Daily Archives: Dec 4, 2012

The clash between the US Securities and Exchange Commission and China over accounting regulatory standards probably won’t come to a head for another ten months. But the prospect that the SEC’s high-profile attack on the Chinese affiliates of the Big Four and BDO could lead to a wholesale delisting of Chinese companies from the US stock market appeared enough to spook investors. Read more

A US appeals court has rejected a request from defaulted creditors led by Elliott Associates, a US fund, to require Argentina to post security of at least $250m by Monday to demonstrate its willingness to pay any judgment in their favour.

The ruling from the Second Circuit Court of Appeals means there will be no change to a schedule it laid down last week for the thorny case, which has pit the government against funds it decries as “vultures” and sparked fears of a new Argentine default.

 Read more

A few months ago, Alexandre Tombini, governor of Brazil’s central bank, told beyondbrics that Brazil was finally “going horizontal”. Enough of picking winners and piecemeal, ad hoc measures, he said: it was time for across-the-board reforms that would deliver a more efficient economy and a level playing field for all.

So much for that. Back in the present day, Guido Mantega, optimist and finance minister, on Tuesday announced cuts in payroll and other taxes and a special line in finance for the construction industry. After Friday’s shocking GDP figures, it looks like a knee-jerk effort to get the economy moving – or at least its most labour-intensive sector. Read more

Michael Buscher, chief executive of Oerlikon has reasons to be cheerful. The Swiss machine builder just sold its natural fibre and textile divisions to the Chinese Jinsheng Group for SFr650m ($700m).

It’s good deal, Buscher reckons, given that the divisions’ SFr1.1bn yearly revenues were seen as too cyclical. “As of now, we’re a better balanced and more profitable firm.” But Jinsheng has reasons to cheer as well. Read more

A reminder that strikes in South Africa keep ticking along: miner Coal of Africa has been hit by a walkout over the suspension of four workers, with work stopping at its Mooiplaats mine.

Unsurprisingly, the shares have been hit hard: down at one stage nearly 9 per cent in Johannesburg and 9.8 per cent in London. Prices have recovered a little, to around 7 per cent down on both exchanges. (The primary listing is in Australia.) Read more

A natural gas power plant of Turkish company Enerjisa | Source: companyIt is not every day that one of the world’s industrial giants sets up shop with one of the titans of a big, dynamic economy, so Eon‘s proposed joint venture with Sabanci Holding of Turkey has caused quite a stir.

Eon is taking a fifty per cent stake in Enerjisa, the energy group half-owned by Turkey’s Sabanci Holding, replacing Austria’s Verbund, which previously held the shares and which is exchanging its holdings for full ownership of eight Bavarian hydro-electric power stations. Read more

Brazil’s central bank issued a rule change on Tuesday covering “advance receipts for exports”, a form of export finance. The contracts were previously limited to 360 days; now they may be extended to 1,800 days (five years to you and me). It is significant because such contracts are not subject to the 6 per cent IOF (financial operations tax) charged on other forms of overseas borrowing.

In other words, Brazil is relaxing its capital controls. Read more

The Warsaw Stock Exchange is no exception to the global decline in trading volumes, which is causing problems for smaller companies facing difficulties attracting investor interest. The authorities are doing what they can – but it’s like trying to control the tides. Read more

By Yvonne Mhango of Renaissance Capital

Elections in Ghana tend to arouse less uncertainty than those in most of sub-Saharan Africa, due to its relatively stable political environment and mature democracy. This was affirmed by the smooth constitutional transfer of power following President John Atta Mills’s death in July, to his former vice-president, John Dramani Mahama.

However, a tight presidential election on December 7 – like that of 2008 – would increase the political risks. And there is a lot a stake from the ramping up of oil production to dealings with the IMF. Read more

First one warning about the vulnerabilities in Russian banking. And now another.

Last week Alfa Bank highlighted the potential problems associated with the recent rapid growth in consumer lending and the dependence of banks on central bank finance. This week Standard & Poor’s is pointing to precisely the same risks. Read more

James K GlassmanBy James K Glassman

As the global economy continues its sputtering recovery, policymakers have an opportunity to take a strong stand on principles that may help mitigate further long-term damage. In particular, as regards Argentina, a relatively small country with a potentially large impact on the international financial system.

For a decade, responsible nations have watched impassively as Argentina has refused to abide by court decisions and flouted global financial norms. Read more

India’s stock market is trading at near-record levels while the economy is slowing, export growth is plummeting and business people are grumbling about everything from high interest rates to transport bottlenecks.

Have portfolio investors spotted a recovery that’s just around the corner? Are they ahead of the curve? Or do they merely think they are? James Crabtree and Josh Noble report.

 Read more

Is the new leadership in Beijing going to crack down on the billions in illicit funds long believed to be bank-rolling Macau’s spectacular rise as the Las Vegas of the East?

That’s the question investors were asking as they sold down Macau gaming shares on Tuesday, following new reports that a handful of junket operators had been arrested for suspected money laundering. Read more

* Audit firms face SEC China crackdown

* Sberbank calls on Central Cank to boost liquidity

* BNY Mellon joins Argentina spat Read more

Benigno Aquino, president of the Philippines, shared his father’s words of warning earlier this week in a speech marking the 20th anniversary of the Manila exchange: “Unless you’re a big boy, don’t play in the stock market. You will only get burned.”

Clearly lots of investors in the country have chosen to ignore Aquino Sr’s advice: on Tuesday the Philippines equity index closed at a record high – its 7th in a row, and its 34th this year. But, after a romping run, some analysts are getting edgy. Read more

Tuesday’s picks from the BB team: Anglo American’s new chief faces competition and tension with workers; “something to be done” about Syria; and after 23 months of struggling to bring democracy to Egypt, is this the best we can do? Plus: Ukraine has more dollars in circulation than its own currency; action against China-based auditors; and Brazil’s need for structural reform. Read more

Norilsk Nickel gained 1.4 per cent in Moscow on Tuesday on a settlement in the long-running management dispute between billionaire shareholders Vladimir Potanin and Oleg Deripaska.

Roman Abramovich’s arrival as a peacemaker might have merited a warmer welcome given the bile surrounding Norilsk. But it was a bad day for the Russian market – and, in any case, the deal’s details suggest that trust remains in very short supply. One clause envisages penalties of over $560m at current share prices. The hatchet is, at best, half-buried. Read more

The December 2008 currency swap agreement between South Korea and China came amid extraordinary turmoil in global markets. Together with similar arrangements with Japan and the US, it helped to ease fears about South Korea’s foreign currency liquidity.

Even after Seoul and Beijing doubled the facility last year to nearly $60bn (Rmb360bn, Won64tn), it’s still never been used. But now Beijing and Seoul have found a use for the money. Read more

an investor looking at stock prices at a securities brokerage in ShanghaiChinese equities are in the doldrums. Both the Shenzhen composite and the Shanghai composite indices touched their lowest level in over three years this week, marking a loss for both indices of around 10 per cent since the start of the year.

But not all Chinese stocks are falling. Hong Kong’s Hang Seng China Enterprises Index, composed of mainland companies, is up by around 6 per cent. So stock selection matters. Chart of the week takes a look. Read more

Care Ratings, India’s second largest ratings agency by turnover, will IPO on Friday – and it seems the celebrations are starting early. Shares in two competitors have leapt ahead this week – ICRA is up more than 10 per cent and CRISIL by more than 6 per cent in a generally flat Mumbai market. Read more