Daily Archives: Feb 27, 2013

Hugo Chavez’s spending binge in the run-up to his reelection last year powered Venezuela’s economy forward to become one of the region’s best performers in 2012, growing by 5.6 per cent.

While there is doubt about how long this will last, with a significant retraction in spending now underway, the economic figures released by the central bank Wednesday night also showed severe strains in the balance of payments. Read more

A Total platform in the Niger deltaNigeria’s long-delayed 2013 budget was finally signed off on Monday by president Goodluck Jonathan, ending months of disagreements between the executive and legislature over spending plans.

A key sticking point has been setting the benchmark oil price, which determines how much the government can spend and how much it must save. The spenders have won, though concerns will linger over optimistic assumptions about the health of Nigeria’s oil industry. Read more

By Marcos Troyjo of Columbia University

Brazil’s strategy for growth over the past decade has favoured more than just consumption over investment, and more than ad-hoc fiscal incentives for companies and sectors blessed by the country’s “local-content” industrial policy. At its core, Brazil’s economic strategy is the expression of an approach that is mostly insular and which prioritises its domestic market over a more incisive interaction with the global economy.

From an international relations perspective, this approach reveals a great deal about Brazil’s lack of a sophisticated project in terms of both influence and prosperity. Read more

Poland’s government is tossing a bit of caution aside in its attempts to breathe some life back into the fading economy – as seen by the recent decision by the Polish Financial Supervision Authority (KNF) to ease up on regulations concerning consumer loans. Read more

An Egyptian protestor holding his national flag takes cover with fellow demonstrators as others throw stonesThe latest official figures show that unemployment in Egypt has risen to 13 per cent in the last quarter of 2012, up from 12.5 per cent in the third quarter, writes Heba Saleh.

This translates into a loss of 162,000 jobs across the economy. In comparison, unemployment on the eve of the 2011 revolt, which toppled Hosni Mubarak as president, was 8.9 per cent according to the government statistics agency.

But the official figures tell only part of the story. Read more

After the GDP numbers, the budget: South Africa’s finance minister Pravin Gordhan delivered the national budget on Wednesday, following Tuesday’s confirmation that GDP was 2.5 per cent for 2012.

What did analysts and the media make of it? Beyondbrics presents a round up. Read more

Xi Jinping has picked Moscow as the first foreign capital he will visit as Chinese president, raising hopes that Russia and China will finally agree the terms of a gas supply deal that has been in the works for more than six years.

Gazprom sees the fast-growing Chinese market as critical to its plan to globalise Russian gas trade, but has so far been unwilling to reduce gas prices enough get China to sign up for supplies. But with rival Russian gas producers suddenly courting China, Gazprom may have to cave in. Read more

Shares in Indian generic drugs group Ranbaxy Laboratories dropped 4.2 per cent on Wednesday to Rs399.20, having lost 4 per cent in the previous session, after the company posted disappointing financial results.

The numbers caused analysts to question the company’s expenses and launch of new drugs, given the performance. Read more

The day has arrived. The New York courtroom will be packed to the gunnels – even Argentina’s vice president and economy minister will be on hand as the dramatic “holdout” saga nears its finale. The lawyering will be slick, the arguments sophisticated. So who will win? Read more

No, not that Carlyle. And not that Buffett. Welcome to the alternate universe of Chinese finance.

A Chinese investment firm going by the name of Carlyle has accused the investment adviser to a fund known as the Buffett No. 1 Plan of committing fraud. The adviser of the Chinese Buffett fund has in turn accused the Chinese Carlyle of money laundering. Both deny the allegations. Read more

* India’s downturn ‘more or less over’

* Brazil may use imports to curb inflation, Mantega tells Valor

* Russia piles pressure on opposition leader with new accusation Read more

India may be the world’s second largest mobile phone market by users but so far it hasn’t been a major focus for Apple. In the absence of the iPhone, Samsung and BlackBerry have led the way in the country.

More recently, however, that has begun to change. Just as BlackBerry launches its first smartphone in India under the BlackBerry 10 operating system, Apple is joining the fray with a big push in the developing market. Read more

What rebound? After the catastrophic floods of late 2011, Thailand should by now be hoping for something closer to normality in terms of trade.

Instead, it’s got the biggest trade deficit on record in January – a whopping 5.5bn, the largest since 1991. What’s going on? Read more

Wednesday’s picks from the beyondbrics team: concerns grow in China about the two speed property market; Brazilian politics is no joke; a hard bargain for western construction companies in Abu Dhabi; Turkey needs foreign funds to modernise; plus, Chinese officials behaving badly. Read more

By Daniel Hui of JPMorgan

“It is said that enlightened governments… do not mobilise when there is no advantage, do not act when there is nothing to gain, do not fight when there is no danger.” – Sun Tzu

Markets have been captivated by the prospect and imagery of a “currency war” following Japan’s dramatic shift in monetary policy, and the recent 20 per cent depreciation of the yen. The narrative goes something like this: The sharp devaluation of the Japanese yen will be the casus belli which will provoke retaliatory devaluations by other Asian economies in self-defence.

All very colorful, dramatic and scary, to be sure. But to-date this is purely hypothetical, and likely to remain so. Read more

Brics summit: so last year

The plans of the Brics countries to establish a Brics bank are gathering pace in the advance of the fifth summit next month of the five countries – Brazil, Russia, India, China, and their poor cousin South Africa.

Even though key decisions have yet to be made – such as where it would be based and what exactly it would do – some elements are emerging from the discussions, notably the bank’s possible capital – $50bn. Read more

Exports between leading emerging markets will drive global growth in the coming decades, transforming international trade flows, according to a report published on Wednesday, writes Claire Jones.

The report, compiled by HSBC and Oxford Economics, predicts that intra-emerging market trade is set to grow rapidly in the years to 2030 as these economies grow wealthier and domestic demand rises. Read more

By Nicholas Watson of bne

The creation of New World Resources by tycoon Zdenek Bakala out of the remnants of the Czech coal industry and its subsequent IPO was aimed at producing a miner capable of consolidating Central Europe’s fragmented coal industry.

Not for want of trying, NWR’s efforts have so far been in vain, and its new chairman now says the miner intends to spread its net wider, including as far afield as the US. Read more

* AIA beats forecasts with $3bn profit

* Brazil sugar surplus hits prices

* China to tighten shadow banking rules Read more