Daily Archives: Jan 17, 2013

Mrs Watanabe just can’t get enough of Turkey these days.

Last year, Japan’s legion of retail investors (dubbed Mrs Watanabe because women mostly manage the household savings in Japan) poured more money into Turkish lira-denominated bonds than any other type of overseas currency bonds – overtaking even the Brazilian real and the Australian dollar. Read more

Argentines continue sprinting away from their peso as if it were slathered with avian flu virus. After hitting a record high yesterday, the black market (or “blue”) dollar in Argentina hit another high on Thursday, of 7.54 pesos to the dollar, the local daily La Nación reported. Read more

Readers already know that Brazil is at the helm of the currency war when it comes to Latin America. However, increasingly, Colombia, Peru and even Costa Rica are turning into brothers in arms, determined to ease the appreciation of their own currencies, the peso, the sol and the colón, respectively. Read more

With about $300bn issued last year and a similar amount expected this year, surely the market for EM corporate bonds is getting a bit frothy?

Brett Diment, head of emerging markets and sovereign bonds at Aberdeen Asset Management, says not. And although he points to some reasons for caution, he thinks this is a market that still has legs. Read more

Another day, another central bank dollar auction, and another slide in the value of the Egyptian pound to new lows. Where will it stop? After the market panic of early January, a disorderly devaluation seems to be off the cards for now – that’s according to the new governor of the central bank and several economists who spoke to beyondbrics. Read more

Investors in EM equities have done well from the recent global rally, with gains in the $-based MSCI emerging markets index of 7 per cent since December 1 and nearly 13 per cent since September 1.

But the big winners have been the smaller frontier markets. Argentina tops the list with a 28 per cent advance since December 1, followed by Romania on 27 per cent and Serbia on 23 per cent. The sceptics might say, ‘So, what?’ Little bourses tend to be more volatile than their larger fellows. But Citi’s Andrew Howell thinks he has spotted an interesting and potentially profitable change. Read more

Mozambique is one of the much-sought after ‘M3’ emerging markets trio, along with Myanmar and Mongolia, with major offshore gas finds as well as large mineral deposits.

But mining is not as simple as setting a digger to work. While the country has around 23bn tonnes of coal, the infrastructure needed to support the extraction is starting from scratch. Any company that underestimates the costs can come unstuck, as Thursday’s resignation of Rio Tinto boss Tom Albanese showsRead more

Communist Laos has taken a further step from obscurity into a globalised world with plans for its first ever international bond issue.

The Bt1.5bn ($49.2m) issue will be in Thai baht – as a result of a key change in Thailand’s bond issuance regulations, which says more about Thailand’s ambition to be seen as a regional power than about Laos’s fledging pseudo-capitalist economy. Read more

Ethiopian Airlines DreamlinerWhile most of the coverage of the grounded Boeing 787 Dreamliner has focused on Japan and the US, the problem is worldwide, from Poland to Chile (via Ethiopia).

So who has the aircraft on order? Which airlines have already got them – and how big are their fleets? Read more

The Warsaw Stock Exchange on Thursday dismissed its high-profile chief executive, Ludwik Sobolewski, according to Polish media reports.

He was suspended last month following a probe into claims he allegedly sought funds from listed companies for a film involving his girlfriend and entitled “Pharoah’s Curse”. Acting CEO Adam Maciejewski takes over. Read more

* Rio chief quits after $14bn writedown

* Algeria hostage crisis enters second day

* Global regulators ground Dreamliners Read more

By NV ‘Tiger’ Tyagarajan of Genpact

The core of a business is the talent underpinning it. As the global landscape changes, emerging as well as advanced economies are faced with a scarcity of employable talent. Lack of such talent can impact businesses and pose grave challenges to every industry, but particularly for those in fast-growth economies. Read more

Thursday’s picks from the beyondbrics team: the WTO says we need to change the way we measure trade; the implications of the Mali conflict for Algeria; how spending on rail helped boost the Chinese economy; trouble ahead for Pakistan; why China’s Alibaba is an investment banker’s dream; plus, misconceptions and realities for prospective Africa investors. Read more

Philippine conglomerate JG Summit Holdings, which owns the country’s biggest budget airline, issued $750m worth of bonds in what manager HSBC said was the biggest global bond offering by a Philippine corporate borrower and attracted the lowest yield ever for 10-year US$-denominated debt from a Philippine company. Read more

Long assailed for running a massive trade surplus with the US, China has come out as the big winner from a new method for calculating global trade flows. When “value added” production is factored in, China’s surplus vis-à-vis the US shrinks by 25 per cent, according to the World Trade Organisation and the Organisation for Economic Cooperation and Development.

These are important findings that Beijing will no doubt cite the next time it wants to repel foreign criticism of its export and currency policies. But the calculations also give rise to a knock-on question: could China’s surplus prove to be stickier precisely because it still has a ways to go up the value chain? Read more

How much money can you lose up the Zambezi? Quite a lot if you are Rio Tinto.

The miner’s shares fell nearly 3 per cent early on Thursday after it announced a $14bn writedown and the departure of chief executive Tom Albanese and of Doug Ritchie, the man in charge of the group’s ill-fated Mozambique coal venture.

A spectacular example of the risks in mining – and the dangers of operating in emerging markets as the company disclosed that it never received formal approval for a key element of the Mozambique project – transporting coal on the Zambezi. Read more

A bit more evidence of China’s economic growth recovery in the shape of official electricity statistics. The State Electricity Regulatory Commission (SERC) said on Thursday that power consumption is expected to grow more than 9 per cent this year, according to Reuters.

Given that Li Keqiang, the prime minister-designate, once indicated that he put more faith in the electricity numbers than in the GDP data, these figures are worth considering. Read more

The snowflakes drifting earthwards made for a pretty sight in Seoul this week. But they had a darker aspect for many residents concerned about their toxic properties, as worries continue about South Korea’s vulnerability to air pollution in nearby China.

Much of eastern China has experienced its worst smog for years over the past week, caused largely by the past decade’s huge increase in coal usage by factories and power plants, as well as emissions from the rapidly growing number of motor vehicles. Since Saturday, South Korea has also suffered an acute rise in air pollution – albeit not to the same levels of Beijing – and local media, as well as government officials, are pinning the blame on China. Read more

Rana Kapoor of Yes Bank

What am I bid for 31 Indian bank branches? A little more today than yesterday, perhaps, given news that upstart Yes Bank could be in the market for the residual retail operation that Britain’s RBS is still trying to off-load, following its decision to shrink the business.

The decision of the fast-growing newcomer to enter the fray may yet come to nothing — but even if it does, the continuing absence of interest from other foreign banks in picking up RBS’s leftovers remains even more intriguing. Read more

* Bahrain’s Gulf Air to cut jobs and routes

* Global regulators ground Dreamliners

* FXCM looks to China for growth Read more