Brazilian corruption: a licence to print money
In Brazil, corruption scandals seem to never be far from the headlines but now a case has come along that truly pushes the limits.
The government is investigating allegations that the head of the national mint – that’s right, the man in charge of printing the country’s money – was taking kickbacks from the institution’s suppliers. The official, Luiz Felipe Denucci Martins, who was dismissed last week, has rejected the charges. Continue reading »
Venezuela: here we go again
For the umpteenth time, Hugo Chávez has threatened to nationalise companies that don’t comply with price controls.
Companies will neither be surprised, nor particularly concerned, knowing that Venezuela’s belligerent president’s bark is often worse than his bite. Continue reading »
Argentina: be productive, earn more!
Pay rises in an era of austerity – it sounds like an oxymoron, or a triumph of hope over experience.
But as Argentina’s annual wage bargaining season prepares to kick off this month, Cristina Fernández, the president, has come up with a potentially novel approach that other countries might like to consider: tie wage rises to productivity. Continue reading »
How much are EMs worth to Facebook?
One of the big stories of the week was Facebook filing for a $5bn initial public offering, which values the social network at $80bn and will make various founders and investors very rich.
But given that the value of the company is based on the content created by its users, how much are Facebook’s users worth to the company? And specifically, those in emerging markets? Chart of the week delves into the data to find out… Continue reading »
Wizz Air: early bird gets the worm
When Jozsef Varadi woke up at 7am this morning and turned on the radio to hear that Malev, the Hungarian flag carrier, had gone bust and grounded all planes, he moved fast.
By 7:43am Wizz Air, the central European budget carrier, had emailed a press release offering to fly would-be Malev passengers with valid tickets for the no-show airline a no-frills alternative; show us the ticket and we’ll fly you there or thereabouts for Ft 9,900. That’s €34, and no hidden extras. Continue reading »
Chubais v Zimin: the state v markets
Does Anatoly Chubais, the architect of Russia’s privatization programme in the early 1990s, have the answer to the dilemma facing Russia now: how best to diversify its raw materials economy into one driven by innovations?
As head of Rusnano, the state corporation attempting to spearhead that leap, Chubais, perhaps not surprisingly, seems to have undergone an evolution of his own. He now sounds much more positive about the role of the state than he would have done nearly 20 years ago when as a free marketeer he helped dismantle the command economy. Today he defends the state capitalist theses of Vladimir Putin who wrote this week that only the state corporations can lead Russia into an innovative future. Continue reading »
Russian borrowers: back for eurobonds
Russian corporate borrowers are back in action, raising a collective $2.5bn on the Eurobond market this week despite less-than-ideal conditions.
The issuance by Sberbank (SBER:MCX) and Vnesheconombank (VEB) was obviously helped by the fact that the companies are among Russia’s top-rated corporate borrowers. The question is whether two successful sales can open the floodgates.
Russian gas: under pressure
By Isabel Gorst and Stefan Wagstyl
Arctic temperatures in Russia have forced Gazprom to divert gas supplies away from European markets to serve a surge in energy demand on the home front. At least that’s what the European Union is saying.
Gazprom (GAZP:MCX) claims it is exporting even more gas than usual to help Europe through an abnormally cold snap as freezing winds blow west from Siberia. It says that if there are any shortages they are caused by Ukraine filching EU-bound gas from transit pipelines. Continue reading »
EM Fund flows: hungry for risk
Emerging market equities have grabbed the headlines this year, but investor appetite for bonds, too, is enjoying a risk-on resurgence. Data from EPFR, the fund flow monitor, show that EM fixed income funds saw inflows of $1.16bn in the week to Wednesday – the most since August – adding to $907bn of inflows in the previous week.
EM equity fund inflows were strong, too, at $3.53bn. Compare that with developed market equity funds, which surprised analysts with a small outflow. Continue reading »
Russia: interest rates held but hawks rustling their feathers
Russia’s central bank held interest rates on Friday as expected – but warned that the battle against inflation was not over, even with the figure at a post-Soviet low of 4.1 per cent.
With increases in household utilities bills delayed until the second half the year – for reasons not unconnected with next month’s presidential election – the central bank could still struggle to meet its 6 per cent target. Continue reading »
The underbelly of Chinese New Year
It will come as no surprise that last week’s Chinese New Year holiday was a good one for luxury goods retailers worldwide, with Chinese spending $7.2bn overseas on their much-loved luxe (up 28.6 per cent from the holiday week in 2011, according to Chinese newspapers). Within China, retail sales were up 16 per cent from last year, to Rmb470bn.
But the Chinese press, which spent much of the past week dissecting various behaviours relating to the lunar new year holiday, found that all was not bling in the spring festival sales: this year there was a tendency to rent rather than buy cars; to travel rather than buy property – and, for that matter, to travel rather than buy a refrigerator. Continue reading »
India’s Binani in €275m Belgian deal
Though Brics may not be riding to the eurozone’s rescue any time soon, emerging market companies are making headway in acquiring European assets while the going is rough.
Binani Group, one of India’s most diversified industrial conglomerates, on Thursday became the latest to announce a European deal – with with €275m ($361m) acquisition of 3B, a Belgian fibreglass maker. It came just days after China’s Sany Heavy Industries revealed plans to buy Putzmeister, the German concrete machinery maker. Clearly the hunt is on for European businesses with technological know-how. Continue reading »
Turkey: (new) home of the bear?
Talking up your home market might seem like an obvious trap for analysts to fall into – but not, apparently, if you are Turkish.
Is this because Turks are natural bears – or is there something about the economy that is hard to predict? Continue reading »
Guest post: Glencore/Xstrata global merger – a good deal for S Africa
By Peter Major
The proposed merger of Glencore and Xstrata will, if it goes ahead, create a new giant of the global mining and metals industry. As one of the world’s largest producers, South Africa needs to consider the merger carefully.
The deal may not affect the man in the street very much, but it does have a strong South African flavour, with both companies having operations in South Africa and both, as it happens, run by South Africans. More importantly, the deal would highlight the role of western investment in mining at a time when there is a strong focus on Asian companies, especially Chinese groups. Continue reading »
[snap] Ryanair to open Budapest base in two weeks as Malev flounders
Ryanair, the low-cost airline, is to open a base in Budapest following Friday’s forced grounding of Malev, the Hungarian flag carrier.
At a press conference in Budapest on Friday afternoon, Ryanair said it would operate 31 new routes, “saving 2,000 jobs following Malev’s closure”. Continue reading »
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