[snap]: Brazil holds rates steady
No surprises there then. Brazil’s central bank voted on Wednesday to keep the country’s benchmark interest rate steady at its all-time low of 7.25 per cent.
However, the accompanying statement from the central bank was a little more direct than normal. Continue reading »
Venezuela: minting new (Chinese) billionaires
Venezuelan state oil company PDVSA’s ubiquitous propaganda constantly trumpets the fact that it now belongs to “everyone”, since control of the oil giant was wrested from opponents of Hugo Chávez ten years ago.
But to paraphrase George Orwell, one could say that its wealth belongs to some people more than others – take the example of Sun Weijie, the Chinese businessman who has just become a billionaire on the back of a juicy supply contract with PDVSA. Continue reading »
S Africa: more data gloom
South Africa just can’t quite shake off the bad times. After a torrid 2012 of strikes and unrest, there has been a clutch of economic data that show mild improvement which then revert back down.
On Wednesday, it was the turn of the PMI – an index of manufacturing sentiment. Having had a better showing in November, reaching 49.5 (seasonally adjusted) – just shy of the 50 mark that separates expansion from contraction – the December figure has come in at 47.4, back towards the bad days of October. Retail sales and mining production tell a similar story. Continue reading »
Mali conflict: watch the spillover
The conflict in Mali has intensified following the onset of a major French military intervention and promises by Islamists to retaliate against western targets across the region. What might be the economic spillover effects of the conflict?
Mali may not play an integral role in the world economy, but many of its neighboring countries do as suppliers of key petrochemicals and minerals – so the potential for disruption from the conflict is more significant than it might at first seem. Continue reading »
Russia’s Tariko takes charge at humbled Polish vodka group
Russia has a habit of chewing up invaders – a feat repeated with distiller Central European Distribution Company, whose attempt to become Russia’s dominant vodka producer brought the company to the brink of collapse and put it in the hands of its Russian rescuer.
After a public battle late last year for control of CEDC between Roustam Tariko, a Russian billionaire and founder of Russian Standard and the CEDC board, it now appears that the Russians have taken effective control of CEDC. Continue reading »
Brazilian corruption: far from over
Brazil is still basking in the successful conclusion of its so-called “trial of the century”, the mensalão case, in which senior former members of the government of ex-president Luiz Inácio Lula da Silva were convicted of implementing a vote-buying scheme in Congress in the early years of his leadership. The case was hailed as the beginning of the end of Brazil’s culture of impunity, in which politicians and the rich rarely are held accountable for their actions.
The beginning of the end, perhaps – but still very far from the end, unfortunately. Continue reading »
Currency wars: Russia speaks out
Russia has piled into the latest outbreak of the currency wars, with a top central banker warning of serious consequences of what he said were Japan’s moves to weaken the yen in a bid to boost its stagnant economy.
According to Reuters, Alexei Ulyukayev, the central bank’s first deputy chairman, said on Wednesday: “We’re on a threshold of very serious, confrontational actions in the sphere that is known… as currency wars.”
With Russia holding the G20 presidency this year, these words will resonate, especially as they came only hours after an intervention from South Korea. Continue reading »
CEE mutual funds: down for now, but the future’s bright
Household investments in mutual funds can tell you a lot about a country. They should be a proxy for economic development, as more cash to spare means more to invest. But they can also reflect things like the state of the welfare system and cultural attitudes towards investment. Generali PPF Asset Management has analysed data from the past eight years on this subject for central and eastern Europe and the results make interesting reading. Continue reading »
The past year was a difficult one for many Arab countries undergoing historic political and economic change – Egypt, Jordan, Libya, Morocco, Tunisia and Yemen. The environment is challenging, but the underlying hope remains the same – a new society based on greater openness, greater opportunity and greater equality, writes Christine Lagarde, managing director of the International Monetary Fund, in the FT .
The first building block of a more inclusive economy must surely be macroeconomic stability. Unfortunately, this has come under threat in some countries – from slowing global growth, growing social tensions and rising political pressures. Continue reading »
New York headlines
* Russia says world is nearing currency war
* Workers down tools at South Africa’s Amplats
* Apple rolls out China credit facility Continue reading »
Turkey kicks off 2013 with grand ambitions and fewer ratings
Plans to proceed with a gigantic infrastructure project; a decision to dispense with the services of an international ratings agency; forecasts of continued growth – there is no mistaking that Turkey has kicked off the new year in bullish fashion.
The country’s headlines are currently dominated by the aftermath of the execution-style murder in Paris of three female activists of the outlawed Kurdistan Workers party, or PKK. But the context even for this is not unremittingly grim. Continue reading »
Further reading: riding the wave
Wednesday’s picks from the beyondbrics team: Chinese banks struggle to maintain sound lending practices while riding a wave of cash; averting an economic crisis could prove Morsi’s toughest challenge yet; meet the Polish window maker taking on the world; what to make of the Vietnamese stock market rally, and Brazil’s lag; plus, a reality check on the Russian economy. Continue reading »
Erste write-off shows Romania pain
Romania’s economy may be recovering from a deep crisis, but it is not recovering quickly enough for the country’s main lender, BCR.
Austria’s Erste Group this week announced that it would take a €300m goodwill charge largely due to the problems besetting BCR. So even if the International Monetary Fund is reasonably content with Romania’s economic progress, a key foreign investor is far from happy. Continue reading »
Currency war: back again?
The currency war rumbles on. As Bloomberg reports on Wednesday – under the headline “emerging markets backlash” – South Korea wants a meeting of G20 finance ministers and central bank governors in Moscow next month to focus on the adverse affects of easy money in the US, EU and Japan.
Korea has certainly been feeling the heat. The eurozone crisis dampened demand for its exports throughout 2012. Seoul says exports remain under threat from a stronger won and growing protectionism around the world. But will words translate into actions? Continue reading »
HK and China: a special relationship
From time to time concerns are raised that Hong Kong could one day be eclipsed by financial centres on the Chinese mainland, notably Shanghai. But such fears are overblown according to a new report from HSBC’s Donna Kwok, which says Hong Kong has quite enough advantages to avoid being put in the shade any time soon. Continue reading »
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