Daily Archives: Jan 11, 2013

Even Abilio Diniz, Brazil’s 76-year-old retail tycoon and fitness fanatic, knows when to call it a day.

After years of fighting for the company his father founded, on Friday he sold a third of his preferential shares in Pão de Açúcar worth R$1.5bn ($736) – well, that is according to one person close to the transaction and local media reportsRead more

Iconic photographs of Emiliano Zapata’s rough-hewn peasant army at the beginning of last century showed the blue-tiled colonial mansion of the Sanborns restaurant and retail store that is one of the best known buildings in the heart of Mexico City.

The rebels were entering what then was the inner sanctum of a minuscule middle class. Nowadays, though no longer a sanctum, Sanborns remains a symbol of middle-class lifestyle that Carlos Slim, the world’s wealthiest tycoon, has expanded into a chain of more than 400 establishments, many of them beacons of well-being in areas that once were on the very wrong side of the tracks.

This week, Slim has decided to return the chain back to the stock market from which he withdrew it six years ago. Read more

How would Colombia’s economy feel if its commodities sector suddenly crumbled? Not very well, some economists guess.

Why? Well just take a look at the foreign direct investment figures. According to the latest data from the Banco de la República, the nation’s central bank, Colombia is on track for a record-breaking year, with FDI hitting $11.8bn from January to September last year. This represents an increase of over 10 per cent from the same period last year.

However, so far, about 55 per cent of those inflows have gone into the country’s booming energy and mining sectors. Read more

It’s been a(nother) tough week for CSA, ThyssenKrupp’s vast Brazilian steel mill.

Rio de Janeiro’s city council ordered the company on Monday to halt operations at the iron and steel plant just outside the city. Apparently, they did not have all the correct licences. If CSA did not comply with the order, the council said, they would have to pay a fine of R$570.65 ($280.28) per day.

That’s not great news for any company, especially CSA. Read more

Brazil’s former president Luiz Inácio Lula da Silva is facing plenty of pressure these days over allegations he was directly involved in the country’s biggest corruption case, the Mensalão.

Now comes an expose of what are supposedly his properties. Read more

Bad news follows bad news for South Africa, with the Rand dropping sharply on Friday in the wake of a downgrade from the ratings agency Fitch.

The currency fell over 0.7 per cent to reach 8.75 to the dollar as of 15.30 London time on Friday, a fifth day of decline in a row and hitting its lowest point since December 4. This week it has been the worst performer of the 25 EM currencies tracked by Bloomberg. Read more

There has been a lot of gloomy news coming out of Poland over the last few months, but taking a look at markets for bonds and investment properties, the country is still something of a magnet for investors.

Earlier this week, Poland sold a €1bn six-year eurobond issue that was oversubscribed at €1.9bn and yielded 1.705 per cent, the lowest ever. Read more

As shareholders toast the appointment of Mark Cutifani as the new Anglo American chief executive, strong resentment is brewing at the bottom ranks of the mining sector with the leading National Union of Mineworkers (NUM) saying the company should have appointed a black man, or even a local white woman, instead of a white man.

54-year-old Cutifani is understood to be the second non-South African to run Anglo. He will receive a basic salary of £1.2m as well as £2.4m of compensation for loss of incentives on leaving his current post at AngloGold. Read more

Will 2013 be the year in which EM multinationals become the real role models of the global marketplace? The authors of Emerging Markets Rule certainly think so. They say leading EM companies will inspire their peers around the world with alternative ways of doing business.

 Read more

The tenth in our series of guest posts on the outlook for the year ahead is by Douglas Beal of Boston Consulting Group

What is the best way to measure a nation’s economic progress? For many decades, most of us have tended to focus on one benchmark: gross domestic product (GDP), which measures national income. There’s no question that income growth is central to economic development. But it has become just as clear that GDP per capita alone is not a sufficient measure of progress. Read more

When it comes to oil and gas exploration, you win some and you lose some. All the more so when you’re blazing a trail in under-explored destinations like Uganda, Kenya and Ghana.

Shares for the oil explorer Tullow dropped sharply by over 5 per cent per cent as of 1pm in London on Friday to reach 1,159p, as the company released a statement containing details of nearly $300m of expected writedowns from explorations in Guyana, Ghana and Suriname – more than double its $120m of writedowns for 2011. Read more

China’s “little Emperors” have got a lot of bad press in the 30-odd years since Mao Zedong created a generation of pampered and pilloried only children with the “one child policy”. It did not help that KFC, the Western fast food behemoth, opened its first restaurant in China soon afterwards, helping plump up the little darlings to the point where obesity is a problem for children whose parents and grandparents lived through famine.

But now an Australian study has even less nice to say about the generation that dominates China’s labour force. It says the one-child policy has created a generation of risk avoiders. Hardly good news for Beijing’s plan to create an innovation nation by producing millions of Chinese replicas of Steve Jobs. Read more

The New Year rally in global markets has been matched by a strong surge of money into funds, including emerging market equity and bond funds.

EM equity fund inflows in the week to Wednesday more than doubled to $7.4bn, according to data from EPFR, the funds research company, cited by banks. EM bond inflows hit $2bn, more than 50 per cent up on the previous week. Investors are clearly enjoying risk-off – while it lasts. Read more

We can't vote like this

President Viktor Yanukovich’s majority in parliament on Friday voted in a loyalist to head the country’s central bank in what is expected to be a fiscally challenging year, but not without showing signs of weakness and sparking controversy. Read more

* China’s vehicle sales grow 4.3%

* Polish post office set for a revival

* US in trade dispute with Indonesia Read more

Factoid: more oil wells are being drilled by Turkey than by Norway. That’s the perhaps startling news in a Bloomberg story under the headline Turkey Beating Norway as Biggest Regional Oil Driller.

Hang on a bit. Norway, according to the US Energy Information Administration, is the world’s 14th biggest oil producer, with output of 2m barrels a day. The EIA puts Turkey in 60th place, with output of 56,533 barrels a day in 2011. Norway exports more than 80 per cent of the oil it produces. Turkey imports more than 90 per cent of the oil it consumes. Read more

Impala Platinum on Friday finally announced the long-awaited terms of its deal to sell a majority stake in its Zimbabwe operation to local black investors in response to president Robert Mugabe’s black ownership campaign.

In line with an outline accord agreed in March, Impala said in a statement that its 87-per-cent-owned Australian-listed Zimplats subsidiary will sell a 51 per cent stake in its mining business to local black investors for $971m, with Zimplats keeping the remaining 49 per cent. Zimplats will finance the deal, lending its new shareholders the money to buy the stock. Read more

Friday’s picks from the beyondbrics team: Ghana, Mozambique and Tanzania hope to avoid the ‘resource curse’ with their new oil and gas wealth; after a difficult 2012, prospects for the Indian economy look better for 2013; plus, what happens when China goes “gray”? Read more

Forecast-beating results from Infosys on Friday prompted the biggest daily gain in the IT company’s shares in a decade and raised hopes of a recovery in confidence in Indian business. Read more

India auto factoryThe surprise decline in India’s industrial output in November, disclosed in figures published on Friday, was largely due to the Diwali holiday, when many businesses close for days.

Industrial production fell 0.1 per cent in November year-on-year basis, in stark contrast to revised growth of 8.3 per cent in October – when the figure was boosted by the fact that in 2011, Diwali fell in October.

But forget holidays. The real story is that IP has grown in just three of the last eight months. The pressure to cut interest rates is getting strongerRead more