Daily Archives: Mar 30, 2012

Foreign exchange controls in Argentina may have made it harder for people to get their hands on dollars, but has far from dampened their desire to do so.

Look at what is known in English as the blue chip swap (BCS) rate (the Spanish name is contado con liquidación or just contado con liqui) - a mechanism whereby assets are bought in Argentina in pesos and sold abroad in dollars. It’s a legal way of getting dollars out of the country – something the government is desperate to avoid. Read more

McDonald’s made headlines when it launched its first restaurant in Moscow in 1990 bringing the iconic US hamburger to the capital of the Soviet Union. Twenty one years and a political and economic revolution later, the US fast food chain is putting the last piece of its Russian business model in place and negotiating a franchising agreement with a Russian company.

McDonald’s has chosen Rosinter, the Russian easy dining restaurant chain, to become the first investor to open and operate its hamburger outlets under a franchise in Russia, RBC Daily reported on Friday. Read more

This is the first in an occasional series reviewing books and arts from around the beyondbrics world.

Katherine Boo has managed something extraordinary in her first book, Behind the Beautiful Forevers. She has written a “Big India Book” that is anything but. Read more

A quick look at the balance sheets of banks in Slovakia, the Czech Republic and Poland would reveal well-funded institutions that easily meet tough new capital requirements – the kind of thing that would make west European bankers green with envy.

But it is west European banks who are creating just about the only cloud looming over central Europe’s banking sector – because they, in large part, own it, as was made clear at a banking conference in Prague this week. Read more

Pranab Mukherjee, Indian finance minister, announced on Friday that foreign institutional investors (FIIs) will be examined for any tax liability, but that their individual non-resident clients will not be forced to pay up or reveal their identities.

The announcement failed to specify whether FIIs themselves – or their India-based brokers – would be pursued over their customers’ possible liabilities – leaving tax consultants still uncertain about Mukherjee’s intentions.

Even though India’s tax rules clearly need an overhaul, this week’s events will do little to improve the country’s reputation among international portfolio investorsRead more

By Sarah Mishkin and Taufan Hidayat

Violent protests this week have pushed Indonesia’s opposition to reject the government’s plan to cut spending on subsidising fuel.

The subsidies accounted for 20 per cent of government total spending last year, and analysts have said that cutting is needed if the government wants to limit its deficit and make room for investing in long-term growth projects. But pushing the cuts though might be less simple than first thought. Read more

Just when the mood among investors in central and east Europe is improving, along comes a warning from the International Monetary Fund about the region’s economic “hangover”.

Blogging on the Fund’s website, IMF economists Christoph Rosenberg and Christoph Klingen say that three years after the global economic crisis ended emerging Europe’s credit boom,  many loans “so readily dished out before the crisis have now gone sour”. Read more

EM equity funds had their first net outflow of the year in the week to Wednesday as flows to EM bond funds continued their downward trend. Enthusiasm for EM funds in general is running out of steam. Read more

James Mackintosh looks at the relative performance of emerging markets to the US. Are we seeing regime change, or are EMs flashing a warning sign again?

Being a millionaire isn’t what it used to be. In their new 2012 Wealth Report, the property consultancy Knight Frank and Citi Private Bank take a look at the rise of the centa-millionaires of the world – those with at least $100m in liquid assets.

More centa-millionaires are popping up across the world thanks to what the report says is the central trend dominating the world’s prime property markets: “the relentless growth of ‘plutonomy’ economics, a phenomenon that sees the wealth of the richest 1 per cent  growing far quicker than that of the general population.” Read more

* Apple backs reform for Foxconn staff

* Brics nations threaten IMF funding

* Eurozone plan to hold €240bn in reserve

* BRICS Exchanges Start Futures Aimed at Wealthy Individuals Read more

Hungary is once again the darling of central Europe among foreign investors. Well, for a day or two at least, while news reverberates of the opening of a Mercedes plant at Kecskemét, bang in the country’s centre.

And reverberate it well might, given that the high-tech plant is an €800m investment, directly creates some 3,000 jobs (and about a further 10,000 indirectly) and its planned output of 100,000 Mercedes A-class and B-class compact cars will generate around 1 per cent of Hungary’s GDP. Read more

Friday’s fare from the beyondbrics team: where next for the oligarch commodities battle? Why Singapore is the new place-to-be for China’s rich; more Brics thoughts and another acronym – Crabs; and how banks in China are doing too well. Read more

South Korea’s policy makers must be breathing sighs of relief thanks to signs that the economy has been perking up recently.

Industrial production increased 14.4 per cent in February from a year earlier, after a Lunar New Year holiday caused contraction last month. Still, the pace of growth is slowing, with output rising 0.8 per cent month on month in February, compared to 3.2 per cent in January. Read more

Apple’s decision to back wide-ranging pay and labour reforms at the Chinese factories of Foxconn, its biggest contract supplier, will clearly raise costs at both companies.

But the Apple empire will not see a serious dent in its profitability, as its high-tech competitors will have to follow suit. And it’s a price worth paying to keep on the right side of consumers who don’t like the idea of buying iPhones made by slaves – and of the Chinese authorities who have backed pay rises for workers to help spread the benefits of economic growth. Read more

When is a public company really a private company? When its controlling family members fall out, one of three brothers is ousted on grounds of alleged insanity, and the other two are later  arrested on suspicion of corruption. And when around $5bn is a wiped off the company’s market cap in one day and minority shareholders are left helpless – that’s when. Read more

* Brics nations threaten IMF funding

* Eurozone plan to hold €240bn in reserve

* Madrid commits to reforms despite strike

* Apple, Foxconn revamp China work conditions Read more

“Zero,” said Hugo Chávez firmly, when asked almost three years ago what the chances were of Colombia’s state oil company Ecopetrol having a hand in developing Venezuela’s oil-rich Orinoco Belt.

That was back when Alvaro Uribe was Colombia’s president, and relations with Venezuela were at rock bottom. What a lot has changed since Juan Manuel Santos replaced him. Read more

There have long been fears that President Dilma Rousseff might one day be overwhelmed by infighting in her enormous coalition, which at last count was comprised of 17 parties.

Lacking the charisma of her predecessor, former president Luiz Inacio Lula da Silva, Dilma has a different style, commonly known as “kick butt”. She simply replaces those who fall out of line. Read more