Daily Archives: Dec 6, 2012

The scandal surrounding the collapse of Interbolsa, Colombia’s biggest brokerage firm, is getting wider and uglier by the minute.

The latest to wade in on the mess is Simón Gaviria, an up-and-coming Colombian lawmaker, who on Thursday accused financial regulators of knowingly turning a blind eye to Interbolsa’s questionable financial dealings. Read more

It was meant to be a big day: a chance for Hugo Chávez to celebrate Venezuela’s glorious accession to the South American trade bloc, Mercosur, while making a triumphant return to the regional stage from which he has been startlingly absent for the last year and a half thanks to his battle with cancer.

It’s hardly like Venezuela’s gregarious leader to turn down that kind of opportunity, so it’s no surprise that markets got so worked up on Thursday, which saw the biggest surge in Venezuelan bonds in two years, with yields falling to their lowest level in almost five years. Read more

Whenever the subject of partners for Argentina’s YPF to develop the Vaca Muerta shale deposits crops up, it isn’t long before someone suggests China as a potential investor.

So Carlos Bulgheroni’s admission that the Bridas group, in which his family and China’s CNOOC each own 50 per cent stakes, is planning to invest Vaca Muerta with YPF will have a lot of people sitting up. Read more

A year ago, who would have thought Myanmar would be in the spotlight on the private equity stage? It turns out that those PE funds with an eye on geopolitics, are also seeing potential in the Middle East and north Africa in the wake of the Arab Spring . Read more

Last week’s $3bn Rosneft eurobond caps a strong year for Russian corporates which have so far raised $14.8bn from the international debt markets – well up on $12.1bn for the whole of last year and approaching 2007′s record $18.1bn, according to Dealogic, the research company.

The success of Russia’s corporate giants in attracting investors at ever-lower yields opens the way for second- and third-tier companies to tap the markets next year – as long as international investors remain flush with cheap money. Read more

The recent news that Gold Fields was unbundling its troubled mines KDC and Beatrix into a separate entity, Sibanye, was cheered by investors, who sent the share price up over 7 per cent.

But since the announcement the gloss appears to have worn off. The share price has fallen to below what it was before the announcement, and rating agency Moody’s has downgraded the company a notch, to Ba1. Why? Read more

Citigroup São Paulo

Photo: Bloomberg

Citigroup’s announcement of sweeping cuts after less than two months under Michael Corbat, the bank’s new chief executive, may have surprised by its timing. Nevertheless, the fact that Citi is paring back or closing down its operations in several emerging markets has an air of inevitability about it.

But is Citi aping HSBC’s plan of focusing on only a few, profitable emerging markets? Or is it dressing up a hurried retreat as a carefully-honed strategy? Read more

Increasing demand for commodities in the past decade boosted shipping and encouraged shipbuilding. But just as giant bulk carriers take a while to stop, so does building them. Dinesh Sharma, senior consultant at Drewry Maritime Advisors, explains to Jonathan Wheatley, deputy emerging markets editor, what impact overcapacity is having on the industry.

Anton Ivanov, chairman of the Supreme Arbitration Court of Russia

Anton Ivanov, SAC chairman. Photo: Bloomberg

By Jeffrey Sullivan and Simon Maynard of Allen&Overy

The Russian Supreme Arbitration Court (SAC) – Russia’s Supreme Court – has crystallised long-held doubts about the enforceability under Russian law of what are known as “optional arbitration clauses.”

Its ruling means that parties which have until now been required to bring any claims under a contract to international arbitration may have to go instead to the Russian courts. Companies with such contracts would do well to read the fine print again – and consider renegotiating deals to get rid of optional clauses. Read more

Reading this week’s Transparency International report into corruption it’s easy to conclude that most of the problems are concentrated in emerging markets, far away from the business centres of the US, Europe or Japan.

