Daily Archives: Nov 27, 2012

The last company one might expect to be in acquisition mode is OGX Petróleo e Gas Participações. Readers will recall that OGX, the flagship company of Brazilian billionaire Eike Batista (pictured), disappointed investors in June when it drastically revised down its initial production forecasts.

Since then, things have not improved much. Yet OGX this week announced it is paying $270m to Brazilian oil monolith Petrobras for a 40 per cent stake in a block in the Santos Basin. Read more

Gramercy, the $3.2bn emerging markets hedge fund, has joined a growing chorus of critics who think the current emerging markets debt boom could soon turn to bust.

And it is putting its money where its mouth is – with the launch of a distressed debt fund that has already attracted $200m in commitments. Read more

Ever since his re-election on October 7th, Hugo Chávez has been uncharacteristically absent from the public eye. As if anyone had been in any doubt, we now know why.

Although he claimed to be cured from cancer in July, a letter from Chávez was read out in congress on Tuesday in which he said that he had been following a “complementary treatment plan” ordered by his doctors and is now on his way to Cuba for further “special” treatment. Read more

Whoops, looks like some Indian brokerages got a bit ahead of themselves in trying to attract US investors.

On Tuesday, the US Securities and Exchange Commission charged four financial services firms in India for providing brokerage services to US institutional investors without being registered. Read more

Courtesy of Ukraine's Cabinet of Ministers

Ukraine’s government on Monday rolled out the red carpet for a highly-publicised signing ceremony for a landmark energy deal.

But the event, attended by Prime Minister Mykola Azarov and Energy Minister Yuriy Boyko, quickly spiralled into a fiasco, with denials and confusion over what has actually been signed – and by whom. Read more

Shares in Rongsheng Heavy Industries plunged 6.7 per cent on Tuesday as investors took stock of the shock resignation on Monday night of the Chinese shipbuilding giant’s chairman and founder Zhang Zhirong.

His departure comes at a difficult time for the group, with a separate Zhang-owned company named in an insider dealing probe in the US, ship sales plummeting, profits shrinking and the share price down 80 per cent since its 2010 listing. Read more

The OECD Economic Outlook, published on Tuesday, has rung a few alarm bells for developed economies, as the FT reports.

But what about emerging economies? What’s the impact on them from the eurozone “negative feedback loop”, as the organisation puts it? Read more

Argentina’s holdout saga is turning, in many market participants’ eyes, into a question of when, not whether, the country sinks into a technical default.

So if emergency appeals by Argentina and the holders of restructured debt fall on deaf ears in the Second Circuit Court of Appeals and New York Judge Thomas Griesa’s November 21 ruling stands, (in which he ordered Argentina to pay its “holdouts” $1.3bn by December 15, the day it must make payment to restructured debt holders), the question is, what happens next? Read more

Russian Technologies, the state industrial combine headed by Sergei Chemezov, a close ally of president Vladimir Putin, is selling control of one of its many strategic assets – the world’s biggest titanium company.

It would be nice to bill this as a harbinger of wholesale privatisation at Russian Technologies, a behemoth specialising in military hardware. But the truth is more prosaic – the sale of VSMPO-Avisma looks like a pragmatic debt-restructuring deal. Read more

Megafon, the Russian mobile operator, seems set to get its IPO away, with the help of this month’s modest recovery in financial market sentiment.

Speaking on the last day of the sale, people close to the offer say they have received enough orders to fill the offering. But it’s at the lower end of the $20-$25 price range, suggesting that investors have been fairly cautious about putting in their orders. Trading in Moscow and London is due to start on Wednesday. Read more

Hungary’s central bank on Tuesday cut interest rates by 25 basis points to 6 per cent in its fourth reduction in succession, in line with market expectations.

The base rate is now a full percentage point lower than in August, when the central bank began easing to boost a recession-hit economy. The forint strengthened against the euro by 0.7 per cent to trade at Huf280. Read more

Sierra Leone’s president Ernest Bai Koroma (left) may have avoided a run-off in this month’s presidential election, but he still a faces a dilemma – how to attract and retain investors while swelling government coffers to put citizens on the road to prosperity.

Koroma won a second term in elections held in mid-November. He received 58.7 per cent of the vote, narrowly surpassing the 55 per cent threshold needed to avoid a run-off with his main opponent, Julius Maada Bio, who received 37.4 per cent of votes. Read more

Cooperative bank, LjulbljanaBy Luka Oresković and Sašo Stanovnik

On Sunday, Slovenians vote for a new head of state in the second round of presidential elections. Although the incumbent, Danilo Türk, seemed a certain winner before the first round in November, Borut Pahor, the former centre-left prime minister, surprised pundits and pollsters by winning 40 per cent of the vote – leaving the two to fight it out again alone.

While the president’s role is largely ceremonial, the people’s choice this time could be critical for Slovenia’s long-term development. Read more

Egypt’s stock market seems to have stabilised since its dramatic 9.6 per cent fall on Sunday, triggered by the latest round of political turmoil. On Monday, the EGX30 index rose 2.6 per cent and was trading flat in the early afternoon, Cairo time, on Tuesday.

But the political confrontations of the last few days are a reminder that Egypt’s leaders are a long way from giving priority to the economy. The International Monetary Fund programme announced last week is anything but a done deal. Read more

* Argentina seeks halt to $1.3bn debt order

* S Korea tightens derivatives limits

* Egyptian investor seeks to put stamp on Telecom Italia Read more

Federico SturzeneggerBy Federico Sturzenegger of Banco Ciudad de Buenos Aires

Last week Judge Griesa ruled that Argentina should pay to a holdout fund by the name of NML before December 15 the full amount of debt owed by the country. The ruling followed a previous one, based on the pari passu clause, which said that Argentina should pay at least something to the holdouts. Read more

Tuesday’s thoughts from the BB team: South Africa needs a sustainable, inclusive economy; the burdensome legacy of Essar’s growth phase; and making Islamic finance universal and accessible. Plus: US-Mexico relations, immigration and anti-drug policy; freedom for new parties is a Kremlin decoy; and the directorship of India’s Central Bureau of Investigation. Read more

Gatwick – Korean co-owners

South Korean companies are on a shopping spree in Europe, taking advantage of the region’s protracted debt crisis.

Their acquisition of European businesses has tripled to $1.3bn in the first 10 months of this year from $430m in the same period a year earlier, according to mergermarket, an FT group company. Read more

That’s the mining effect.

South Africa’s GDP (seasonally adjusted) for the third quarter of 2012 increased by 1.2 per cent, compared with the 3.4 per cent (revised from 3.2 per cent) Q2 figure. Read more


With Taiwan’s economy sluggish this year and the stock market underperforming many regional peers, it’s easy to find Taiwan bears – including the Economist, which raised hackles locally by calling the president a “bumbler” (the unfortunate Chinese translation was “dumb egg”).

It’s not so easy to find Taiwan bulls, so a recent upbeat report from Barclays analysts is unusual. Read more