Daily Archives: Mar 16, 2012

Calling all bond-buyers out there: there’s a new sovereign coming to market soon. Boasts solid growth (5.1 per cent last year); six years of fiscal surplus, manageable public debt levels, rising central bank reserves and ratings agencies Moody’s and Standard & Poor’s both give it a positive outlook.

Its name? Bolivia. Read more

Thriving restaurants, property deals, even golf courses and MBAs. The pace of change in Cuba is picking up.

At the end of this month the Pope will do his bit for economic reform as he makes the first Papal visit to the island since 1998. In isolation, the visit presents little threat to the status quo. But it will give a big boost to those members of the Catholic Church taking an increasingly active part in Cuba’s second revolution. Read more

Whoever wins the privatisation auction of Depa, the Greek state gas group, this month, will be able to influence EU-backed plans to transport Caspian gas to Europe and reduce dependence on Russian energy supplies.

So it should come as no surprise that Gazprom, the Russian gas monopoly, on Friday confirmed that it was considering throwing its hat in the ring and placing a bid for Depa. Read more

The Bric countries are making headlines in Africa but when it comes to doing business there are plenty of other emerging economies that are also digging deep into the fast-growing continent.

Standard Bank highlights the EM 10 – ten emerging economies that have seen their trade triple in the last decade to $330bn. The big four are the Brics, with a $250bn share in 2011, but the remaining six states between them account for a full $80bn – and are seeing their activities grow faster than the Brics. Read more

What’s happened to emerging market consumer stocks? The general thesis was that  developing nations would increasingly see consumer spending mushroom, with consumer companies – and their shareholders – reaping the rewards.

Last year was a bad one for EM stocks, but 2012 has seen rally that has, year to date, out-performed developed markets. And yet EM consumer stocks are missing out – why? Chart of the week takes a look. Read more

By Gábor Takács

“Hungarian state captured by private interest groups” – this was the alarming title Transparency International gave to a press release last week on its report “Corruption Risks in Hungary 2011”. The media happily latched onto to this phrase, citing the report as a further evidence of the ruling centre-right Fidesz party ruining Hungary’s democratic order.

Certainly, the 279-page report, contains a wide range of criticism covering the period since 2008. Some concern the current government, others former left-wing administrations, and some both.  But the conclusion that the Hungarian state is ”captured by powerful interest groups” is by no means a balanced account of the report’s findings – or the actual situation. Read more

While growth in many emerging markets is decelerating could it be that Russia is bucking the trend?

Russian industrial production grew at the fastest pace in more than a year last month, beating even the government’s forecasts. But how much of that is structural and how much seasonal? Read more

Being the biggest player in the biggest market in central Europe is paying dividends for Polish insurer PZU, which is now planning an aggressive regional expansion.

The company plans to set up a joint venture fuelled by 6-7bn zlotys ($1.9bn-$2.2bn) of its own money and a similar amount from potential partners including private equity funds and the European Bank for Reconstruction and Development. Read more

In the red corner: local contentism and currency war. In the blue corner: free trade and a floating currency. And the red camp wins with a technical knock-out in round one.

That was the surprise result of the clash of two economic models in Mexico City on Thursday, as Mexico went down without a fight before Brazil’s demand that it re-write a 2002 car trade accord. The nimble Mexican featherweight gave way to the lumbering heavyweight from Brazil. Read more

Did Mexico lose its battle with Brazil? That is what many pundits think happened after the two countries on Thursday settled a month-long wrangle over car exports that had, as its centre, the threat from Brazil to end a 2002 agreement on free trade in light vehicles.

Observers were quick to point out that Mexico had vowed to set 2011 export levels as a floor for any agreement on capping future car exports to Brazil. Clearly, that did not happen. Read more

Ukrainian president Viktor Yanukovich is off to Moscow next week in his latest effort to secure economic support from his powerful neighbour, with a discount gas supply deal near the top of his list.

It’s a regular trip. But Kiev’s financial needs are pressing: S&P on Thursday downgraded the credit outlook on Ukraine to “negative” while ministers talked of rescheduling $3bn in debts owed to the International Monetary Fund under a 2008 programme, even as Ukraine’s current programme has been suspended. No wonder Yanukovich needs Russia. Read more

By Gokul Chaudhri

Pranab Mukherjee, India’s finance minister, stated in his national budget announcement on Friday that the life of a finance minister is not easy, and that crafting economic policy often requires one to do things that may be painful in the short run, but may be good in the long run.

Investors in India Inc will discover that as a result of this budget they may need to bear the effects of some serious extra tax burdens in the coming year. Read more

Could investor appetite for EM bonds, voracious so far this year, be easing?

Figures from EPFR, the fund flow monitor, suggest not: inflows into fixed incomes funds climbed to $1.44bn in the week to Wednesday. But RBS, which has been very optimistic about EM funds so far this year, sees signs of a slowdown. Read more

Stanislas de Quercize thinks the world is having a crisis of confidence in its assets – and he is not thinking stock and bonds, but brooches and bracelets. So the company that he heads, the ultra-chic Van Cleef & Arpels of Place Vendome in Paris, is taking 370 pieces from its collection to Shanghai to see whether the Chinese can help out with the problem. Read more

After the Indian government released a budget that one analyst on CNBC deemed “a swing and a miss”, Sachin Tendulkar gave them some respite in the news by finally reaching an unprecedented milestone. Read more

Beijing has put the brakes on the renminbi’s appreciation after the recent export slowdown. Right? Wrong, say Hayden Briscoe and Anthony Chan of fund manager AllianceBernstein.

They argue that too much attention has been paid to this week’s comment from the People’s Bank of China that the Rmb was close to its “equilibrium value.”

“We think the currency’s  appreciation is far from over,” say the authors bluntly, well aware that they’re going against the consensus.  “The renminbi remains undervalued.” Read more

* India’s budget: Santa Claus is coming to town

* Gulf states close embassies in Syria

* Brazil and Mexico end cars battle

* N Korea announces provocative rocket launch

 Read more

Balanced. Modest. Disappointing. Thus was the gamut of reactions to India’s budget for the fiscal year beginning in April, which Pranab Mukherjee, finance minister, presented to parliament on Friday.

Granted, for a government weakened by a recent electoral thrashing and beholden to unpredictable coalition partners, “balanced” was probably about the best that it could hope for. But it is a far cry from what the Indian economy needs right now. Even though investors had set their sights fairly low, the Bombay stock market still lost 1.2 per cent. Read more

Over the past decades, Taiwanese businesses have funneled more than $200bn in direct investment into China, but there have only been $270m worth of Chinese investment into Taiwan.

That discrepancy has been a sticking point for the Taiwan government, which on the one hand wants to attract more investments to show tangible economic benefits from mending fences with China, but on the other hand is wary of any criticism that it is letting the Chinese buy up Taiwan’s prized companies and assets. So this week’s move by the government is a significant move. Read more