Daily Archives: Nov 28, 2012

If you’ve ever had a brush with Brazilian law, you will understand why many people in the country prefer to keep their disputes out of the courts if they can help it. The country’s labyrinthine legal system and bureaucracy usually make lawsuits a painfully long and costly affair.

It is understandable then why many believe President Dilma Rousseff will choose to partially veto a controversial oil and gas royalties bill this week. 

It’s the end of an era. After more than a year of cutting Brazil’s benchmark interest rate, the central bank voted on Wednesday to keep it steady at its all-time low of 7.25 per cent. 

Like most other things to do with the cancer Hugo Chávez declared himself free of in July, it’s not at all clear how long he will remain in Cuba, where he arrived early Wednesday morning for “special” medical treatment.

But his opponents are hoping that he might be away for long enough to give them an edge in the regional elections for state governors on December 16, since a prolonged absence would prevent Chávez from campaigning for his candidates in some key battleground states. 

Argentina hopes the Second Circuit Court of Appeals could rule as early as this week on its emergency motion seeking the reimposition of an injunction that would stop Argentina from having to pay $1.3bn into an escrow account by December 15 pending appeal.

To recap briefly: the appeals court on October 26 upheld an earlier ruling by New York Judge Thomas Griesa on the interpretation of the pari passu (“equal footing”) clause contained in the bonds on which it defaulted in 2001, but asked him to clarify the payment mechanism and the impact on third parties. 

On the face of it, ONGC‘s decision to splash out $5bn on a minority share in the giant Kashagan oil field in Kazakhstan makes sense, given the Indian national oil company’s pressing need to build up strategic oil reserves. But analysts dissecting the company’s most expensive ever overseas acquisition say the deal is fraught with risk and smacks of desperation. 

Hungary’s plan to return to the international bond market without a long-awaited IMF deal in place was predictable, even coming on the back of a further downgrade by Standard & Poor’s last week. But the plan is seemingly contrary to the policy of Hungary’s debt management agency, fraught with risk and might very well not happen, market analysts told beyondbrics. 

A tense stock market debut for Megafon and its underwriters finished with the Russian telecoms company’s London-listed global depository receipts closing at $19.60, just below the $20-a-share IPO price. An embarrassment but not a disaster.

As the chart (below the jump) shows, the GDRs threatened to drop through the $19.50 level that the underwriting banks seemed to be defending – and on one occasion touched $19.45. Unless global market conditions stage an unexpected recovery, the stock looks likely to remain under pressure. 

Poland’s treasury ministry expects to present its programme on using state assets to boost infrastructure investments to the country’s cabinet in the next couple of weeks, which could see the first use of a special investment vehicle in the second quarter of next year. That’s according to Pawel Tamborski, a deputy treasury minister. 

Somebody has to get squeezed. In South Africa, the price of electricity is set to rise, as power generation costs go up. The question is by how much.

Eskom, the state-owned power company, says it needs put prices up by 16 per cent to avoid shortages. But the company chief executive, Brian Dames, has said they could climb even higher unless costs can be kept under control. And the spotlight is firmly on coal – and the mining companies that supply Eskom. 

More pressure is coming Turkey’s way over gas purchases from Iran.

After the Turkish government’s admission last week that Tehran was using revenue from gas sales to Ankara to buy gold and then shipping the metal back home, the gas-gold trade has attracted (almost certainly unwelcome) attention from the US Senate. 

With painful irony, oil-rich Nigeria is unable to supply its own population with electricity. The country ranked 178th of 185 economies on access to electricity for new businesses in the World Bank’s latest “Doing Business” publication.

Infrastructure is, not surprisingly, a key to the country’s future development, as an FT Special Report sets out. 

Source: Egyptian Exchange

Egypt’s political leaders are raising the temperature – and the stock market is wilting in the heat.

The EGX30 index fell 4.6 per cent on Wednesday, as the Constitutional Court threw down the gauntlet to president Mohamed Morsi saying it would not intimidated after he last week unilaterally exempted all his decisions from judicial view. 

* Megafon shares fall after $1.7bn IPO

* Asian stocks fall first time in six days on growth concern

* US says China not a currency manipulator 

China’s high levels of investment generate repeated comment – much of it negative.

Now an International Monetary Fund report, out this week, has estimated that Beijing may have been over-investing in recent years by around 10 per cent of GDP, with the costs falling squarely on the country’s households.

That’s a big number, with serious implications for the persistence of economic imbalances, both in China and around the world. 

Wednesday’s wisdom from the BB team: Ping An’s government connections; electricity shortages impede growth in Nigeria; and Qatar Holding, the “active investor”. Plus: leaky Megafon; Kim Jong-Un named The Onion’s sexiest man 2012; India’s Congress loses the mango man; and why Brazil will only be a regional economic superpower .