Daily Archives: Jun 29, 2012

The scene is in the office of Brazil’s president Dilma Rousseff, in the Palácio do Planalto, her presidential palace in Brasília. After ushering out all underlings and obsequious ministers to ensure she is alone, she turns to a mirror on the wall and asks: “Mirror, mirror, who is the most popular president of them all?”

The mirror replies, after some Hollywood special effects: “No, it is not Barack Obama, not even close. No, it is not Cristina (Argentina), next door. No, it is not even your predecessor, former president Luiz Inácio Lula da Silva, as wildly popular as he may have been. It is you my Presidenta.” Read more

Carlos Slim’s América Móvil is giving the Argentine government more to smile about.

After it emerged that investment vehicles owned by Slim now held 8.4 per cent of the country’s biggest company, YPF (which the government is looking to render respectable in the eyes of international investors after its nationalisation in May), Slim’s Claro mobile phone group has announced a $249m investment in ArgentinaRead more

Turkey was the fitting venue for a fresh debate on emerging markets: less how to get more of them than what to call them.

Industry bosses meeting at this month’s Consumer Goods Forum – who together preside over an aggregate €2.5tr of sales, approaching the entire economic output of Germany – were all keen to tap growth in emerging markets. But they were more coy about saying so, with an increasing number of speakers referring to “fast growing markets”. Read more

Stelleo Tolda, chief operating officer of MercadoLibre, says he really didn’t think the company he helped launch in 1999 would grow to become Latin America’s largest online trading platform.

Thirteen years later, with 1,600 employees and almost 70m registered users, MercadoLibre – which means “free market” in Spanish – dominates ecommerce in the region, where it matches buyers with sellers and facilitates payments in 13 countries. Read more

By David Sneath of Chatham House

Mongolia’s June 28 election is set to produce a coalition government with no party in overall control but with the right-leaning Democratic Party commanding the largest number of seats in the nation’s parliament, the Ikh Khural.

Tellingly, voter turnout fell to a historical low of around 65 per cent, from 74 per cent in the 2008 parliamentary elections and 82 per cent in 2004. This signals a steadily rising public cynicism regarding party politics, which has failed to deliver improved living standards for the majority of the population despite the recent ‘mineral boom’ that boosted last year’s economic growth to 17 per cent. Read more

sugar cane







Louis Dreyfus Commodities on Friday said it would raise up to $550m from the flotation of a stake of its Brazilian sugar unit, the latest sign that the publicity-shy commodities trading houses are moving to the public domain.

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Here’s a neat way of showing the shift in the balance of economic power. Beyondbrics was having a quick read of McKinsey’s Urban world: Cities and the rise of the consuming class and this rather interesting graphic caught our eye.

It shows the centre of gravity for world GDP over time. What’s interesting is not just the shift, but the speed. Read more

“Creating new jobs, developing Hungarian businesses to reach new markets, and investment promotion for foreign investors. These are the aims of Hungary. Cost efficiency, high human capital productivity and business-friendly environment. These are waiting for you in Hungary,” – so claims the Hungarian Investment and Trade Agency.

That’s not a view shared by Budapest Airport Zrt, a foreign consortium led by Hochtief of Germany, which operates Hungary’s main international airport. Read more

What a coincidence. Within a day of Indian prime minister Manmohan Singh taking up the finance portfolio on Wednesday,  and pledging to “revive the animal spirits of the country’s economy”, the finance ministry was doing just that.

Officials announced a decision that investors had long been hoping for: the revision of General Anti-Avoidance Rules that many had blamed for foreign fund managers pulling out of the country.

But it turned out that Singh was wasn’t responsible. And his apparent efforts to distance himself from the move don’t bode well for Indian economic reform. Read more

Kiev is in an extra cheery mood this weekend, expecting a record inflow of fans for the Spain vs Italy Euro 2012 European football championship final hosted in the Ukrainian capital on Sunday.

