Daily Archives: Feb 16, 2012

The Popocatéptl volcano’s snow-capped peak looms beyond Mexico City on a clear day. Much of the time, Popo is on yellow alert. Which is rather like the Mexican economy. Nobody really expects an eruption, but it’s probably better to be on the safe side, just in case.

The 0.42 per cent growth in last year’s fourth quarter, reported by the national statistics agency on Thursday, came as a surprise to many analysts – who on average were expecting about twice as much. Read more

By Pan Kwan Yuk and Elizabeth Paton

Bernard Arnault, chairman and chief executive of LVMH, recently stuck his neck out and said he expected 2012 would be as good of a year for the luxury goods industry as 2011 and 2010.

But if the going is as good as he says it is going to be, then what is the owner of Louis Vuitton, Dom Pérignon and Dior doing shopping around for mass-market Chinese and Indian brands? Read more

Dubai or Bahrain: which is safer for bond investors? A year ago the answer was easy – Bahrain. Dubai’s reputation had been rattled by the manifest difficulties of its overborrowed companies.

But in the wake of the Arab Spring, things look different.  The rulers of Dubai have avoided the turmoil that has struck the region. Bahrain, of course, has not, with anti-government protests early last year that provoked a violent reaction from the authorities. It’s clear where investors prefer to put their money. Read more

Perhaps the UK isn’t such a cosy place for exiled oligarchs after all, as Mukhtar Ablyazov discovered on Thursday to his cost.

As the FT reported, the Kazakh tycoon accused of siphoning off billions of dollars from the big Kazakh bank where he served as chairman has been sentenced to 22 months in prison after a British High Court judge ruled that he had breached court orders. Read more

Azerbaijan traditionally plays safe with its oil windfall, buying mainly US bonds and treasury bills. But now the country is following a trend set by other sovereign wealth funds, and investing more adventurously in gold, real estate and private equities.

A lot of money is at stake. The state oil fund of Azerbaijan has accumulated more than $29bn since its foundation in 1999 as a storehouse for the country’s oil export revenues and earnings from transit pipeline fees. Read more

Brent crude topped $120 per barrel on Thursday – hitting its highest intra-day level for six months. It’s been climbing for four days with investors driven by fears of tensions over Iran and an expected dip next month in North Sea production. Read more

Might Polar, Venezuela’s biggest and certainly best-loved private company, be taking Hugo Chávez’s government to court? It looks that way, according to a fascinating exclusive on Reuters. More interesting still, Polar’s action could pave the way for other expropriated Venezuelan companies to do the same.

According to the news story, the claim against the Venezuelan government is being led by Gambrinus Corp, a Barbados-registered holding company, over the 2010 nationalisation of a Venezuelan fertiliser company, Fertinitro. Read more

Poland’s economy has been one of the most robust in the EU, growing by 4.3 per cent last year, thanks in large part to its resilient domestic market – which has been hugely helped by banks flooding borrowers with cash.

However, banks now look to be tightening up their lending – which could be bad news for Poland’s growth prospects this year. Read more

Within three years, greater China will spend more money on still wines than the UK, and become the world’s second biggest wine consumer by value, after the US.

And along the way, the traditional preference for red in China will be accompanied by a growing taste for white wine.

So says Vinexpo, the global wine and spirits exhibition group, which on Thursday in Shanghai spelt out its views of the fast-developing Chinese wine market.  Read more

It never rains but it pours for African gold miners, who have been struggling to exploit the world’s new-found love affair with the precious metal.

African Barrick Gold (ABG:LSE) became the latest to blame extremes in weather for production problems at its mines on the continent on Thursday. Read more

By Barbara Stocking of Oxfam

With the news that Robert Zoellick will step down as president in June, the World Bank proclaimed the accomplishments of his tenure: $247bn in support to developing countries; alerting the world to a looming food crisis and marshalling resources to deal with it; a record $90bn raised to help the poorest countries cope with the financial crisis threatening to reverse years of progress.

It seems incredible then that the World Bank’s clients – the countries who have to live with its policies and programmes – have no say in who leads this institution. Read more

Indian supermarketHow many modern Indian consumers will there be? A management consultancy report this week forecasts that the country’s consumer spending is set to soar in the next decade,  rising from $991m to the tune of $3.6 trillion by 2020.

But economists told beyondbrics that the Boston Consulting Group’s forecast – contained in a report that is bullishly entitled “The Tiger Roars” – could only be achieved if the government actually implements its ambitious reform agenda. And that is far from certain. Read more

Lots of sturm und drang in Brazil over the latest round of budget cuts. Slicing R$55bn, or $32bn, off federal spending, it is hoped, will shrink the country’s interest rates, which remain among the highest in the world. Will the plan work? Read more

[This post replaces a previous version in which we misinterpreted the direction of the ETF's currency hedging strategy. Thanks to BB readers MJT and Justin Cormack for spotting our error.]

The world’s first renminbi-denominated ETF tracking the gold price launched this week, seeking to take advantage of surging appetite for both bullion and the Chinese currency. Yet, since it started trading in Hong Kong on Tuesday, the Hang Seng RMB Gold ETF has failed to attract much interest from investorsRead more

* China set to become biggest gold market

* 2012 outlook spoils African Barrick dividend party

* China central bank says alert to systemic stability risks

* Greek rhetoric turns into battle of wills

 Read more

Photo: Bloomberg

The announcement that Grupo Elektra is to acquire South Carolina-based Advance America marks the Mexican retail and banking group’s first investment in the US financial services market.

It is also the latest sign of Mexican companies expanding aggressively in the US to provide products and services to the rapidly growing Hispanic market. Read more

Thursday’s picks from the beyondbrics team: why India’s powerful supreme court is a concern for foreign investors; new rules need to be drawn up in the relationship between Turkey and the US; Pakistan moving down a road to isolation it can ill afford; and why, if the Arctic is the next century’s new world, China will get there first. Read more

Has a mainland-China-style credit crunch hit Hong Kong?

There is certainly a lot less liquidity sloshing about the place, thanks to a combination of Basel III capital requirements and more Hong Kong dollar deposits being converted into renminbi – a currency widely expected to appreciate against both the US dollar and the Hong Kong dollar, which is pegged to the greenback. Read more

After two years outstripping its Asian peers, Indonesia’s stock market looks unlikely to repeat the feat this year. ING fund manager Kelly Chung tells the FT’s Sarah Mishkin why the nation’s equities may not be the best bet, despite the booming economy.

* Greek rhetoric turns into battle of wills

* Obama attacks Chinese business practices

* Iran signals readiness for nuclear ‘dialogue’

* Assad announces reforms as crackdown continues Read more