Colombia: too hot for comfort?
Is Colombia at risk of overheating?
The country’s central bank seems to think so. Not content with having made a surprise interest rate hike last month (even as the rest of LatAm held or cut rates) and then launching a dollar buying programme this week to curb the rise in the peso, Colombian policy makers are now studying measures to slow consumer credit growth. Continue reading »
Petrobras: profits and shares plunge
You can put a brave face on it but you can’t change the bottom line. Petrobras, Brazil’s government-controlled oil group, said its revenues rose by 5 per cent in 2011 compared with 2010. But its annual profits were down by the same margin. And in the fourth quarter, the picture was much grimmer: while revenues were roughly stable at about R$14bn ($8.1bn), profits slumped by more than half, to R$5.05bn from R$10.6bn a year earlier. (Click here to download the pdf.)
The company’s most traded shares fell by 7 per cent during Friday on the news. Continue reading »
Hungary’s Malev will be missed
One week ago, when Attila Kozsik heard the news that Malev, the Hungarian flag carrier, had grounded all planes, he knew it meant problems.
Kozsik is chief financial officer at Crnogorska Komercijalna Banka, Montenegro’s largest commercial bank, based in Podgorica. It is also a subsidiary of OTP, the Hungarian bank that has been expanding its reach in the region in the past decade. For him, losing Malev also meant losing the only carrier offering direct flights between Podgorica and Budapest. Continue reading »
Recession looming over CEE
Estonia released fourth quarter GDP data on Friday – and the news wasn’t good. The economy grew 4 per cent year-on-year, down from 8 per cent in the previous quarter and its slowest pace in one and a half years.
With a raft of data due next week, how will other economies in emerging Europe fare? According to Capital Economics, both the Czech Republic and Hungary have real reason to worry – with the Czech Republic likely to be the first country in the region to fall back into recession. Continue reading »
Guest post: Building halal brands
By Shelina Janmohamed of Ogilvy Noor
The race is on to establish powerful international ‘halal brands’. The stakes are high: by some estimates, the global market for halal products is worth $500bn a year.
But it’s a market strewn with confusion, as separate Muslim countries try to establish recognised standards and producers from outside the Muslim world also hurry to enter the market. That leaves many Muslim consumers crying out for reliable brands that will help them guide their choices. Continue reading »
Chart of the week: How bad are China’s trade figures?
Chinese imports fell sharply in January while exports fell slightly but by much less than expected. This doesn’t fit with conventional wisdom. Any slowdown in the west, especially in Europe, should hit Chinese exports. And the booming Chinese economy and increased domestic demand should keep imports up. Right?
Apparently not. Chart of the week takes a look at Chinese trade. Continue reading »
Guest post: Global crisis has silver lining for China
By Michal Meidan of Eurasia Group
A grim global economic outlook is not all bad news for China. With cash-strapped governments putting assets up for sale, Chinese firms and financial institutions are going on a shopping spree in developed economies. Continue reading »
Russian corruption: it may be an epidemic but at least it’s civilised
Dmitry Medvedev, Russia’s president, said on Friday that corruption in housing and utilities had reached an “epidemic” level, according to a Bloomberg report from Moscow.
Across town, though, the campaign chief of Vladimir Putin, the country’s prime minister and once and future president, was putting a different gloss on things. His boss, he said, had “tamed the gangster capitalism” that accompanied the collapse of the Soviet Union to make Russian corruption “normal and civilised”, Reuters reports. Continue reading »
RIL raises $1bn bond to invest in US
Considering it had around $14bn in cash and cash equivalents on its balance sheet as of December, India’s Reliance Industries isn’t the most obvious candidate for a bond sale.
And yet that’s exactly what RIL has done. In what was widely seen as a way to manage risk related to the weak rupee – and acquire funding cheaper than at high Indian interest rates for overseas shale gas acquisitions – the company raised $1bn in 10-year dollar-denominated bonds on Friday. Continue reading »
EM fund flows: record optimism
Yet more evidence – after last week’s risk-on bonanza – that investors are hungry for emerging market bonds.
Figures from EPFR, the fund flow monitor, reveal that EM fixed income funds received inflows of 1.6 per cent of assets under management – $2.1bn in EPFR’s sample universe – in the week to Wednesday. That’s the second largest inflow since the beginning of 2010. Continue reading »
New York headlines
* Eurozone dismisses Greek budget deal
* Chinese imports fall sharply in January
* S.Africa’s Zuma squashes mine nationalisation talk
* Police strike threatens Rio carnival crime wave Continue reading »
Bit of a squeeze in Ulan Bator
While the rest of the world talks about monetary easing, in Mongolia, the resource-rich nation of 3m, there is a credit crunch.
Mongolia’s GDP grew at more than 15 per cent last year, sparking fears of overheating and inflation concerns that have prompted the government to tighten monetary policy. As a result, banks have faced a liquidity crunch since last autumn and commercial loans are hard to come by in Ulan Bator these days. Continue reading »
Guest post: India should be wary of Europe trade negotiations
By Bob Dowling and Akshay Mathur (left) of Gateway House
European and Indian negotiators will sit down in New Delhi on February 10 amid optimistic talk that they will complete a free trade agreement. If they do, they’ll be initialising a deal for India in haste. For many reasons, it’s better they keep their pens dry, enjoy a good dinner, shake hands and go home. Continue reading »
Further reading: mangled logic
Friday’s picks from the beyondbrics team: The democratic experiment in Wukan challenging China’s status quo; why Russia’s logic over its position in Syria has become hopelessly mangled; unraveling the mysteries of a so peaceful revolution in Myanmar – so far; and how capable is China of protecting its overseas citizens? Continue reading »
Indian industry: don’t wait for a bounce
Indian industrial output growth braked sharply in December to 1.8 per cent, down from 5.9 per cent in November, according to data released Friday.
But the lower than expected output is unlikely to accelerate the Reserve Bank of India’s widely-anticipated April cut to interest rates, economists told beyondbrics. And regardless, any rate cuts won’t do much to revive investment without the kind of meaningful policy reform that the Congress Party-led government has so far been unable to provide. Continue reading »
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