Daily Archives: Mar 7, 2012

It’s that time of the year again. Forbes is out with its annual rich list.

While Carlos Slim, with his $69bn, retained his crown as the world’s richest man for the third year running, the wealth god has been less kind to EM’s other super rich.

Among the five biggest losers on this year’s list, four of them are from the Brics countries – namely Russia and India. Read more

China Development Bank’s initiative in bringing together the development finance arms of the five major Brics countries to sign an agreement – whereby each bank pledges to extend credit in its own currency to the four others – in Delhi later this month speaks volumes about the ambitions of the mainland policy bank. Read more

If you want to see what a booming economy is like, look up at an Istanbul billboard. Like Turkey as a whole, the city is brimful with publicity – for luxury housing developments, flights across the world and the latest Apple products.

But in an uncertain 2012, there are signs that the advertising bonanza – which is still modest by standards elsewhere – may not expand so quickly in future. Read more

MTN, the South Africa-based telecoms group with operations in 21 countries in Africa and the Middle East, left investors struggling to understand its prospects on Wednesday. Its 2011 results were decent enough and an ambitious capex programme promises future growth. But there are things to worry about, including Iran and Syria, which account for nearly 15 per cent of revenues.

MTN’s shares (MTN:JNB) rose more than 2 per cent during the day but fell back to close down 0.81 per cent. Read more

When Apple unveils the latest version of the iPad today many of the US computer technology company’s fans in Russia will be feeling more frustrated than usual.

Although Russia is famous for geeks and freewheeling spending, Apple has not yet opened a store here and its products are difficult to come by – at least through official channels. So even as they wait eagerly to see what the iPad3 has to offer, some Russians are grumbling that Apple has snubbed their country. Read more

Protesters march through Johannesburg. Photo: Getty Images

Thousands of protesters took to the street in South Africa on Wednesday, answering a call from the Congress of South African Trade Unions – the country’s biggest labour group and a member of its ruling “tripartite alliance”. Read more

By Morgan Harting of AllianceBernstein

Emerging market economies have delivered real annual economic growth of about 6 per cent over the last decade, compared to just 2 per cent in the developed world. The International Monetary Fund forecasts that emerging economies will grow at a similar rate over the next five years, bringing their share of purchasing-power-adjusted global economic activity to 54 per cent in 2016. Investors rightly see tremendous potential in these countries and are increasing their allocations to them. But there is a paradox: our research shows the link between a country’s real economic growth and the returns from its equity market to dollar-based investors has been statistically nil. Read more

Peter Mwangi, CEO of the Nairobi Securities Exchange, is fed up of Kenyans getting investment wrong.

The NSE had a calamitous year in 2011, with the all-share index falling by a full 30.6 per cent, driven down by a currency crisis that gathered force late in the year.

But foreign investors didn’t seem to mind, staying put as domestic investors deserted the market. Foreign fund managers have now reaped the benefits, enjoying an 11.5 per cent gain in the year to date. The locals have lost out. Read more

Brazil’s disappointing growth figures have added to pressure on the central bank to cut interest rates at its monetary policy committee meeting late on Wednesday in Brasília. There’s little doubt that a cut is on the way – but of what size? Economists surveyed by Bloomberg say 50 basis points, bringing the Selic overnight rate to 10 per cent a year. Investors are pricing in rather more. Who to believe? Read more

Tata Motors launched the Nano – the $2,000 “people’s car” – to great fanfare in 2009, only to produce dismal sales in the ensuing three years. As the FT reported, many analysts blamed the failure of the car on mishandled marketing. As one executive at a rival auto company put it: “Nobody wants to buy the world’s cheapest car.”

But Tata, it seems, is preparing to relaunch the Nano in the next few years in various higher-end – though not “high-end” – permutations. Read more

* People must vote for HK chief, says Tang

* One-day strike hits S.Africa, mines grind to halt

* Sonia Gandhi defends Congress after poll flop

 Read more

Malaysia’s export growth slowed sharply in January, according to figures published on Wednesday, with an increase of just 0.4 per cent, compared to a forecast figure of around 2 per cent.

But it’s not clear how much of this was caused by the weak European demand that is casting a shadow over Asia’s exporters and how much was due to the Lunar New Year holidays. Next month, we’ll know more. Read more

Roll up, roll up. At Dubai’s bond market, it’s the dim sum special on sale this week. At a tasty yield of 4.875 per cent, you can get yourself a slice of Emirates NBD, the Dubai-based bank’s 750m renminbi ($119m) bond, the first of any such transaction from the Gulf.

The bond, rated A3 by Moody’s Investors Service, the seventh highest investment grade, is another sign that China is gaining economic traction in its increasing important trade partner, the oil-rich Gulf. Read more

Wednesday’s picks from the beyondbrics team: why no region or nation will dominate the 21st century; Chinese workers beginning to discover the joys of sloth; why Mexico desperately needs to re-evaluate its education system; and does it make sense to be more generous about the pay of sporting superstars than their counterparts in business and finance? Read more

China bulls, watch out.

Forwards markets are once again flashing bearish signs for the renminbi. For the first time since mid-January, non-deliverable forwards are pricing in zero appreciation of the Chinese currency against the US dollar over the coming year.

That contrasts starkly with the expectations of most investment bank economists, who forecast that the renminbi will rise about 3 per cent against the dollar over the next 12 months. Read more

HSBC’s restructuring proceeds apace. On Wednesday the bank announced a deal to sell its general insurance businesses to French insurer Axa and Australia’s QBE for $914 m in cash, plus a share of future profits.

The disposal is a key element in the refocusing programme announced last year by new chief executive Stuart Gulliver which ends HSBC’s bid to be all things to all people in emerging markets – and has the bank concentrating on core activities. Read more

Dream on, Athens. When Beijing presented its 2012 budget this week, the main concern from investors was that the government was not going to run a big enough deficit.

But a closer look at the spending plan reveals that China may have a couple of accounting tricks up its sleeve: its true deficit is likely to be quite a bit larger than the finance ministry claimed. Read more

Vietnam’s Communist government might be confident that it can cut interest rates without destabilising the economy but analysts are not so sure.

While struggling banks and businesses will welcome the central bank’s announcement of a pending one percentage point cut in lending and bank deposit rates, economists fear that the government will relax monetary policy too soon, renewing inflationary pressures and threatening the recent stability in Vietnam’s fragile currency, the dong. Read more

* Obama attacks casual talk of Iran war

* Athens issues threat to bond holdouts

* Statoil leading race for Anadarko assets

* Big powers meet at UN on “weak” U.S. Syria draft Read more

By Leif Eskesen of HSBC Global Research

The global economic backdrop remains decidedly challenging, although there have been signs of stabilisation in recent months. So how are the Asean-5 economies of Indonesia, Malaysia, Philippines, Thailand and Vietnam holding up? Read more