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.
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.
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.
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.
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.
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”.
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.
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.
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?
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.
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.
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.
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?
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.