Mexican peso: getting a bump from better US prospects

David Keohane

David joined the FT in 2011 as a Marjorie Deane fellow. He covered emerging markets, equities and currencies before making the jump over to FT Alphaville in May 2012.

Mexican peso: getting a bump from better US prospects

Apr 4, 2012 11:37pm by David Keohane

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The Mexican peso has had a very nice 2012 so far and it is easy to see why. In a world where the prospect of a strong US economy and a faltering global economy is very real, Mexico is uniquely placed among emerging markets to hitch a lift on its neighbour’s coat-tails.

The peso’s 9 per cent bump against the dollar, 7 per cent bump against the euro, and 17 per cent bump against the yen since January 2012 speaks volumes about its strong correlation to the health of the US economy. That correlation might just make the peso the perfect EM currency bet in a risk-off world. Continue reading »

Tags: currencies, foreign exchange, Mexico economy, peso Posted in LatAm, Mexico | Permalink

The great migration: less New York more New Delhi

Apr 4, 2012 8:33am by David Keohane

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Everyone is moving to the city – and, especially, emerging market cities. According to a report by Credit Suisse this week, by 2037 half of the world’s population will live in one emerging market city or another.

So where should investors look to first if they want to capitalize on this trend? Apparently the smart money should head to China, Egypt, India, Indonesia, Nigeria, Pakistan, the Philippines, Thailand and Vietnam. A motley bunch indeed but the logic is compelling. Continue reading »

Tags: cities, rural economy Posted in Global | Permalink

Egypt’s currency tightrope

Apr 3, 2012 7:50am by David Keohane

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It has been a long road and it is threatening to get longer. Every month since the start of 2011 has brought with it an average fall of $1.4bn in Egypt’s foreign currency reserves.

And according to the Egyptian ministry of finance they now sit at $15.1bn. That is below the three months of import cover viewed as safe minimum by the International Monetary Fund and well below the $36.1bn Egypt boasted in December 2010, before its revolution began. Continue reading »

Tags: currencies, Egypt economy Posted in Africa, Egypt | Permalink

From FT Alphaville February 29, 2012

Financial markets: the EM swing voter

Many politicians and despots agree that democracy can be really annoying. Unfortunately for them, there will be around 60 political transitions of one kind or another in 2012. Happily for investors, markets seem to like the idea.

It is in emerging markets where elections will hit hardest — if you include China’s transition, nine of the biggest EMs will vote this year. Those nine account for 71 per cent of the GDP of the 21 countries in MSCI global emerging markets (GEMs) index, 78 per cent of population and 73 per cent of market cap. Continue reading »

Tags: elections, equities Posted in Global | Permalink

Erste in CEE: bearly optimistic

Jan 20, 2012 12:57pm by David Keohane

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It’s not easy being a bull in central and eastern Europe these days. No matter how much you might want to sell the story the facts just keep getting in the way.

Henning Esskuchen, head of CEE equity strategy for Erste, is one such bull who finds himself in a very tough position. In a report on CEE equity strategy Esskuchen’s normal optimism is very definitely dimmed… not that he couldn’t find some sparks of light in the gloom. In his own words, Esskuchen “dares to hope”. Continue reading »

Tags: economy, equities, Erste Posted in Europe | Permalink

Diageo goes Ethiopian with Meta Abo

Jan 10, 2012 11:30am by David Keohane

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African beer is big business and every brewer you can name is looking to gain a foothold in its fast-growing markets. Diageo, which already sells more Guinness in Nigeria than it does in Ireland, this Tuesday confirmed it has once again upped its presence on the continent by buying Ethiopian state-owned brewer Meta Abo for $225m. Continue reading »

Tags: Diageo, investment, sub-Saharan Africa Posted in Africa, Ethiopia | Permalink

Nigeria: so long to the fuel subsidy

Jan 3, 2012 11:44am by David Keohane

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After a long, loud build-up Nigeria’s battle of the fuel subsidy got serious over a very quiet New Year’s weekend. If the government had hoped a muted announcement would lead to a muted reaction they were, to put it mildly, disappointed.

The removal of the subsidy led to a doubling of fuel prices on Monday morning, according to Reuters, and an unsurprisingly furious reaction from Nigerians for whom the subsidy had represented one of the few tangible benefits they received as citizens of Africa’s largest crude-oil producer. Continue reading »

Tags: deficit, oil & gas, protest, Shell Posted in Africa, Nigeria | Permalink

BB 2011 awards: EM winners and losers

Dec 30, 2011 5:30pm by David Keohane

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It has been a torrid year for emerging markets and there have been very, very few success stories. Amid fears of a global recession and huge volatility across markets, investors have fled even remotely risky assets. That has spelt disaster for EMs.

