Daily Archives: Jan 25, 2012

It is no secret that Venezuela is hardly the most business friendly country in the world, with a president who habitually takes pleasure in grabbing private property, while a maze of government regulations act as an added deterrent.

But a new report shows that Venezuela’s acute insecurity problem – it has one of the highest homicide rates in the world – also makes it the Latin American country where crime affects businesses the most. Read more

Venezuela’s sovereign bonds have rallied strongly in recent weeks on speculation that the oil-rich country’s government could change due to President Hugo Chávez’ cancer and elections due later this year.

The price of Venezuela’s $4.2bn government bond maturing in 2031 has climbed to 86.5 cents on the dollar. Apart from the odd surge in the volatile bond’s price, this is the highest on record, and up from a low of 71.2 cents on the dollar in late September.

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To say that Carlos Slim has an iron grip over Mexico’s telecom industry would be an understatement. His Telmex phone company controls about 80 per cent of the country’s fixed lines while another company, Telcel, accounts for 70 per cent of its mobile market.

An eagerly awaited decision by Mexico’s competition authorities over broadcaster Televisa’s proposed acquisition of a 50 per cent stake in mobile operator Iusacell, could finally inject some much needed competition into the sector. But Mexican consumers shouldn’t get too excited. The case – which pits billionaires Emilio Azcarraga Jean (head of Grupo Televisa) and Ricardo Salinas Pliego (head of TV Azteca and lusacell) against Slim - is a sad reminder that Mexico, for all the progress that it has made, remains an economy dominated by monopolies and oligopolies. Read more

Nigeria has had a tumultuous start to the year, to say the least. After six days of strikes that cost the economy $1.3bn and the escalation of devastating deadly attacks, you might expect that the country’s investment climate had got worse.

Not so, says Charles Robertson, an analyst at Renaissance Capital. He argues that recent developments in Africa’s most populous country, in three key reform areas, could herald the start of a radical transformation – and long-term investors could reap the rewards. Read more

Turkey is talking of boycotts in its increasingly bitter dispute with France.

At the centre of attention: Sodexo, the French food company now the target of Istanbul restaurateurs who say revenue from $2bn’s worth of Turkish meals is at stake. Read more

There has been little to cheer about on world financial markets in recent months but in the past week South African equities have been able to claim an all-time record.

The Johannesburg Stock Exchange, by far Africa’s largest, has hit record highs with its benchmark All-Share Index closing on Monday at 33,940 points following six straight days on the way up. But there’s a snag: that’s only in local currency terms. For international investors it’s a different story, with the rand’s weakness cancelling most of the gain – though the market is still up, just. Read more

Hungary could get by without a financial rescue as long as things get no worse in the eurozone. But if there is a new eurozone shock, Budapest would struggle to meet its external financial obligations.

That’s the view of the International Monetary Fund, published on Wednesday, as prime minister Viktor Orbán redoubles efforts to persuade the Fund and the European Union to help him out. While it’s hardly a congratulatory report, it bears out Budapest’s opinion that while the country could survive unaided,  it’s safer not to take the chance. Read more

Abu Dhabi’s push to become a global transport hub is quietly gaining traction, despite the recent dominance of its glitzy neighbour Dubai.

Etihad Airways, the fast-growing Gulf airline, said on Wednesday it would acquire a 40 per cent stake in Air Seychelles, marking its second airline purchase in little over a month as the UAE’s national airline revs up its expansion plans. Read more

There’s no doubt that China’s growth has created a market ripe for Latin America exports, particularly natural resources. But have Chinese manufacturers – using those same imported raw materials – hurt the sales of their LatAm rivals? The evidence has mostly been anecdotal. Until now.

In the most recent edition of Americas Quarterly, Osvaldo Rosales and colleagues take an empirical approach. Their conclusions are clear: Chinese competition has hit LatAm manufacturers hard – at home and abroad. Read more

Call it one small step for man, one giant leap for financial scandal.

As people close to the government told beyondbrics, a government-backed panel has recommended that ministers should ban the former head of India’s space programme, Madhavan Nair, and three other eminent former space scientists from government jobs. The panel has alleged that the four were involved in the leasing of underpriced space spectrum to private telecom operators.

Nair has denied any wrongdoing and has vowed to fight to clear his name. Read more

While beyondbrics has a healthy scepticism for consultants’ surveys, they do sometimes throw up the odd nugget. Here’s one from Accenture:

Forty percent [of executives] do not believe that their companies possess the strategic and operational capabilities to fully grasp the opportunities in emerging markets.

That’s not a confident place to be. And it gets worse. Read more

The International Monetary Fund has this week cut Russia’s 2012 growth forecast to 3.3 per cent from 4.1 per cent, a sign that the Fund believes Russia especially vulnerable to a slowdown in global growth. The global growth number for 2012 was cut from 4 per cent to 3.3 per cent.

Most analysts have been cutting Russia forecasts, but the IMF is even more pessimistic than they are. According to Ivan Tchakarov of Renaissance Capital, the Moscow investment bank, this is not a good sign. Read more

By Bernd Braasch of the Bundesbank

Reducing global real imbalances and a reform of the international financial system are still top of the international political agenda. But while a co-ordinated approach and a more market-led exchange rate system are often publicly discussed, the problem of “missing financial markets” is less prominent. Read more

* Egypt marks anniversary of anti-Mubarak uprising as activists urge rallies

* IMF finds most of Angola’s missing $32 bln

* China breaks 30-year tradition with Davos

* Thailand: a rate cut to spur recovery

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Amongst the general adulation surrounding Apple’s results on Tuesday, there was one complaint. The company messed up in China.

Tim Cook, Apple chief executive, was inevitably asked about the botched China launch of his latest iPhone (the 4s) – when shoppers turned angry after the flagship Beijing store didn’t open on day one.  His answer: “We thought we were betting bold – we didn’t bet high enough.” A reasonable excuse? Let’s see. Read more

Ikea, the Swedish retailer, sells its flat-pack furniture in 26 countries. India is not among them, though China and Russia are.

This should be about to change with a planned liberalisation of retail that will allow single-brand companies like Ikea into India. But it won’t, because Ikea doesn’t like the local sourcing conditions that New Delhi has inserted into the regulations. Read more

Wednesday’s picks from the beyondbrics team: Lex on why India’s outsourcers continue to thrive; but the Indian authorities could use a sense of humour; urbanisation in China is stiffing creative centres; and clean water in India. Read more

With spring festival celebrations still in full swing, most Chinese factory workers are now sitting round their dinner tables, exchanging red packets, and catching up with loved ones at home. Some of them won’t go back south after the holidays, as job prospects and wages improve closer to home.

But will manufacturing companies do the same, and reconsider China as a place to sew, weld and assemble? Read more

The Bank of Thailand surprised nobody with its 0.25 percentage point cut on Wednesday, reducing its one-day bond repurchase rate to 3 per cent.

With the country struggling with the effects of the worst floods in more than 60 years as well as the same global challenges now faced by other Asian exporters, the central bank had little choice. That makes Thailand the fourth Asian country to ease monetary policy – in some form – in the last week, following the Philippines, Indonesia and India. Read more

* China breaks 30-year tradition with Davos

* Obama targets China with enforcement group

* Apple results surge past forecasts

* Peru sets up close scrutiny of Conga mine Read more