sector investment to reverse a decline in the fast-growing economy’s growth rate. The emergency stimulus measures are in response to widespread criticism of policy paralysis in New Delhi and a dramatic fall in economic growth to 7 per cent from an earlier 9 per cent, reports the FT’s James Lamont. Read more

Stefan Wagstyl, editor of beyondbrics, discusses the World Bank’s warning on the prospects for emerging markets with FT Long View columnist John Authers.

Last August, beyondbrics wondered when Mukesh Ambani would put the massive cash pile of his Reliance Industries conglomerate to good use.

That pile stood at $12.2bn in September – the most recent public number – and on Wednesday, RIL provided one answer when it notified the Bombay Stock Exchange that, at its board meeting on Friday, the company would “consider and approve a proposal for Buy Back of the Company’s equity shares”. Read more

By Robert Johnston and Divya Reddy of Eurasia Group

Mining companies have been busy scouring investment frontiers that they once avoided. The world’s seven largest gold-producing companies are all developing major projects in frontier markets, including Papua New Guinea, Kyrgyzstan, Mauritania, and Ecuador.

Geologically-attractive deposits (especially for gold, and to a lesser extent, copper) in politically-stable countries are scarce today, while large, untapped deposits in frontier markets offer greater promise. However, this shifts risks from below- to above-ground. The world should brace itself for an increase in supply disruptions for key commodities. Read more

The forint on Wednesday rallied in advance of prime minister Viktor Orban’s speech at the European Parliament, amid hopes that the government would swallow its considerable pride and accept European Union and International Monetary Fund conditions on a planned bailout.

The HUF rose as much as 1.5 per cent against the euro before falling back to trade 0.8 per cent up at Ft306.25, its highest level since late-December – before the latest round of market worries about Hungary. Read more

Facebook may be blocked by the censors in Communist Vietnam but presumably no-one told Vuong Dinh Hue, the finance minister (left), who has been crowing about his desire to engage with the people through the popular website.

The fact that a senior minister is advocating the use of a blocked social networking website points to the lack of policy cohesion in Vietnam, a country with very diffuse power structures, and the struggle that the Communist Party faces to adapt to life in the twenty-first century. Read more

* World Bank warns emerging nations

* Billionaire Anil Ambani taps China loans

* China unlikely to prise open Saudi oil vault

* Angola denies $32 billion missing in state funds Read more