Daily Archives: Oct 23, 2012

Argentina believes in state command for the economy – a sentiment financial markets could hardly be expected to share.

And so it was no surprise that markets tumbled – the stock market’s Merval index racked up the steepest intraday fall in nearly a year after Cristina Fernández, the president, announced that insurance companies would be forced to pour 7bn pesos ($1.5bn) into “productive” projects and the government would step up regulation of capital markets. Read more

From the FT’s Lombard column

Experian has struck a creditable deal to buy out minorities in Brazilian subsidiary Serasa, as it bulks up its emerging markets presence. The credit checking agency is paying $1.5bn for the 30 per cent stake, at the top end of City expectations. But at least the deal has a price and timing that suits Experian. The banks who are selling out possess a put option that could have triggered a transaction with neither characteristic. Read more

Croatia’s expected entry to the European Union in July 2013 will be a big step for the country, which emerged from a bloody war of independence two decades ago. But membership of the EU comes at a cost – including, it seems, rising energy prices. Read more

This might come as news to the hundreds of thousands of Poles and Hungarians struggling to repay mortgages denominated in Swiss francs and euros, but there are signs that central Europe’s currencies may have appreciated too much in recent months, endangering the region’s competitiveness.

Citi’s researchers take a look at the appreciation trend and find that the competitive advantage that local currencies have given the region’s exporters is fast eroding. Read more

Indian woman talks on a mobile

She has a number

Is India running out of telephone numbers?

According to the Times of India, yes. According to most analysts, not so much. Read more

For Chinese resources companies, Canada has long seemed like the promised land. Brimming with oil, timber and minerals, it also appeared more open to Chinese investment and less prone to resource nationalism than its neighbour, the US.

Or so it seemed until last weekend, when Ottawa rejected a $5bn bid from Petronas, the Malaysian state-owned oil company, to acquire Canadian company Progress Energy, sending a shockwave through the Chinese dealmaking community. A $15bn bid by Cnooc for oil group Nexen has been approved by the shareholders of both companies but awaits the OK from Canadian regulators. If Ottawa could turn Petronas away, it could shun Cnooc, too. Read more

More evidence of Asian shoppers cooling to the charms of luxury. Shares in handbag maker Mulberry plunged by a quarter on Tuesday after it issued a profits warning, blaming slowing international sales, a planned rationalisation of wholesale distribution and “a more challenging enviroment in Asia”.

The British group predicts pre-tax profits will fall in the year to March 2013, to below the £36m posted last year. That compares with earlier analysts’ forecasts of nearly £42m. Ouch. Read more

* Rosneft to pay $55bn in TNK-BP takeover

* Archer-Daniels-Midland to sell 23% stake in Gruma to Chico Pardo

* Megafon postpones its London offering Read more

With less than a week until maturity, Dana Gas sukuks are trading at a significant discount to face value as negotiations continue on what would be the UAE’s first ever restructuring of an Islamic bond.

On Tuesday, the sukuk was trading at a 21 per cent discount, undermined by worries about the company’s cash position. In its first-half financial statements, the Sharjah-based energy company reported a cash balance of $164m, a fraction of the funds required to repay the debt. Read more

Tuesday’s picks from the BB team: Georgia’s first parliamentary session since elections; Walmart in India; and more details of BP’s Russian deal. Plus: Russia’s third industrial revolution; the dangers of Turkey’s policy on Syria; and Nigeria’s real estate market takes off. Read more

Oil-rich Abu Dhabi has quietly issued a new public debt policy to its state-linked companies as it tries to rein in boom-time borrowing and get an idea of what debt it is responsible for.

The most important articles of the policy are here, from documents seen and translated into English by beyondbrics. Read more

Stuart Kirk and Oliver Ralph of Lex ask how investors should respond to the decision of UK oil multinational BP to sell its stake in joint venture TNK-BP to Russia’s national energy champion.

China’s Canton Fair – the famous twice-a- year trade show – has for decades brought together buyers from all over the world to the southern city of Guangzhou to meet suppliers of everything from microchips to Christmas decorations.

Many see it as a litmus test for the country’s export industries, including the People’s Daily, the state mouthpiece, which declared, “Canton Fair Foretells Grim Outlook.” But has the fair’s economic relevance waned? Read more

* Rosneft to pay $55bn in TNK-BP takeover

* Archer-Daniels-Midland to sell 23% stake in Gruma to Chico Pardo

* Megafon postpones its London offering Read more

Readers of beyondbrics know that emerging markets bonds are hot properties at the moment. Investors are flocking to them for their attractive yields and EM companies and governments, emboldened by the demand, have been happy to oblige, issuing a record $360bn in hard-currency bonds so far this year.

But every bond issued adds to the money that must be repaid somewhere down the line. For David Spegel, head of emerging markets strategy at ING, 2014 could be a crunch year for EM bond refinancing – particularly of speculative-grade bonds. Read more

Is Caterpillar being overly optimistic about its China operations?

Even as one US company after another – ranging from Alcoa to FedEx and McDonald’s – sounded the alarm over the impact of China’s slowing growth on demand for their products, Caterpillar appeared relatively sanguine. Read more