As was expected, Venezuelan bonds fell on Tuesday after Hugo Chávez was re-elected on Sunday, correcting a rally founded on hopes that his more market-friendly rival, Henrique Capriles, might win.
Well, he didn’t – much to the despair of the 6.5m Venezuelans who voted for him and who are now in mourning as they wait for signs as to what course Chávez’s fourth presidential term could take: further radicalisation of his socialist revolution, or national dialogue and reconciliation in this hyper-polarised country.
Given its gloomy view of the world economy, it is logical for the International Monetary Fund to judge that the risks to global financial stability have grown in recent months.
But it is still startling to read in the opening lines of the latest twice-yearly Global Financial Stability Report that “confidence in the global financial system has become very fragile”.
With the dangers emanating largely from the eurozone, emerging markets are better-placed than most economies to weather the storm – except for those in central and eastern Europe. There, the pressures are intense.
More evidence that Latin American multinationals – or “multilatinas” – are on the rise: Chile’s CorpGroup on Tuesday struck a deal to buy up to 100 per cent of the shares of Colombia’s Helm Bank for about $1.3bn.
Cristina Fernández, Argentina’s president (pictured), maintains her government has not “clamped” the dollar, despite imposing a rash of restrictions on greenback purchases in recent months.
Try telling that to the northern province of Chaco. It says it was forced to settle a dollar-denominated bond in pesos because it could not get hold of the dollars to meet the $260,000 payment. Argentine bonds fell 1.3 per cent on Tuesday, the first trading day since Chaco’s weekend announcement (Monday was a holiday in Argentina).
By David Edgerly
There is no question that Turkey has posted some impressive economic numbers over the last decade, numbers that underpin the electoral success of the ruling Justice and Development Party. Two of these numbers, taken from a Turkish Treasury report, show just how far the country has come. Per capita GDP is now over $10,000 compared with less than $3,500 in 2002. Inflation that had averaged 71.6 per cent between 1995-2001 is now around 10 per cent.
But can this growth be sustained? Can Turkey reach the next level of economic development with its current economic model? A leading Turkish businessman recently raised serious questions about the fundamental structure of the economy.
Just as Turkey’s economic success is a key factor in determining its political clout in the region and beyond, it’s also the case that in the short and medium term, politics looms large over the Turkish economy.
Whether prime minister Recep Tayyip Erdogan succeeds in his ambition of becoming a powerful executive president, and how that experiment turns out, is a central question in the country’s story – with big implications for business and the economy.
Sierra Leone made news earlier this year as officials boasted of a 32 per cent jump in GDP growth, buoyed by iron ore exports. But don’t break out the local ginger beer just yet.
IMF officials are bracing for see lower-than-expected GDP growth in 2012, as production estimates from African Minerals have been revised downward, according to the Fund’s representative Francis Kumah.
Tags: African Minerals, GDP, IMF, mining
Posted in Sierra Leone, Sub-Saharan Africa | Permalink
Getting creditors to agree to hold off on their claims can be a little like herding cats, which may be why Mikolaj Budzanowski, Poland’s treasury minister, appears a little scratched in his attempt to save Polimex-Mostostal, a troubled construction company.
Polimex is one of a host of Polish builders laid low by underbidding on big infrastructure projects, but Budzanowski has taken a special interest in the company because its engineering expertise makes it crucial to government plans for a 6.3bn zlotys ($2bn) project to expand the Kozienice power plant and another 9.3bn zlotys power plant project in Opole – part of a drive to modernise Poland’s ageing power infrastructure.
Despite Monday’s unexpectedly good news from Taiwan, exports from east Asia have been weak for most of the year.
And yet jobs growth in the region’s more advanced export-oriented economies – Taiwan, South Korea, Singapore and Hong Kong – has actually stayed above its historic average, RBS analysts point out in a recent note. Why haven’t workers been hit harder by the slowdown?
* IMF cuts global growth forecasts
* IEA predicts boom for Iraq’s oil industry
* Asian shares rise, growth worries cap
* Ritz boosted by Chinese credit card move
The sun is rising over Ukraine’s once-grey metallurgical industry, literally and figuratively speaking.
Ukrainian billionaire Viktor Pinchuk has formally launched operation of the first new steel mill built in Ukraine in 40 years.
With a $700m price tag, the Dnipropetrovsk electric arc steel mill is largest greenfield investment in Ukraine since independence in 1991.
Perhaps retail investors in Shanghai missed the memo about the tough times for steel.
On Tuesday, they jumped at the chance to buy shares of China Molybdenum, the country’s biggest producer of the eponymous steel additive, as the company launched a secondary listing in Shanghai.
Japanese car sales in China last month have turned out just as bad as expected with the islands row constantly in the headlines.
The carmakers’ shares fell sharply as they revealed the extent of the hit – with Toyota Motor leading the way with a 49 per cent drop in sales compared to September 2011. Will October be any better? Investors clearly have their doubts.
Tuesday’s picks from the BB team: how Chavez won using state resources; the Brics are cracking; and how long can Iran survive? Plus: Radio Liberty, Russia’s voicebox; water management in India; and Nigeria’s piggy bank, the Sovereign Wealth Fund.