Thursday’s news from Rolls-Royce shows this is a dangerous illusion. The British company announced that it was passing an internal review to the Serious Fraud Office following allegations of corruption at the engine maker’s Chinese and Indonesian intermediaries. As with so much else, globalisation has made corruption everybody’s concern. Read more

The bulls now driving the Indian stock market on Thursday seized on another piece of good economic news – and pushed stocks to a new two-year peak and the rupee to its highest for a month.

Investors welcomed the vote in the lower house of parliament to approve retail reform and reports that the ruling Congress party would secure a majority to get the measure through the upper house.

Never mind that parliamentary approval isn’t strictly necessary or that the actual decisions on retail liberalisation have been devolved to the states – or that it will take years for foreign retailers to roll out stores and make a difference to the economy. The important point is that there is once again a bit of hope about investing in India. Read more

* Barclays Africa seals £1.3bn Absa deal

* Army deployed after clashes in Cairo

* Freeport returns to oil with $20bn deals

* Nokia in smartphone deal with China Read more

Boryspil International airport in KievUkraine’s government has delayed talks with the International Monetary Fund on a billion-dollar loan programme that bankers say is crucial to shoring up confidence and stabilising state finances, triggering yet more confusion and concern among bondholders and other investors. Read more

Absa has agreed to buy Barclays Africa in an all-share deal worth R18,33bn (£1.3bn), writes Alistair Gray.

As a result, Barclays – which paid $4.5bn for a majority stake in Absa in 2005 – will increase its stake in one of South Africa’s big four banks from 55.5 per cent to 62.3 per cent. Read more

Chinese investors watch a stock price boardIf China’s days of growing at 10 per cent are over, what might be a plausible average growth rate for the near future?

Pessimists suggest 6 per cent because of the huge overhang of over-investment that is widespread across different sectors of the economy and the long list of difficult reforms ahead. Standard Chartered’s economist Stephen Green suggests the likely rate over the next five years is 7 per cent without big bang reforms in the interim. Read more

Thursday’s thought-provokers from the BB team: can Poland avoid recession again? Ghana’s close election; lessons for Greece from LatAm; and how China Inc does charm. Plus: 12 reasons why Russia is a great investment (really); Is Morsi Mubarak with a beard? And Mexico’s new narrative. Read more

a new Starbucks coffee shop built in traditional Chinese style in Chengdu, Sichuan ProvinceCoffee giant Starbucks is keen on China. At its investor conference this week, the company said China would be its second biggest market by 2014, behind the US and overtaking Canada, and it aimed to have 1,500 stores in 70 Chinese cities by 2015, from 700 today.

And you can see why. As China Daily reported last month, Starbucks keeps on putting up the price of coffee in the country. It’s now more expensive to buy a Starbucks latte in China than it is in the US. Read more

Kawasaki natural gas power station in Kawasaki city, Kanagawa prefecture, south of Tokyo on August 25, 2011. Using LNG gas, the power station started operating April 2008Japan’s thirst for liquefied natural gas is well known. Since the world’s third largest economy shut down almost all of its nuclear reactors following the Fukushima disaster last year, imports of the relatively clean-burning fuel have risen sharply, as utilities have scrambled for shipments anywhere they can find them. Even Belgium – a non-producing nation – showed up in Japan’s official list of LNG suppliers this year, after it re-routed tankers that had already passed customs.

Less well appreciated, however, is Africa’s vital role in meeting that demand. Read more

Robust domestic demand, the rise of the middle class and healthy corporate balance sheets are reasons why southeast Asia is being talked up as the last man standing in an otherwise anaemic global economy.

But Thiam Hee Ng, a senior economist at the Asian Development Bank, has sounded a rare note of caution on the region. He points out four factors that should give the boosters pause. Read more

Net foreign investment into Indian equities for the year is set for a bumper year, despite slowing GDP, stagnant labour markets and a government plagued by corruption.

It is already above $20bn – the second highest level in five years with almost a month still to go. Last year saw net outflows. Is this animal spirits gone mad or are investors onto something? Read more