Daily Archives: Feb 28, 2013

Argentina's President Cristina FernandezWhat has Argentina’s holdout saga got to do with Monty Python?

Nothing, of course, but your correspondent could not help being reminded of this classic scene from The Life of Brian during the Second Circuit appeals court hearing in New York on Thursday. Except it wasn’t so much a question of who’s Brian, but who’s the victim here? Read more

Ask anyone with a passing knowledge of Mexico’s oil industry and they will likely tell you that Cantarell, the miracle oil field discovered in 1976 by a local fisherman, was the best thing that ever happened. Read more

Kenya’s two biggest banks by market capitalisation, Equity Bank and Kenya Commercial Bank (KCB), both reported solid full year earnings on Thursday, underlining strong growth potential for financial services in east Africa’s largest economy. Read more

By Jan Cienski and Neil Buckley

The slowing Polish economy is due for a boost from the stabilisation of the eurozone, which “is no longer a house on the verge of collapse”, Jacek Rostowski, Poland’s finance minister, tells beyondbrics. Read more

Alisher Usmanov, Megafon’s controlling shareholder, must be delighted with the decision to push ahead with the Russian mobile telephone operator’s initial public offering last November. Megafon shares – after reaching a record £28.68 on Thursday on the back of 2012 financial results – are now trading in London more than 44 per cent higher than at the time of the listing. Read more

Western energy majors that are knocking on Ukraine’s door, hoping to profit from a potential shale gas bonanza, would be wise to study the sour experiences of US power giant AES.

The US-based company announced earlier this month that it had agreed to sell two regional electricity distributors – Kyivoblenergo and Rivneoblenergo – to a Russian group called VS Energy. Read more

Slovenia’s political crisis has moved into a new phase after parliament ousted the centre-right government of prime minister Janez Janša and gave Alenka Bratusek (pictured), acting leader of the centre-left Positive Slovenia party, two weeks to win parliamentary approval for a new cabinet.

While the move creates an opportunity for Bratusek to forge the political stability Slovenia needs to tackle its mounting economic difficulties, there’s no guarantee of success. As Citigroup said in a note, “the key game-changer for the current political stalemate will be the formation of a new government.” Read more

Hungary’s next central bank governor is expected to be named on Friday and György Matolcsy, finance minister, is the most hotly-tipped candidate. So Matolcsy’s weekly newspaper column on economics, society and culture attracted more than the usual amount of interest on Thursday when he used it to accuse foreign businesses and banks of orchestrating attacks on Hungary and to assert that a planned loan agreement with the IMF and EU would have destabilised the government and led Hungary into default. Read more

By Saurabh Mukherjea of Ambit Group

When Manmohan Singh launched India’s economic reform programme as finance minister back in 1991, the country had a broken economic model, less than $1bn in foreign exchange reserves, a devalued currency, and a dire need for an IMF bailout.

Now Singh is prime minister and a lot else has changed, not least the economic model. But, as Thursday’s budget showed, the old resistance to structural reform is still very much alive. Read more

This might have been a triumphant year for Croatia. Less than a decade and half after its war of independence, the country will join the EU in July, symbolically returning to the mainstream European fold after decades of authoritarianism and conflict.

But 2013 could well be yet another year in recession for the troubled Croatian economy. A flash estimate published on Thursday suggested that GDP had shrunk 2.0 per cent in the full year 2012 – and prompting forecasts of a grim 2013. Read more

The plan is, in theory, to move from a 10-10-10 economy to a 5-5-5 one.

Not too long ago, Turkish officials were alarmed at an economy growing sometimes by an annual 10 per cent or more, with inflation to match and with a current account deficit at 10 per cent of Gross Domestic Product. It all looked unsustainable. Hence the push to bring inflation under control and limit the current account deficit, whilst maintaining reasonable GDP growth. Hence rough goal of 5 per cent growth, 5 per cent inflation and a 5 per cent current account deficit. Read more

When news broke over the weekend that Indonesia’s president was proposing to move Agus Martowardojo, the highly regarded finance minister, to the less influential role of central bank governor, most political observers in Jakarta sensed dark forces at play.

Since replacing ousted fellow reformist Sri Mulyani Indrawati in 2010, Martowardojo had clashed on a number of occasions with vested interests in the political and business elite who were unhappy about his desire to keep a tight grip on the national purse-strings. Read more

Shares in Strides Arcolab dropped 6.9 per cent on Thursday to Rs917.25, after the Bangalore-based pharmaceuticals company confirmed it is selling off its injectables unit at a lower-than-expected price.

There have been several rumoured buyers for the subsidiary, Agila Specialities, but it was announced on Wednesday that Mylan, the US generic drug producer, is to pay $1.6bn in cash for the business. Read more

The South African rand plunged by as much as 2 per cent against the dollar on Thursday after the country posted a record trade deficit last month of R24.5bn ($2.8bn) – compared to R2.7bn in December and forecasts of around R10bn. Read more

Yangon Economy Expands As Reforms Allow Business GrowthYou know that a country’s tourism industry is really taking off when a Hilton hotel moves in – particularly when that country has faced years of US sanctions. The buzz on the sidelines of Myanmar’s first tourism industry conference this week in Yangon was about Hilton Worldwide’s landmark deal to manage a 300-room hotel in the tallest building in central Yangon: Centrepoint TowersRead more

China’s new leadership has been making a lot of noise about cracking down on corruption. Now it seems that the military, where things are particularly bad, will start feeling the heat too. From May 1, all military vehicles will get new license plates, Colonel Geng Yansheng, defence ministry spokesman, said Thursday.

New plates would allow the authorities to crack down on the private use of military cars, the misuse of military plates and the abuse of privileges enjoyed by military officers in general. If it works, the move would certainly be popular among long-suffering civilians. Read more

* China eases path for short sellers

* India taps ‘super rich’ in budget

* Bulgaria to hold early elections Read more

After a string of cautious statements on China from US companies ranging from Caterpillar to Yum!Foods, the American Chamber of Commerce in Shanghai has declared that the days of relentless sales and rising profits are over.

The “new normal” is one of slower economic growth, rising costs, skilled labour shortages and an increasingly competitive business environment. Tougher times “will be the rule rather than the exception in the years ahead,” AmCham says in a report. Read more

Investors have a liking for Palaniappan Chidambaram, India’s finance minister, and his pro-investment reforms that have pulled India’s stockmarkets higher. But they didn’t much like the disappointing federal budget he laid out on Thursday for the year beginning in April.

The benchmark S&P Nifty Index closed down 1.8 per cent after his speech, while the Sensex was down 1.5 per cent. Read more

Thursday’s picks from the beyondbrics team: regulators fret over China’s shadow banking system; farewell to arms in Turkey’s Kurdish conflict? The ICC delay gives Uhuru Kenyatta a pre-election boost in Kenya; Mexico as the new Middle East; plus, the Florida connection to Russia’s ‘deoffshorization’ efforts. Read more