Daily Archives: Nov 7, 2012

It’s the million-dollar question in Brazil right now. Is the recent reduction in interest rates sustainable?

If it is, then the past 14 months or so could go down in history as the turning point not only for the country’s capital markets but for anyone doing business in Brazil. Read more

A significant step in Cuba’s long march to market-orientated economic reform is about to begin next week, when a unit of Brazil’s Odebrecht reopens a shuttered sugar mill in the southern province of Cienfuegos.

Sugarcane was an icon of the island’s economy both before and after the 1959 revolution, but since the fall of the Soviet Union, Cuba has dropped out of the Premier League of the world’s sugar exporters. Read more

While most Americans were queuing to cast their votes in the US presidential election, lawyers working for Elliott Associates were filing a request for a New York court judge to expedite its ruling against Argentina, the hedge fund’s nemesis.

Investors who still hold Argentina’s defaulted debt include thousands of Italian retail investors, but Elliott and Aurelius Capital – another hedge fund set up by a former Elliott executive – have been the most aggressive in chasing Buenos Aires through the courts. Read more

It’s all over for Interbolsa. Less than a week after financial regulators took over the troubled Colombian broker, the government has ordered the company to be liquidated.

Mauricio Cardenas, Colombia’s finance minister said on Wednesday that Interbolsa would be wound down and its assets sold to pay investors and other financial obligations. Read more

YPF’s shares have lost so much ground this year – a plunge of 74 per cent in New York and 61 per cent in Buenos Aires since a high in January. So are today’s third-quarter results the time to buy? Read more

In most countries paying taxes is nothing special. For those that fail to dish up the dues – and get caught – punishments await. But elsewhere, compliance is so low that carrots are used as well as sticks. Wednesday was Taxpayers’ Day in Tanzania. Read more

The Czechs have become regional specialists in drawn-out and inconclusive political crises, the latest iteration of which saw premier Petr Necas (left) on Wednesday push through a controversial tax increase that was also a vote of confidence in his coalition government. Read more

Kiev: Communist rally

By Andrew Wilson of ECFR

The Ukrainian parliamentary elections are still not over – the Central Election Commission has sanctioned a rerun in five contested constituencies, and the number could well go up. But Ukraine’s friends, partners and neighbours already have to decide how to react. Read more

Wednesday’s opening panel at the World Economic Forum’s annual India meeting was entitled “Rebooting India” – a rather ominous slogan as many of the participants noted.

And while India’s law minister, two local business chiefs, and the CEO of Nestle all took their turn in analysing the country’s economic woes, it was Harvard economics professor Gita Gopinath who found the most convincing argument. Read more

Escalating disputes between labour unions and employers in north Africa are threatening to derail economic recovery after the uprisings that ousted long-ruling dictators in the region, writes Farah Halime.

Emboldened by the spirit of political change, thousands of workers in Egypt and Tunisia have staged a series of protests and are now in deadlocked talks with companies over demands for a minimum wage. Read more

When it cuts it really cuts. Kenya’s central bank has reduced its benchmark interest rate by 200 basis points to 11 per cent, after inflation fell below the bank’s target in October and exchange rates remained stable. Read more

Poland’s slowing economy prompted the central bank’s interest rate-stetting Monetary Policy Council on Wednesday to cut its benchmark rate by a quarter point to 4.5 per cent – the first step in what most analysts expect is the start of a longer term loosening of monetary policy.

The Polish MPC was the only central bank in the EU to increase rates earlier this year, when prospects for the Polish economy seemed a lot brighter and the big problem was persistently high inflation. Read more

There’s bad economic news on Wednesday from Ukraine, where political tensions are high with opposition politicians accusing President Viktor Yanukovich’s ruling Party of Regions of falsifying last Sunday’s parliamentary election.

Ukraine’s central bank reserves plunged 8.4 per cent in October to $26.8bn, as households rushed to dump a depreciating hryvnia amid concerns about the gloomy economic and political outlook. The drop since the beginning of the year is now a worrying 15.7 per cent. Read more

Poland’s central bank has cut its key interest rate by 25 basis points to 4.50 per cent, the first reduction in three years. A sharp reversal for policy makers who raised rates as recently as May.

Vedanta‘s transformation from a complex jigsaw of inter-locking assets into a streamlined investor-friendly group is almost complete – subject only to approval from the notoriously-slow Indian courts.

In the meantime the Indian natural resources group is keeping shareholders content with a 49 per cent increase to $2.6bn in first-half earnings before interest, tax, depreciation and amortisation (ebitda). While metals prices were weak, oil prices were strong and Vedanta profited handsomely from last year’s acquisition of control of Cairn India. Read more

* Sinopec said to buy Nigeria oil blocks from French Total

* Disclosure law passed on Mexican finances

* Chinese system undergoes stealthy reform

* Russian October inflation rate unexpectedly falls to 6.5% Read more

By JP Landman

The current narrative on South Africa is one of decline. The mining strikes of the last two and a half months, and the accompanying violence, set off many doomsday predictions. But if we extend our view beyond the headlines of the moment, however, we find a bigger – and different – picture. Read more

Wednesday’s picks from the BB team: Thai and Indonesian billionaires tussle over Fraser & Neave; perpetual motion in Pakistan’s grassroots; and nature gains popularity in China. Plus: Chávez brings in the Brazilians; Afghanistan’s flawed electoral process; and the former president of Botswana on funding democracies. Read more

In the next few years, emerging markets are likely to overtake advanced economies as a tourist destination, at least in terms of visitor numbers. Last year, they suffered a temporary setback when the rich world outstripped emerging economies in growth in arrivals. But in 2012, EMs are once again growing faster – and are forecast to maintain their pace. Read more

Indonesia might not be the obvious place for a multinational cosmetics group to put its biggest factory. But L’Oréal of France on Wednesday opened its largest plant in the world at the Jababeka industrial estate near Jakarta.

The €100m production site will serve south-east Asia, one of the globe’s fastest-growing regions, making skin and haircare products under the L’Oréal Paris and Garnier brands. With 450 jobs, it will be a welcome boost to Indonesia’s efforts to diversify away from commodities exports. Read more