Daily Archives: Jun 25, 2012

It was meant to be a strategy to reinsure investors.

But Petrobras’s efforts to win back the market by raising fuel prices and setting more realistic production goals seems to have had exactly the opposite effect.

Shares in Brazil’s state-run oil company suffered their biggest one-day fall on Monday for over three years, plunging 8.95 per cent to R$17.80 in São Paulo. Read more

It sounds ominous when the company planning one of the biggest investments in a country’s history says it is watching developments closely.

But here is what Rio Tinto Alcan has said about the impact of Paraguay’s unfolding political crisis on its plans to build a $4bn aluminium smelter. Read more

Victoria, one of Mexican brewer Grupo Modelo’s two leading brands – the other is Corona – has long been marketed with a strongly nationalist slant.

“Victoria (victory) is ours,” its ads have long proclaimed.

But that slogan could soon read “Victoria is Belgium’s” after Anheuser-Busch InBev said it was in talks with Modelo about acquiring the just over 50 per cent stake that it doesn’t already own in the Mexican brewer. Because not all of its shares have voting rights, AB InBev does not have control. Read more

Russia’s protest movement has reached the boardroom: Alexei Navalny, the anti-corruption campaigner who is in regular trouble with the police, was on Monday elected a director of Aeroflot.

It is not a total surprise that his appointment was backed by billionaire businessman Alexander Lebedev, who owns roughly 15 per cent of the national airline, given Lebedev’s sympathy for the protests. But it seems curious that the state, which controls 51 per cent, did not oppose the appointment. What is going on? Read more

One person’s crisis is another’s buying opportunity. With Europe stuck in financial turmoil, are the Brics – and in particular the Chinese – buying the place up?

Answer: yes, but not as much as you might think. Read more

Generating electricity tends to make for a boring and stable industry, the kind of investment that draws widows looking for a safe place to stash their savings, except in the Czech Republic, where the power sector is an altogether more volatile business. Read more

Not long ago, analysts talked about about a two-speed Brazil, where the consumer economy zoomed ahead while investment and output flagged.

Now consumption, too, is flagging and Brazil’s two speeds are one. Most analysts agree that Brazil, this year, will be a disappointment in terms of growth. The question is what comes next, with portfolio investors decidedly bearish but foreign multinationals surprisingly positive.

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Investors have responded with relief to the Egyptian presidential poll result which saw the Muslim Brotherhood candidate Mohamed Mursi confirmed as the country’s first democratically-elected leader.

The Egyptian stock index was up over 7 per cent on Monday, following Sunday’s 3 per cent gain, while benchmark bond yields plunged nearly 40 points. There seemed to be almost as much joy in the market as in Tahrir Square.

But it might not last long. Egypt remains at the mercy of political conflict between the old regime and the representatives of the would-be new order. Read more

A series of somewhat ill-thought out and badly-communicated restrictions on trade and investment has given many investors in Indonesia the jitters.

But, say the Indonesia bulls, the backlash has been overdone and most of the new measures on everything from mining to fruit imports are either understandable or of limited impact. Read more

A let down. That about sums up the market’s reaction to what many had hoped would be a huge rescue package for the rupee unveiled by the government and Reserve Bank of India on Monday.

The package was meant to stem the currency’s epic decline – it hit yet another all-time low against the US dollar on Friday, at Rs57.37. Instead, it will only send the rupee even lower in the short term, although it should have some positive effects, economists said. Fundamentally, however, little has changed. Read more

* Islamist leader wins Egyptian presidency

* Egypt Yields Plunge Most Since Revolt As Mursi Wins Office

* AB InBev said to near Modelo takeover for $12bn

* Qatar seeks $5bn Chinese investment quota Read more

However much India’s government prevaricates over investment laws for foreign retailers, the country’s consumer story is still a compelling one. Ikea, the Swedish furniture retailer, said on Friday it was still keen on India, even if India isn’t necessarily keen on it (yet).

Despite the on-off reform of FDI in retail, Ikea plans to invest up to €600m in the country. A smart move? Chart of the week takes a look. Read more

Monday’s further reading from the BB team: Egypt’s challenges, Pakistan’s hot summer, and Uruguay’s hotspot; Chinese investors dig in for Australian resources – and America’s backyard; what makes a failed state? Plus, can Chavismo outlast Chavez in Venezuela? Read more

A problem shared is a problem halved. The age-old mantra looks to be coming to China – specifically to the equity market.

On Monday, Qatar said it was looking to put $5bn into the country’s markets, potentially adding some muscle to China’s battle to turn investment sentiment around. Read more

Who's going to burn that?

Thermal coal is not having a good month. With eurozone concerns and slowing growth in China already dragging on commodities prices globally, coal inventories in China – the world’s biggest consumer – are near record highs. Last week, thermal coal prices hit a two-year low in Newcastle, the Australian port.

A few days ago, a US utility company took the very unusual step of declaring force majeur on coal contracts because its coal piles were full – a sign of slack demand.

Add to all this gloomy news one more item: more analysts are joining the camp that believes China might not be a long-term structural importer of thermal coal. This could mark a very important shift. Read more

* Islamist leader wins Egyptian presidency

* AB InBev said to near Modelo takeover for $12bn

* China conglomerate Fosun to scour for deals with $1bn fund Read more

Herman van der Wyck, who has died aged 78, was central in cementing what many came to hail as the City of London’s most enduringly profitable advisory contract.

The 1970s deal he worked to forge with Indonesia gave SG Warburg, the merchant bank whose core operating arms he later headed, a decades-long role assisting the government in the most populous former colony of his native Netherlands.

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