Daily Archives: Feb 25, 2013

a demonstration in support of Venezuelan President Hugo Chavez, December 15, 2012How short people’s memories are – especially when there’s so much to remember. With the intense political drama unfurling in Venezuela at the moment, the (incredibly dramatic) explosion of the Amuay refinery six months ago seems to have been largely forgotten.

Not by everyone though. On Monday, for example, one outraged newspaper attempted to jolt Venezuelans out of their fixation on the present to remind them how disastrous the whole Amuay affair has been, with the oil-rich country’s gasoline imports from the US apparently having quadrupled since the tragic accident. Read more

By Tony Volpon of Nomura

Why has growth in Brazil been so disappointing these past two years, falling from 7.5 per cent in 2010 to below 1 per cent in 2012? There are two competing responses. The first, favored by the government, puts the blame mainly on external factors, such as the European crisis and the growth slowdown in China. The second emphasizes supply-side constraints, whether in poor infrastructure or tight labor markets.

Though these two explanations are not mutually exclusive, they are hard to fully square up with the data. Read more

Borders are always weird places and few are stranger than the US-Mexico border, the busiest in the world. More than $1bn’s worth of goods cross it every day. Indeed, last year bilateral US-Mexico trade topped $500bn, about the same as total US-European trade – which puts the much vaunted US-European Union free trade deal that Barack Obama has mooted in context. Read more

Hungary’s central bank is widely expected to cut its benchmark rate by 25 basis points to 5.25 per cent on Tuesday, at the last policy meeting before governor András Simor (pictured) steps down.

In a big week for the National Bank of Hungary, prime minister Viktor Orbán is due to name Simor’s successor on Friday, just three days before the new chief starts on Monday, March 4. Since Orban has made clear he wants a more relaxed monetary policy, he seems certain to pick a governor sympathetic to his views – possibly economy minister György Matolcsy. Read more

Both pessimists and optimists have something to chew on in the latest data release on the Polish economy.

Retail sales performed better than expected, but unemployment rose to levels last seen six years ago. Read more

Egypt’s continued political turmoil has made its life hard in international debt markets, but its government is hoping to secure new funds by less conventional means through the issue of the country’s first sovereign Islamic bonds.

According to a Bloomberg report, the government plans to raise up to $1bn by June through sukuk sales, with one for domestic investors and one for foreign investors. Read more

People walk around as they visit the opening of the International Defence Exhibition and Conference (IDEX) at the Abu Dhabi National Exhibition Centre in the Emirati capital on February 17, 2013. A top French defence industry official said that talks to sell Rafale jet fighters to the UAE were "progressing well", expressing confidence that a deal could be reached with the Gulf state.Abu Dhabi is pressing hard to build a homegrown arms industry, part of a push by Gulf governments to use their status as leading international weapons buyers to create domestic jobs and diversify away from oil.

Tawazun, Abu Dhabi’s state-owned defence company, has this month announced a flurry of deals to supply components to big western businesses, in what analysts see as part of a quid pro quo for contracts multinationals hope to win in the Gulf. Read more

With interest rates stuck at historic lows in South Africa, unit trusts have had something of a boom over the past 6 to 8 months as investors turn from cash to unit trusts and other collective investment schemes. According to the Association for Savings and Investment SA (Asisa), the local collective investment industry attracted a record net inflow of R120bn ($13.6bn) in 2012. Read more

Russian companies have this year raised more money via the offshore renminbi debt market than their Chinese counterparts.

Russian companies – all of them banks – have raised $482m via four debt issues, compared to $477m by Chinese companies, according to Dealogic, highlighting the growing appeal of the dim sum bond market as a cheap source of funding for emerging market borrowers. Read more

Agus Martowardojo

Indonesian President Susilo Bambang Yudhoyono has set the cat among the pigeons with a surprise choice of nominee as central bank governor to succeed Darmin Nasution, whose term ends in May.

The rupiah has barely moved since Saturday’s news that the president had plumped for finance minister Agus Martowardojo (pictured left). But his record has been questioned by some members of parliament, which will have the final say on the appointment. Prepare for rumbles, with politicians increasingly focusing on the 2014 presidential election. Read more

* China’s slower manufacturing casts shadow over recovery: economy

* Indonesian MPs air doubts over president’s nominee for central bank

* Park pledges ‘clean’ government in S Korea Read more

Photo: Bloomberg

Some 40 per cent of India’s 1.2bn people have no access to banking services so you might expect newcomers to be crowding into an untapped market. But in the past twenty years, barely a dozen private-sector banks have been licensed in the country. And with stringent capital requirements, existing players aren’t finding it easy to expand their loan books, either.

In an attempt to improve financial inclusion, the Reserve Bank of India has issued guidelines for a fresh round of banks to be licensed – and the path is clear for India’s big corporate houses to apply. Read more

Monday’s picks from the beyondbrics team: the challenges of monitoring global supply chains; why the anticipated IMF loan is no silver bullet for Egypt’s problems; the obstacles to growth in Sharia finance; Africa’s doubtful data; an interview with the chief executive of Safaricom; plus, India’s reform marathon. Read more

What to make of Monday’s China flash purchasing managers index from HSBC, given the distorting impact of the Chinese New Year holiday?

With a reading of 50.4 (just above the 50 threshold that separates contraction and expansion), there’s something in it for bulls and bears alike. Read more

Turkey begins this week with two important developments for investors, officials and ordinary citizens. One is that the country now no longer faces the prospect of being suspended or blacklisted from an international financial body. The other is that a showpiece privatisation has been halted by order of prime minister Recep Tayyip Erdogan (pictured). Read more