Daily Archives: Mar 28, 2012

Brazil’s legal system never ceases to amaze.

On Wednesday, shares in the BM&FBovespa exchange plunged after it said a local court had ordered it to pay a share of R$8.42bn ($4.62bn) for its alleged role in a scandal at the central bank in 1999. Yes, you read that right – 1999. Read more

Argentines ought to be grateful. Their government has taken action against one of the hitherto little remarked upon hazards of modern life: reading.

Just think: Argentines – and probably many more worldwide – have been unwittingly exposing themselves to potentially dangerous levels of lead in the ink in the publications they peruse. No longer. Under thoughtful new rules, imported books and magazines will be held up by customs authorities while the lead levels in the ink are checked – all in the name of public health and environmental protection, its supporters say. Read more

Tough talking from the command posts of the currency war on Wednesday. Fernando Pimentel, Brazil’s trade and industry minister, told Reuters his country would push for harsh language on currency manipulation by the US and the eurozone in a communiqué following Thursday’s Brics summit in New Delhi.

Over in Washington, Reuters quoted Tim Geithner, US treasury secretary, calling on China to allow its currency to appreciate further. Meanwhile, a Brazilian paper had Li Ruogu, president of the Export-Import Bank of China, calling on everyone to calm down a bit. Read more

If proof were needed of the importance of China to mobile phone makers, follow the chief executives. Both Apple’s Tim Cook and Nokia’s Stephen Elop have been in the country in the last few days – Cook to put Apple’s case in trademark disputes, Elop to launch a new smartphone.

Both companies need China – but they are coming from very different positions. Read more

Fidelity Worldwide Investments, one of the world’s biggest mutual fund managers, has bailed out of the Indian market after making a loss every year since it went there in 2004.

It sold its India mutual funds business to the financial services arm of Larsen & Toubro, an $11.7bn Indian engineering and construction company, the companies said on Tuesday. Read more

A bit of a vindication for Poland’s Jacek Rostowski from the OECD on Wednesday. The rich nations club is one of the first international institutions to back the finance minister’s plan to drive the budget deficit to 2.9 per cent of GDP this year.

Rostowski’s numbers had been called into question by analysts and even by the European Commission, which felt that the fiscal squeeze aimed at bringing the deficit down from 7.9 per cent in 2010 was too ambitious. Read more

Sberbank’s annual results published on Wednesday did nothing to damage the Russian government’s prospects of selling a $6bn chunk of equity later this year.

But they won’t have been of much help either. Fourth-quarter net income of Rs60.1bn came in slightly below expectations and were down 16.5 per cent on the same period a year earlier. However, on a dull day, the stock beat the market, falling by only 1.7 per cent against 1.8 per cent in the Micex. Read more

With the help of the strong oil price, Russia was on Wednesday going ahead with the sale of $7bn-plus in eurobonds in the biggest issue by an emerging market state since late 2009.

In a widely-expected placement, Moscow is issuing $2bn of five-year bonds at 230 basis points over US Treasuries, $2bn in 10-year bonds at a spread of 240 basis points and $3bn of 30-year bonds at 250 basis points, according to Reuters and Bloomberg. Read more

Changes are afoot in Taiwan’s tax system – and not in a good way for businesses and investors, judging by Wednesday’s first meeting of the island’s new taskforce for fiscal soundness. Read more

* China profits warning spreads gloom

* Thai exports bounce back after floods

* Abu Dhabi eyes £10bn injection into RBS

* TCI initiates legal action against India Read more

It doesn’t take much to knock confidence in the Chinese stock market these days. On Wednesday it was a bearish report from Société Générale cutting its 2012 profits growth forecast for greater China to zero.

The Shanghai Composite index fell 2.6 per cent, its largest daily fall since November, as investors added profit concerns to all their other worries about the coming slowdown in the Chinese economy. And right on cue, Jiangxi Copper, the country’s biggest producer, posted an 18 per cent drop in net profits, which took 5.5 per cent off its shares. Read more

Can South Korean banks become regional players, let alone global giants? More of them are now looking to enter foreign markets such as China and India to seek alternative sources of revenue as they face stagnant growth at home. But analysts are not convinced if they can crack emerging markets in Asia. Read more

Wednesday’s words of wisdom from beyondbrics: who is the right leader for the World Bank? The FT puts its hat in the ring. Plus: Kremlin cronyism; Papal politics; and the Brics summit (x3). Read more

A bit of good news for flood-hit Thailand. Exports rose unexpectedly last month for the first time since the floods struck in October. After three months of decline, exports were up, albeit only by 0.9 per cent, according to figures published on Wednesday.

But the relief may be short-lived since industrial production in February was down 3.4 per cent, the sixth month in a row, with less than half of the plants in flood-hit districts back in production. Don’t expect a return to normal production for at least another six months, is the word from Bangkok. Read more

By Parag Khanna of the London School of Economics

The term “Brics” is the ultimate double-edge sword of global political economy. It connotes a set of fast-growing and increasingly influential economies (also described as “rising powers” or “second world”). But it imputes to them a sense of unity that on closer inspection may not really exist. This week’s Brics summit in New Delhi reveals the potential and flaws of both aspects of the term – and why India ultimately has to be self-reliant. Read more