Colombia’s government and the Revolutionary Armed Forces of Colombia, or FARC, resumed peace talks in Havana on Wednesday, hoping to end one of the world’s longest running conflicts that absorbs 2 per cent of the country’s GDP, according to some estimates.
But rating agencies seem confident about the Andean country, whatever the outcome. Read more
The “Genghis bonds” issued by Mongolia last week might already be losing its sparkle as political turmoil rocks the country. But the specter of political risk hasn’t deterred investors from piling in on Morocco’s maiden dollar-denominated bond.
The North African country, which is under pressure to plug budget gap and contain the kind of protests that have brought down regimes in other parts of the Middle East, raised $1.5bn in a dual-tranche offering on Wednesday. Read more
Just when New York Judge Thomas Griesa must have been relaxing at having got Argentina’s holdout saga out of his court, another suit involving the country goes and plops into his in-tray.
This case this time? Repsol v. Chevron. The Spanish oil company followed up on its threat to sue any companies that sought to join forces with its expropriated former unit, YPF, to develop shale assets, and filed a complaint against the US major. Read more
Buying a small and loss-making airline may not appear to be a fairly risky move in the middle of a global slump, but troubled Czech Airlines (CSA) looks like it has gained two serious suitors – Korean Air and Qatar Airlines – apparently seduced by the possibility of creating a hub in the most beautiful city in central Europe.
Sovereign debt restructuring is like baking a cake, some experts quip. With the appropriate ingredients – creditor pain stirred in, a sprinkle of fiscal adjustments – the process can be relatively smooth and the outcome fairly equitable.
So far, it seems Belize is not following the right recipe. Read more
Transparency International’s corruption perceptions index provides an annual league table on who’s up and who’s down in global corruption.
As usual, the Scandinavians top the clean list and the basket cases are at the bottom. The real interest lies in which countries have made the greatest gains or losses. This year, the fastest climber is East Timor, up 30 places to 113 out of 176 countries, and the African island of Sao Tome, up 28 at 72. Just behind are two significant emerging economies – Mongolia, up 26 at 94, and the Philippines, up 24 at 105. Read more
Time to hedge?
Good news for Zambian famers, as well as other grain traders: the Johannesburg Stock Exchange will offer derivative contracts on Zambian grain from next year, giving farmers and others a chance to hedge their grain price risk.
The contracts will be settled in US dollars – which may provide an added appeal to other groups given the recent depreciation in the kwacha. Read more
Political unrest has caused divergent company performance in the region, writes Camilla Hall. Bahraini company earnings dropped the most in the Gulf in the third quarter while companies in the United Arab Emirates outperformed their regional peers. Read more
Most Romanians will be pleased to see the back of 2012, a year that began with a bitter winter of street protests against austerity and government heavy-handedness, then saw the toppling of two prime ministers, the failed impeachment of an unpopular president, and a constitutional crisis that brought international opprobrium.
But the year may have one more drama in store: on Sunday, Romanians vote in a general election. The governing coalition seems certain to win but Romania’s constitutional set-up means a rather different administration could take shape. Whatever government emerges will be under pressure to negotiate a new deal with the International Monetary Fund and restart reforms to trim the public sector. Read more
Turkey is borrowing at the cheapest rates in its history, as demand for the country’s debt continues to push yields down for both foreign and domestically denominated issues.
On Wednesday, the country’s treasury said it had issued $1bn in long-term dollar-denominated debt at its lowest ever cost: just 4.352 per cent yield for a 29-year bond. It came as benchmark two-year domestically denominated debt also broke new records, reaching yields of 5.7 per cent – more than 500 basis points down for the year so far. Read more
Poland’s central bank continued its efforts to revive a faltering economy on Wednesday by cutting interest rates by a quarter point – the benchmark is now 4.25 per cent.
It marks the second rate cut in as many months as earlier worries about persistently high inflation have given way to concern over the state of the economy. Third quarter numbers released last week showed GDP grew at an annual rate of only 1.4 per cent, far below consensus predictions of 1.8 per cent. Read more
Li Keqiang, China’s next premier, says the country must unleash urbanisation as its next big growth engine. That makes sense –China’s urbanisation rate is still just 50 per cent, well below the 80 per cent norm in developed economies.
But the government’s top-down push can play out in funny ways. If Li needs any reminder, he can look to his old stomping ground, the northeastern province of Liaoning. It is pioneering a new mode of development: start with the showcase monument, then build the city. Read more
President Rosen Plevneliev sees Bulgaria as an island of stability within a troubled continent. The country has a low budget deficit and limited government debt in comparison with fellow EU members. Despite prolonged stagnation, it has required no bailout, unlike nearby Serbia, Romania and Greece.
But a new FT Special Report finds that beneath this stability lie problems around the state of democracy, organised crime and structural economic reform. Read more
Poland’s central bank on Wednesday cut interest rates by 25 basis points for the second consecutive month to 4.25 per cent, Reuters reports. The move was in line with expectations. Read more
With all the new purportedly top-quality hotels popping up in China, what’s the guarantee of service and taste? Very little, according to Clement Kwok, the chief executive of Hong Kong & Shanghai Hotels, which is placing an emphasis on quality over quantity.
Kwok criticised the star-rating system, as well as the rapid hotel expansion in China and other emerging markets by competitors during a media lunch at the company’s flagship Peninsula Hotel in Hong Kong. Read more
* HSBC sells Ping An stake to Thai group
* Hong Kong intervenes to weaken currency
* Samsung heir promoted to vice-chairman
* Dubai’s ‘old guard’ join the bounce back Read more
HSBC‘s $9.4bn deal to sell its 15.6 per cent stake in Ping An to Thailand’s Charoen Pokphand Group is clearly good news for the British bank. It should also be good news for the Chinese insurer, assuming that Charoen Pokphand follows HSBC’s example in the role of long-term stable foreign shareholder.
Investors in Ping An are betting that it will, with the shares jumping 5.6 per cent in Hong Kong on the news and later closing up 4.1 per cent. HSBC, which made its intentions clear weeks ago, saw its shares rise 1 per cent. Read more
Wednesday’s picks from the BB team: Myanmar’s rapid shift to democracy; Bulgaria as an island of stability in Europe; and Muddy Waters throws everything but the kitchen sink at Olam. Plus: predictions for the Chinese economy; the International Olympic Committee suspends India; and the Georgian government’s arrests of oppositionists have critics crying foul. Read more
Despite a big round of minimum wage hikes, Indonesia’s manufacturing belt hasn’t seen the end of the recent wave of labour disputes.
Wednesday witnessed the latest in a series of mass protests organized in recent weeks in Jakarta by workers’ unions complaining about “outsourcing”— local lingo for taking on temporary workers without the additional cost of providing healthcare and pension benefits. Read more
Is South Korea becoming a graveyard for foreign financial firms? Such concerns are growing as an increasing number of foreign financial companies are leaving the country after years of losses, struggling to compete with local rivals. Read more