New boss of WTO: it’s the Brazilian
So, Roberto Azevêdo, Brazil’s candidate for director general of the WTO, has pipped his rival Herminio Blanco of Mexico for the job.
But there is still a question to be answered: Who won? The man or the country? Continue reading »
Brazilian industry: ready to roll?
Some relief on Tuesday for a Brazilian government getting desperate for signs of life in the economy: more motor vehicles were made in Brazil in April (340,865) than in any other month in history. Considering the auto sector makes up about a fifth of Brazilian industry, that’s got to be good news. Hasn’t it?
Well, yes and no. Continue reading »
Malaysia down to the wire. What next?
As Jeremy Grant writes in Friday’s FT, Malaysia’s election this weekend is likely to be the closest in the country’s history. The ruling Barison Nasional party, which has dominated Malaysian politics since independence in 1957, faces the first real challenge to its power and while prime minister Najib Razak says he is confident of winning a two-thirds majority, the outcome is far too close to call. More Malaysians than ever before seem ready for change. Are they likely to get it? Continue reading »
EM youth bulge: a demographic dividend or time bomb?
A fascinating infographic from Euromonitor International (reproduced below) shows us not only that half of the world’s population is aged under 30 but also that 90 per cent of those youngsters are to be found in emerging markets.
So, EMs have youth on their side and the future is rosy! Not so fast… Continue reading »
Alibaba and Sina Weibo: deal done. Now, about those revenues…
Shares in Sina Corp, the Nasdaq-listed Chinese online media group, rose nearly 21 per cent during trading on Monday after the company said it had agreed to sell 18 per cent of Weibo, its Twitter-like micro-blogging service, to Alibaba Group for $586m. The two came close to a similar deal five months ago. Now they have tied the knot. Continue reading »
India’s love affair with gold: breaking up is hard to do
Yes, it's made of gold
Indians are easily the world’s most voracious buyers of gold so as prices fall, demand should rise, right? Right. Conversely, as prices rise, demand should fall, right? Wrong. Experience of the past few years suggests that Indians buy gold with an apparent disregard for price.
That’s a headache for policy makers because gold imports have a big impact on India’s current account deficit. But Leif Eskesen, chief economist for India and Asean at HSBC, says there is scope for policy to take some of the passion out of Indians’ love affair with gold. Continue reading »
An ETF for EM inflation-linked bonds
Money managers seeking access to EM domestic debt have a new option from Thursday with the launch of what is claimed to be the world’s first exchange traded fund for emerging market inflation-linked bonds. Continue reading »
Chart of the week: Brazil’s foundations, undermined?
But behind recent numbers on inflation is another set of numbers on retail sales, which fell in February for the first time in a decade. If that turns into a trend, the very foundations of Brazil’s recent growth story will be undermined. Chart of the week takes a look. Continue reading »
Brazil’s central bank: strung up by its own indicator
It was slightly better than expected. But not by enough. The latest measure of Brazil’s troubled economy will have left policy makers in a quandry.
The central bank’s monthly activity index contracted by 0.52 per cent in February, dashing any hopes that its 1.4 per cent expansion in January was the start of a sustained recovery. It comes after figures this week showed inflation rising above the government’s tolerated maximum – figures that might have strengthened the resolve of any hawks at the central bank keen to raise interest rates at its policy meeting next week. That now looks a harder trick to pull off. Continue reading »
Moody’s puts negative outlook on Mongolian banks
Mongolia is one of the brightest hopes among the world’s frontier markets: a fast-growing economy with a vibrant democracy and a young population. So it’s salutary to be reminded that not all is necessarily well.
On Thursday, Moody’s Investors Service published its first report on the country’s banking sector, giving it a negative outlook. The reason, writes Hyun Hee Park, Moody’s analyst in Hong Kong, is “rapid loan growth in an economy that is increasingly exposed to commodity-driven boom-bust cycles,” exacerbated by “high loan concentrations, weak risk-monitoring systems, and the developing nature of the regulatory framework.” Ouch. Continue reading »
Brazil inflation: bad news
Figures for March inflation, published on Wednesday, will have made painful reading in Brasília: for the first time since late 2011, consumer price inflation was above the government’s upper limit of 6.5 per cent a year, at 6.59 per cent.
But it could have been worse. Indeed, the benchmark IPCA index rose 0.47 per cent during March, less than the 0.5 per cent consensus in a Bloomberg survey of 38 economists. And inflation in the month was rather less than February’s 0.6 per cent. So, sighs of relief, rather than gnashing of teeth? Continue reading »
PKN: dishing out the dividends
Photo: Bloomberg
Good news for Poland’s cash-strapped government on Friday: PKN Orlen, the state-controlled refiner, is to start paying dividends again after a five-year hiatus.
True, the state’s stake in PKN is just 27.52 per cent, so much of the benefit will go elsewhere. But as readers of P G Wodehouse will know, every little bit added to what you’ve got makes a little bit more. Continue reading »
[snap] S&P brings Turkey within one notch of investment grade
Standard & Poor’s has raised Turkey’s foreign currency sovereign credit rating one notch to BB+ from BB – one step short of investment grade.
Are the three big agencies toying with Turkey? Fitch gave Turkey investment grade last November and Moody’s seemed ready to follow suit but didn’t. Now S&P has come tantalisingly close. But Wednesday’s surprise move will be welcomed in Ankara, anyway. Continue reading »
Turkey: interest rate cut is another dose of ‘flexible’ policy
Turkey’s central bank cut its overnight lending rate by 1 percentage point on Tuesday to 7.5 per cent but kept its overnight borrowing rate and its repurchasing rate – its main policy rate – on hold at 4.5 per cent and 5.5 per cent, respectively.
It is a typical example of what the bank calls its ‘flexible’ monetary policy, designed to adapt to uncertainties in the global economy. Analysts mostly call it ‘confusing’. Continue reading »
China and Brazil: finally delivering a currency swap?
It’s been a good nine months in gestation, so maybe next week’s Brics summit will be the right moment for China and Brazil to deliver their promised Rmb190bn ($30bn) currency swap.
Hong Lei, China’s foreign ministry spokesman, hinted as much on Friday when he said an agreement would be signed “soon”. Continue reading »
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