Daily Archives: Jan 26, 2012

Don’t say we didn’t warn you. With the exceptions of China’s renminbi and Peru’s sol, emerging market currencies ended 2011 in the red after a blast of bad news from the eurozone sent investors running for the traditional fastnesses of the US dollar, the Swiss franc and gold.

But since the start of the year, EM currencies have roared back – big time. Read more

Who’s afraid of Mexico’s drugs war? Not foreign tourists, it would seem: just weeks after the centre-right administration of President Felipe Calderón confirmed that drug-related violence had claimed almost 13,000 lives to September last year, it turns out that more foreign tourists visited Mexico than ever before.

According to figures published Thursday by the tourism ministry, 1,072,180 foreign tourists descended on the country in December – 13 per cent more than during December 2010, and the highest figure ever recorded for that month. Read more

foodfightAn acrimoniously escalating investment dispute between Codelco and Anglo American centred on valuable copper assets and potentially billions of dollars in damages, has taken a new, bizarre twist.

The Federation of Copper Workers, which represents Codelco workers and whose boss, Raimundo Espinoza sits on Codelco’s board, has filed a criminal complaint seeking, it says, to ascertain the existence of a simulated contract between Anglo and Mitsubishi, the Japanese trading house to which it sold a 24.5 per cent stake in its Anglo Sur unit in November for $5.39bn. Read more

Colombia may still be years away from achieving real peace but that hasn’t stopped the Andean nation from reaping a peace dividend.

Oil and gold exploration is booming as territories once under the control of guerrillas or organised crime are opened to investment following an aggressive military and intelligence push. The country also has Brazil-sized agricultural ambitions for the vast lands stretching out towards the Venezuelan border.

News on Thursday of a $111m initial public offering by Construcciones El Condor underscores another key aspect in Colombia’s economic development – infrastructure. Read more

Croatia’s government on Thursday announced plans for sweeping spending cuts aimed at curbing deficit growth and strengthening weakened credit ratings.

Zoran Milanovic, the new prime minister whose centre-left majority coalition took power last month, proposed cuts of 4.6bn kuna (€630m /$795m) in the 2012 budget, with the austerity spread around evenly to minimise the pain. Read more

How can Russia get the most of potentially substantial oil and gas reserves in the Arctic and Black seas? Analysts at BofA Merril Lynch think they have the answer: follow Brazil’s example.

The US bank lays out three steps that the Russian government should adhere to. Based on the Brazilian experience, it says, an additional 6bn barrels of oil reserves are at stake. Read more

Russian authorities are mulling tax changes that could raise borrowing costs for Russian companies on the international eurobond market by as much as 20 per cent, according to lawyers familiar with the matter.

On Thursday Moscow newspaper Vedomosti reported on a letter from deputy finance minister Sergei Shatalov to the head of Russia’s tax service recommending that they look into levying withholding taxes on interest paid to eurobond holders living abroad. Since the issuers usually pay such taxes, the direct responsibilityould fall on the Russian borrowers, not the investors. Read more

Source: Egyptian Stock Exchange

At last some good news from Egypt’s battered financial markets. Stocks soared on Thursday, with a 7 per cent bounce in the EGX 30 index, after Wednesday’s demonstrations on the first anniversary of the anti-Mubarak uprising passed off peacefully.

That extends this year’s gains to over 22 per cent, making Cairo the world’s second best-performing equity market in $ terms after another recovery story – Hungary (on 24 per cent). But how long can it last,  given the manifest economic and political challenges? Read more

Dangerous donkeys, Rwanda’s president and Somali extremist Islamists might not at first seem to have much in common. But they are united by a phenomenon sweeping Africa: Twitter.

In the first survey of its kind, Portland Communications and Tweetminster analysed 11.5m Africa-located tweets and 500 of Africa’s top tweeters from the last quarter of 2011. Read more

While bailouts for banks and even countries preoccupy the policymakers and protesters of the west, Sheikh Khalifa bin Zayed, president of the UAE, has announced a different kind of bailout: he will spend 2bn dirhams ($545m) on clearing the personal debts of almost 7,000 of his citizens. Read more

Indian businesses face daunting challenges in the wake of high inflation, lower growth projections and political wrangling among the country’s leaders, according to an FT special report on Thursday.

But though the Indian economic success story is wavering after years of near double-digit growth, its cash-rich business leaders are still eager to continue their expansion into international markets. Read more

The collapse of three buildings in the centre of Rio de Janeiro on Wednesday night – leaving at least 19 people missing – raises fresh questions about the city’s infrastructure as it prepares to co-host the 2014 World Cup and 2016 Olympic Games.

It should also give pause to those who say Brazil’s recent rise to prosperity has allowed it to leave behind its “emerging market” status. No matter how much has been achieved and no matter how great Brazil’s potential, it must still deal with a heavy legacy of the past. Read more

* S. Korean growth falls to 0.4 per cent

* Romania frontloads debt sales to avert change in risk appetite

* China says EU ban on Iran oil not “constructive”

* China overtakes Japan as world’s top coal importer Read more

Never mind the “next 11″ – 2012 is set to be the year of the four Brics, and the numbers for January bear this out. So says bullish Citi analyst Geoffrey Dennis.

But is this a temporary bout of contrarianism? Beyondbrics takes a look. Read more

Shares in PKN Orlen (PKN:WSE), Poland’s top oil refiner, dropped 1 per cent on Thursday after it warned in a statement that 2011 fourth quarter operating profits would plunge 87 per cent, much more than the market expected – because of write downs in Lithuania and the Czech Republic.

The group, in which the state is the dominant shareholder, will post operating profits of only 100m zlotys ($31m) compared to 747m zlotys in the same period of 2010 and 742m zlotys forecast by analysts polled by Reuters. And it could have been even worse – only a 600m zloty currency-linked stock revaluation saved Orlen from falling into the red. Read more

Thursday’s treat from the beyondbrics team: how to feed 9bn people by 2050 – without destroying the environment; India must shift from populism to reform to build on its economic achievements; the daunting challenges facing Somalia on the way to stable self-government; and why a major reshuffle of the cabinet in Thailand threatens a collision between government and military. Read more

“Transparency” has been as alien a term as “democratisation” in Myanmar over the past decades.

But just like recent reforms on the political front, economists and long-time Myanmar-watchers gained some rare insights on Thursday into the fundamentals of the country’s battered economy. Read more

In emerging markets, the threat of inflation is far from dead. The latest official to warn of the risks is Alexei Ulyukayev of the Central Bank of Russia, who said on Thursday that keeping inflation to 6 per cent this year would be “more difficult” than in 2011.

According to Reuters and Bloomberg, Ulyukayev said early rate cuts were unlikely even though inflation is now at a post-Soviet low of 4.7 per cent and economic growth is slowing.

The central bank is wise to be cautious: with the government ramping up public spending in advance of next month’s presidential election, it’s better to wait a few months before joining other EM central banks in monetary easing. Russia is not yet secure in its 20-year fight with inflation. Read more

South Korea’s economy grew at the slowest rate in 2 years in the fourth quarter, as the fallout from Europe had a bigger-than-expected drag on the export-driven country.

The quarter on quarter figure of 0.4 per cent growth was a touch softer than expectations, and represents a 3.4 per cent increase year-on-year. Read more

* S. Korean economy grows 0.4 pct in Q4

* ConocoPhillips to pay $158 million damages for China oil spill

* Iran threatens to act first on EU embargo

* Egyptians urge civilian rule a year on from revolt Read more