Daily Archives: Jan 20, 2012

Forget the wide-brimmed white hats that Panama is synonymous with. The country’s latest export? Remittances.

While remittances from their emigrants have long been a part of the lifeblood of the economies of Mexico and Central America – Panama has emerged as an exception in the region. The country last year became a net exporter, rather than recipient, of remittances. It reported outward remittances of just over $1bn in 2011. This was money sent by foreigners who live and work in Panama to their home countries, mainly the United States and Colombia. Read more

By Pan Kwan Yuk and Vivianne Rodrigues

Corporate bond issuance in Latin America might have ended 2011 on a whimper, but boy has it kicked off 2012 with a bang.

Since the start of the year, LatAm Inc has raised more than $7.4bn via 11 issues, according to data compiled by Dealogic. That is just shy of the $8.4bn raised in the first 19 days of 2011.

But can the good times can last? Or will 2012 shape up to be a repeat of 2011 where the market hit the walls after a bumper first half? Read more

A report released by the World Bank this week made for bleak reading, warning that developing countries with large funding requirements could face a crippling credit squeeze.

But which are particularly vulnerable, and which are – relatively speaking – safe? Chart of the Week investigates. Read more

The skies were dark over Istanbul on Friday, but for the Turkish central bank the clouds have lifted. After a titanic struggle to defend the Turkish lira – which involved spending some $15bn ofreserves and increasing effective interest rates from 5.75 per cent to around 12 per cent – the pressure is off, at least for now. Read more

Amid the raft of data released in China on Friday, as the country rushes toward the Chinese New Year holidays, one set of number went relatively unnoticed: the profits and revenues of state-owned enterprises (SOEs) during 2011.

While these numbers don’t get as much attention as the annual results of top individual SOEs (think Sinopec or Minmetals), they paint an interesting picture of the Chinese economy. Read more

There seems to be have been a small uptick in risk appetite this week towards emerging market funds,  with equities in favour among investors.

Emerging-market equity funds took in $1.9bn in the week to Wednesday, while those targeting bonds attracted $172m, according to investment banks citing EPFR, the research company. Read more

Small fast-moving companies are better for investors than established market leaders with big market shares. Right? Wrong, actually, at least as far as Asia is concerned.

Citi’s analysts seek to stand conventional wisdom on its head and show that in Asia it is companies with big market shares, notably utilities, energy groups and telecoms operators, that do well -  in contrast to the US, where evidence favours the small and nimble. Read more

For months, Russia has managed to largely insulate itself from the Eurozone crisis. GDP rose 4.2 per cent in 2011, according to the Kremlin, and is predicted to grow 2.3 per cent this year, according to Renaissance Capital. But a scoop from Russian daily Vedomosti today suggests the Russian government may be a bit more concerned about the country’s economic situation than it has let on.

According to Vedomosti, the finance ministry has already gone ahead and frozen a Rb200bn ($6.4bn)-sized chunk of state funds to be used in the event of a new crisis. Read more

India’s largest company by market cap posted a dramatic drop in quarterly profit – its first in more than two years and much worse than expected – days after it announced a share buy-back designed to shore up investor confidence. Read more

As Pakistan’s military and judiciary lock horns, business is worried that instability is distracting politicians from the need to reform a stalling economy. Matthew Green, the FT’s Pakistan and Afghanistan correspondent, reports.

It’s not easy being a bull in central and eastern Europe these days. No matter how much you might want to sell the story the facts just keep getting in the way.

Henning Esskuchen, head of CEE equity strategy for Erste, is one such bull who finds himself in a very tough position. In a report on CEE equity strategy Esskuchen’s normal optimism is very definitely dimmed… not that he couldn’t find some sparks of light in the gloom. In his own words, Esskuchen “dares to hope”. Read more

Germany’s Talanx is increasing its commitment to the Polish insurance market, on Friday announcing that it is buying the country’s second-largest insurer – Warta – €770m from Belgium’s KBC.

Talanx will bring in its Japanese partner, Meiji Yasuda, which will take a 30 per cent stake in Warta. The two cooperated last month to buy Polish insurer Europa for $260m from local billionaire Leszek Czarnecki. That’s fast going at a time of so much caution in global markets. Read more

* Vodafone wins $2.9bn India tax battle

* Egypt central bank tightens money transfer rules

* Russia doubled gasoline imports in 2011

* China buys stake in Thames Water

 Read more

Friday’s picks from the beyondbrics team: on the first anniversary of the Egyptian uprisings, the Muslim Brotherhood must be ready to share the political stage; corruption tainting the South Korean economic success story; the mounting challenges to China’s authoritarian resilience; and could North Korea take a page from Myanmar and U-turn towards democracy? Read more

Another conciliatory noise from Budapest, this time something quite specific – which could help persuade sceptics that Viktor Orbán, the prime minister, is at last serious about making concessions to reach a EU/IMF deal.

Orbán said on public radio on Friday that Hungary would abandon a planned merger of the central bank and its financial markets regulator – a key point of dispute with Brussels. Read more

India’s business community breathed a collective sigh of relief on Friday as the country’s Supreme Court granted Vodafone’s appeal against a $2.9bn tax bill, which revenue authorities claimed was due on a five-year-old acquisition of an Indian mobile operator. Read more

Friday’s news that the China Investment Corporation, the country’s $410bn sovereign wealth fund, had taken a stake in Thames Water has all the makings of a game-changer.

True, the investment – an 8.68 per cent stake in Kemble Water, the utility’s holding company – will bring no new capital to London’s water and sewerage services. The CIC bought its stake from a consortium of investors led by Macquarie, the Australian investment bank. So it will be hard – though surely not impossible – for George Osborne, the UK chancellor who was in China this week urging the country to invest inUK infrastructure, to claim this as a big success. Read more

Hon Hai’s Terry Gou has had a lot on his plate lately, between fresh labour problems, having his operations detailed for the first time by Apple’s sustainability report, and campaigning hard for Taiwan president Ma Ying-jeou.

So with at least one of those three resolved when Ma was re-elected to a second term last Saturday, Gou on Sunday took a well-deserved break and hosted Hon Hai’s annual family day for staff in Taiwan, at the Taipei Zoo. What could possibly go wrong? Read more

* China buys stake in Thames Water

* Italy’s banks tap ECB for €50bn

* Brazil cuts interest rates further to 10.5% Read more

Pension funds that once limited themselves to putting the odd toe into emerging markets are starting to get used to the water.

But few have taken as much trouble in charting these sometimes unpredictable seas as the Ontario Teachers’ Pension Plan which likes to pick a small range of EM investments and bet big. Read more