The authorities hope that the final will cap what’s been a successful tournament for Ukraine. Even though the national team was knocked out early in the competition, the economy has done well.  Euro 2012 seems to have attracted about 1m fans to Ukraine, twice as much as pessimists predicted and roughly in line with (optimistic) official predictions. Read more

Indonesia’s cautious president, Susilo Bambang Yudhoyono, usually likes to stay above the cut and thrust of the investor disputes that break out habitually in this vast country where there are as many money-making opportunities as there are unclear regulations.

But he has waded into a politically-charged battle between Churchill Mining, a small company listed on London’s junior Aim exchange, and the district government in East Kutai, Kalimantan. Read more

On a day of good news from Brussels, Moscow has a quietly-positive announcement of its own. Russia’s Federal Service for Financial Markets, the regulator, said it would give Euroclear Bank, Clearstream and other depositories direct access to the country’s sovereign debt markets through Russia’s own central depositary.

A bit technical, maybe. But the prospect of better access cheered investors in the Russian bond market, where the yield on the benchmark 2018 rouble issue fell 10 basis points to 8.23 per cent on Friday morning. Read more

Vietnam is cutting interest rates for the fifth time this year, the central bank said on Friday. The SBV reduced the refinancing rate to 10 per cent from 11 per cent, and the discount rate to 8 per cent from 9 per cent, effective from July. Read more

* Emerging markets stocks rise most in 5 months as Europe eases Spanish debt terms

* US exempts China from Iran oil sanctions

* Emerging markets take bigger share of IPOs Read more

Investors in emerging markets have joined in the general celebrations marking the better-than-expected outcome of the European Union summit in Brussels.

Equities, bonds and currencies rallied on Friday, not least  in commodity-exporting countries, which could benefit from a recovery in commodity prices.

But the experience of previous summits shows that such joy is usually short-lived.  Eurozone leaders haven’t escaped from the financial swamp yet, they have merely surfaced successfully for a large gulp of air. Read more

Will free trade agreements help South Korea revive foreign interest in the country, which has been overshadowed by its giant neighbours such as China and India? Invest Korea, the country’s state-run trade-promotion agency, certainly hopes so.

South Korea welcomes greenfield investment by foreign investors although there is still some hostile public sentiment toward foreign buyers. But it is becoming increasingly difficult to attract FDI into Asia’s fourth-largest economy as China and India have emerged as magnets for foreign investments in the region. So what can Korea do? Read more

This Friday’s further reading: Egypt’s ongoing power struggle divides commentators and scares investors; India and China are in a love-hate relationship; as Mexico goes to the polls, expectations and tensions rise; and Brazilians can’t pay their car loans any more. Plus, what lessons can cities learn from Lagos? Read more

Virtually everyone who sells anything wants to know how to sell more of it to the Chinese. Handily, here’s Bain & Co to tell them how not to do it.

The consultancy partnered with Kantar Worldpanel to do what they claim is an “innovative study of 40,000 Chinese consumers from 373 cities in 20 provinces”. The report promises to help brands figure out “what Chinese shoppers really do but will never tell you”. Read more

The first half of 2012 saw a lot of furious activity for investors in emerging markets, but the period ends with a fairly quiet week in terms of flows of emerging market funds.

In the week to Wednesday, EM-dedicated bond funds saw $671.2m come into their coffers, while EM equity funds saw $262.6m leave their books, according to EPFR, the research company.

That leaves both EM bond and equity funds with almost the same net inflows for the six months – $14.2bn for bonds and $14.1bn.  But behind the superficial similarity, there are big differences. Read more

Insert casino here

The four big casino complexes rising along the scenic Manila Bay in the Philippines haven’t opened their doors yet, four years after the government awarded the exclusive licenses as part of the country’s ambitious plan to cash in on Asia’s gambling and tourism boom.

But that has not stopped Enrique Razon Jr, the 52-year old chief executive of the country’s biggest port operator, from almost doubling his net worth in just a matter of months after a public offering of shares in his Bloomberry Resorts and Hotels, a holder of one of the lucrative, limited-edition permits. Read more