Daily Archives: Feb 24, 2012

How do you say Whoa Nelly – slow down! in Spanish?

Faced with strong growth, rising inflationary pressure and soaring consumer credit growth, Colombia’s central bank responded on Friday by raising lending rates once again.

For the second time in as many months, the bank upped its benchmark interest rates by 25 basis points to 5.25 percent, bucking the trend in the region, which has been to hold or cut rates. Read more

Nothing says confidence in future economic growth like laying out real money to build new shops – something that some of Poland’s leading retail operations are currently busy doing.

LPP, Poland’s largest publicly traded clothing retailer, is planning to spend 150m zlotys ($48m) to add 163 shops to its central European retail network by 2013 – bringing the total for the Gdansk-based retailer up to 1,055 locations. Read more

Russia has come to its own conclusions about the disruption of its gas exports to Europe during a cold snap this month and is once again blaming Ukraine of causing the problem.

While there’s nothing new about this, the dispute appears to have triggered a decision at the highest level in the Kremlin to cut Ukraine out of the Russian gas transit business altogether as soon as possible. Read more

Inflation in Vietnam fell for a sixth consecutive month in February to an 11-month low, figures released on Friday showed.

That’s stoked speculation that the country’s central bank will reduce interest rates: according to Bloomberg, the yield on benchmark five-year bonds fell 34bp during the day, the biggest one-day drop since March 2010. Capital Economics also expects an easing of monetary policy to support growth. But too big a rate cut, it warns,  could damage Vietnam’s fragile economy. Read more

A fascinating insight into central and eastern European markets on Friday: Slovakia has issued a bond denominated in Czech crowns in a private placement to tap demand from across the (formerly non-existent)  border.

Slovakia sold 12.5bn crowns (€500m) of a floating rate bond priced at six-month Pribor – the Czech interbank rate, currently 1.5 per cent a year – plus 150 basis points. That’s comparable with similar, Slovak, euro-denominated bonds. So what’s the appeal? Read more

PTT Exploration & Production has taken on Royal Dutch Shell. Thailand’s state-controlled oil and gas company on Friday offered £1.1bn ($1.7bn) for Cove Energy, beating Shell’s agreed bid earlier this week.

Cove shares leapt by up to 25 per cent  to over 240p – well above PTT Exploration’s 220p bid and Shell’s 195p offer – as investors bet on other potential buyers emerging or Shell raising its price. Whatever happens, PTT’s move shows that Chinese and Indian companies are not the only EM players in the global natural resources game. Read more

There may be no obvious link with central Europe but the crisis in Syria is having a knock-on effect in Budapest.

Mol, the Hungarian oil and gas group, said on Friday the turmoil in Syria contributed to the company’s difficulties in the fourth quarter of 2011, when revenues from its Syrian hydrocarbon production were blocked under sanctions applied by the EU. Read more

By Rob Minto and Stefan Wagstyl

This week has seen the oil price hit new highs in euros and sterling, with worries over Iran prompting bullish calls of $150 a barrel.

So oil is on the up. And emerging markets have oil – and lots of it. But does buying emerging markets oil and gas stocks give a better return than simply investing in Brent crude, or investing in the energy majors?

Chart of the week investigates. Read more

Appetite for EM bonds looks pretty much insatiable at the moment, despite warnings that the outlook for debt isn’t quite as rosy as investors believe.

EPFR, the fund flow monitor, recorded inflows of $701m into EM fixed income funds in the week to Wednesday, continuing the dramatic reversal this year after 2011′s outflows. And Royal Bank of Scotland expects Tuesday’s Greek bail-out to sustain this optimism for some time yet. Read more

* Telefonica sets modest targets as 2011 profit halves

* Russia: GDP slows just before polls

* Gold traders in India stay away from new deals

* Blueprint for China to open up markets

 Read more

IT outsourcing is one of India’s greatest economic successes. But its expansion has created political tensions with the developed world, not least over jobs.  R. Chandrasekaran, chief executive of Cognizant, tells the FT’s James Crabtree that the future lies in innovation.

Between supply disruptions from the Thai floods and continued weakness in the US and European markets, the end of last year wasn’t an easy time for many PC companies. HP saw consumer PC sales drop by a quarter, while Dell missed analysts’ profit forecasts as hard drive costs spiked.

Not so for Asus, the Taiwanese PC maker, which on Friday reported a 23 per cent increase in sales in the fourth quarter of last year compared to a year earlier, and a 21 per cent rise in net profits. Likewise, Lenovo on Thursday also reported a hefty sales increaseRead more

Friday’s picks from the beyondbrics team:  why an emboldened Russian middle class threatens Putin’s election prospects; the clamour for Western intervention in Syria is growing; why plans to create regional governments in Somalia are good news; and is India’s education system letting down its abundant young workers? Read more

More evidence of an economic slow down in Russia, coming only a few days before the presidential elections on March 4.

On Friday, economy minister Elvira Nabiullina was quoted by Interfax news agency saying that GDP growth in January was 3.9 per cent year-on-year,  down from 4 per cent in December and 4.3 per cent in the whole of 2011.  One holiday-oriented month is not on its own of critical significance – but the trend is clear. Read more

The price of subsidized petrol in Indonesia could rise by up to a third if the government follows through on plans discussed by ministers this week.

Cutting subsidies in an era of rising oil prices would allow the government to spend more on infrastructure – which the country desperately needs – but the cuts are not without risk. Read more

The weaker yen is making South Korean exporters nervous. Many Korean companies fear their exports will lose price competitiveness abroad as they compete directly with Japanese rivals in many areas such as electronics, machinery and cars. Read more

Shares in Housing Development Finance Corporation, the Indian mortgage lender, plunged by up to 6.3 per cent on Friday after Citigroup sold its entire 9.9 per cent stake for Rs95.5bn ($1.9bn).

The deal will help the US group focus its resources on its own operations and meet tough new international capital rules at a time when there was little prospect of turning the long-held HDFC minority holding into anything more substantial. Read more

By Ben Simpfendorfer of Silk Road Associates

The speed at which Chinese industrial firms are going global has been impressive. The problem is that the Chinese banks have been slower to follow.

Sure, they may bankroll a Chinese-built dam in Africa or a cement factory in Latin America. But the money is usually lent from a China-based branch. Read more

* Blueprint for China to open up markets

* Gates attacks ‘outdated’ UN food agencies

* Meeting tests unity of Syria opposition Read more

By Ian Mount

In most countries, a rising trade surplus is usually greeted as good news. But Argentina’s announcement on Thursday of a better-than-expected 7.2 per cent increase in its January trade surplus to $550m shows such how such assumptions can be deceptive. Read more