Daily Archives: Oct 1, 2012

Here’s something you don’t hear very often: Chile and Russia are quite similar.

Odd as that might sound – after all, Chile conjures up images of success, stability and transparency while Russia has, as Ben Aris of bne put it in a post here recently, an “appalling investment image” – that was indeed Michael O’Flynn’s pitch to Chilean investors at a recent conference in Santiago. Continue reading »

HSBC manufacturing purchasing mangers’ indexes for Mexico and Brazil, published on Monday, give support to what is becoming a prevailing view on both countries: that Mexico’s outlook remains strong if uncertain; and that the downturn in Brazil is bottoming out. Continue reading »

There were a lot of things for investors to take into consideration in South Africa on Monday: ANC nominations; the recent Moody’s downgrade; poor PMI numbers; the start of an inquiry into the Marikana strike deaths; and, not least, the inclusion of the country’s debt into a key bond index.

As a result, markets have been a little up and down, to say the least. Continue reading »

The core economies of central Europe are continuing to show signs of a slowdown, despite some signals that the downturn may have bottomed out in the eurozone and in Germany – the original sources of the disruption hitting the Czech and Polish economies.

Poland surprised on the downside on Monday, with worse than expected Purchasing Managers’ Index numbers. Poland recorded 47 on the index – where anything below 50 indicates a contraction – compared with 48.3 in August, making a sixth straight month of PMI falls. Continue reading »

Photo: Bloomberg

Turkey won itself a dubious honour at the weekend: a fuel tax hike made it the mainstream economy with the most expensive petrol in the world. It all depends on the vagaries of the exchange rate of course, but the new price of TL4.83 a litre, or €2.08, outstrips Norway’s €2.06, according to AFP, leaving other high fuel tax economies such as Italy, the Netherlands and Spain some way behind.

Then the government followed by increasing gas and electricity rates by 10 per cent on Monday. Continue reading »

Vladimir Putin has been holding forth about what Russia will gain by investing billions of dollars in preparations for the 2018 World Cup. Apart from boosting investment in infrastructure, the football will have a positive impact on the health of the nation by encouraging people to quit smoking and drinking and play sports instead. Or so he says. Continue reading »

A note from Pimco on Monday – No Free Lunch? The Real Impact of Lower Rates in Brazil – is really, despite its title, about the impact of government interference in the commercial decisions of publicly traded companies.

The results, unsurprisingly, do not get a thumbs up from the point of view of investors in affected companies, primarily in the commodities and utilities sectors. And, the authors suggest, the only place to hide is in consumer plays where prices are already pretty rich. Continue reading »

It’s a big day on Tuesday for investment banker Uche Orji and, potentially, for Nigeria’s future fiscal stability, too. Orji, who has worked at JP Morgan, Goldman Sachs and most recently UBS, in New York, starts on Tuesday as CEO of the Nigerian Sovereign Investment Authority.

His job will be to establish and manage the country’s proposed $1bn sovereign wealth fund, which is meant to safeguard some oil revenue for later use. Given the many billions of petrodollars squandered or stolen by senior officials in recent decades, few dispute that the SWF is a good idea. But it has not been welcomed by all. Continue reading »

By Peter Attard Montalto of Nomura

Investors in South Africa have always had a difficult time reconciling a bearish long-run picture with at times short-run bullish dynamics. We are in just such a situation at the moment. On the positive side we have an economy that is feeling the effects of the eurozone crisis and slowing but retaining enough momentum to prevent a recession, a fiscal consolidation path that is broadly credible, and a financial system that is sound and sheltered from the troubles of its global peers, plus a credible central bank.

But underneath is a long-run potential growth rate at 3.75 per cent – far too low to reduce the endemic structural unemployment issues (‘real’ joblessness is around 38 per cent) and being kept that low by a mixture of policy and politics. The potential for long-run social instability is therefore a key issue, and one that the rating agencies have been paying close attention to. Continue reading »

Investors are betting that Georgia’s parliamentary elections on Monday won’t harm the country’s economic prospects.

There’ve been some ugly campaign exchanges between leaders of president Mikheil Saakashvili’s ruling UNM party and the opposition Georgian Dream of billionaire businessman Bidzina Ivanishvili.

But, as the chart below suggests, international fund managers are taking it in their stride: they expect UNM to win and Georgia’s business-friendly policies to stay in place. Continue reading »

* China manufacturing remains sluggish

* Asia’s Vulnerabilities Show

* Xstrata deal close after move on pay vote

* China fears undermine commodity currencies Continue reading »

Indonesia’s central bank is likely to keep interest rates on hold at a record low next week, after inflation figures came in slightly lower than expected and the trade balance moved back into surplus.

Consumer prices rose by 4.3 per cent on an annual basis in September, according to government data released on Monday, lower than the 4.6 per cent average forecast from economists polled by Bloomberg. Continue reading »

Monday’s picks from the BB team: Syrian rebels learn patience; Erdogan’s long goodbye; Colombian shale gas tussles; and the Chinese and Indian middle class. Plus: Slavophiles versus Westernisers; China’s property bubble, again; and what the ANC membership tells us about South Africa’s future.
 Continue reading »

Privatisations in Romania have acquired something of a reputation for controversy and confusion. The latest, the urgent sale of chemicals maker Oltchim, has all the hallmarks: a loss-making state enterprise, international pressure for a rapid deal, a controversial tycoon (pictured), maladroit government handling of the case, and now serious doubts about the company’s future.

As of early Monday, Oltchim’s fate hung in the balance. Continue reading »

A slew of PMI numbers for Asia, and precious little sign of economic recovery in any of them.

For the bulls there’s the crumb of comfort that there were no unexpected shocks in the figures. But for bears there was much more to chew upon – with factories in China and elsewhere struggling in the face of weak export demand from the US and Europe.

East Asian markets were mostly closed for a holiday. Those that were open, including Jakarta and Mumbai, drifted lower in cautious trading. Continue reading »