The MSCI emerging market index has fallen 21.5 per cent since January and there have been very few economies which have escaped that trend. Continue reading »

Tags: 2011 review, equities Posted in Global | Permalink

Asia market wrap: a year to forget

Dec 30, 2011 11:31am by David Keohane

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It has been a miserable 2011 for Asian markets. Fears of a global recession and extreme market volatility have seen Asia’s bourses shed nearly one-fifth of their value with many suffering their worst annual losses since 2008.

And 2012 is unlikely to bring any succour for investors who are fleeing into safe havens while warily eyeing up a European led recession and a slowdown in China. Risk-off is here to stay – for a while at least. Continue reading »

Tags: markets Posted in Asia | Permalink

From FT.com December 29, 2011

Vale docks first ship in China

Vale, the world’s largest iron ore producer by volume, took a significant step towards its goal of controlling all its shipping to China after it was confirmed that one of its giant new Valemax ships had been allowed to dock in China for the first time.

A person familiar with the situation confirmed that the Berge Everest, owned and operated by Berge Bulk, part of Hong Kong’s BW Group, but chartered long-term to Vale, was allowed into the port of Dalian, north-east China, to unload on Wednesday.

Continue reading after the break

Tags: coal, Shipping Posted in Brazil, China, Global | Permalink

S&P looks kindly on Nigeria

Dec 29, 2011 11:30am by David Keohane

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Another emerging market has seen the kinder face of the ratings agencies. This time it is Nigeria’s turn – its credit rating outlook has been upgraded to positive, from stable, by Standard and Poor’s on Thursday.

Nigeria is currently rated ‘B+/B’ by S&P, which is three steps away from the minimum investment grade. But, according to the ratings agency, its new positive outlook means there is now “at least a one-in-three likelihood of an upgrade if Nigeria’s reform initiatives support economic growth, build stronger buffers against Nigeria’s dependence on petroleum revenue and reduce pressure on the exchange rate”. Continue reading »

Tags: credit ratings, economy, post-election Nigeria Posted in Africa, Nigeria | Permalink

Japan and India’s currency swap

Dec 29, 2011 11:03am by David Keohane

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Japan and India are looking to increase economic ties and a $15bn currency swap agreement, announced on Wednesday, is one way to do just that.

The new pact, sealed by Yoshihiko Noda, Japan’s prime minister and Manmohan Singh, his Indian counterpart, replaces an old $3bn swap-deal and will see the two countries swap currencies for US dollars and tap into each other’s foreign exchange reserves to ease any liquidity problems, according to the BBC. Continue reading »

Tags: central banks, currencies Posted in Asia, India | Permalink

From FT.com December 28, 2011

China outshines US as top IPO venue

China has again outshone the US as the top venue for initial public offerings despite steep share price falls on the mainland and Hong Kong stock markets, highlighting the shift in global financial activity from west to east.

Companies raised $73bn from IPOs in Shanghai, Shenzhen and Hong Kong this year, according to Dealogic – almost double the amount of money raised on the New York Stock Exchange and Nasdaq combined.

Continue reading after the break

Tags: China economy, IPOs Posted in Asia, China | Permalink

The external impact of China’s renminbi policy – not so simple

Dec 29, 2011 7:00am by David Keohane

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China's currency, the renminbi

It’s always nice to see a bit of academic clarity injected into a muddy debate. And in a paper published on Wednesday looking at the impact of renminbi appreciation on company valuations, Barry Eichengreen and Hui Tong (of Berkeley and the IMF) do just that.

The authors’ findings suggest that, unfortunately for those who advocate a “RMB must appreciate now” position, the actual situation is not that simple: it is entirely conceivable that a RMB appreciation might have overall negative consequences for foreign firms. Continue reading »

Tags: academic research, China economy, renminbi, trade Posted in Asia, China | Permalink

Cheung Kong loses S&P credit rating

Dec 28, 2011 12:39pm by David Keohane

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Cheung Kong Holdings, which is controlled by Hong Kong based billionaire Li Ka-shing (pictured), has had its long-term corporate credit rating withdrawn by Standard & Poor’s, the rating agency, which says it is not in a position to “accurately assess” its credit quality.

In its statement, S&P said Cheung Kong Ltd (1:HKG), Hong Kong’s second-biggest builder by market value, had lost its A- rating because the ratings agency had “no access to the company management for the past three years.” Continue reading »

Tags: Hong Kong, Hong Kong property Posted in Asia, China | Permalink

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