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Following the ceasefire between Ukrainian and pro-Russian separatist forces in the Donbas and an announcement by Kiev that it will grant self-rule status to the rebellious territories, the chances are increasing that Ukraine’s industrial heartland will find itself locked in a frozen conflict.

If so, what will happen to the Donbas economy, the source of 16 per cent of Ukraine’s GDP and 23 per cent of its industrial output? Continue reading »

Tanzania, the best-performing stock market in Africa so far this year, has lifted restrictions on foreign ownership of shares, potentially unleashing pent up demand for companies listed in the small Dar es Salaam Stock Exchange.

The exchange said in a statement released on Thursday that “as per the new foreign investors regulations dated 19 September 2014, there are no longer restrictions for foreign investors to buy shares or bonds at the exchange”.

Source: Dar es Salaam Stock Exchange

 Continue reading »

Official statements on bad loans in Chinese banks come with a health warning: analysts widely believe they understate the real level of delinquency by a wide – though unknowable – margin.

Nevertheless, official statistics can be helpful in assessing whether the problem is deepening or alleviating. In that context, an analysis published on Thursday by EY, the accounting firm, shows stress levels rising rapidly among China’s top banks. Continue reading »

** FT News **

* Asia ready for Fed tightening, says ADB | Development bank’s new chief economist says repeat of ‘taper tantrum’ unlikely

* Cameron vows to tackle ‘murderous’ Isis | Parliament expected to authorise action on Friday Continue reading »

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Rumours that China’s long-serving central bank governor will soon be replaced have been swirling around Beijing for the past couple of weeks as the country’s leaders debate the extent of the current slowdown and the appropriate response.

Zhou Xiaochuan, the urbane, English-speaking veteran head of the People’s Bank of China, has been dogged by talk of his imminent political demise throughout his long career. Continue reading »

The sigh of relief coming out of Mexico has been practically audible. “Alleluia!” exclaimed Nomura in a research note.

It’s not so much that there was doubt that growth was really happening, though after last year’s shock slump (GDP expanded a meagre 1.1 per cent overall), taking growth for granted looks ill-advised.

However, the indication that GDP grew by a stronger-than-expected 2.52 per cent in July, the fourth consecutive monthly rise, is a reassuring confirmation that things are on the right track. Continue reading »

The World Trade Organisation released its latest forecasts for global trade on Tuesday and it is not a pretty picture. The WTO’s economists have lowered their forecasts sharply. They now expect global trade volumes to grow just 3.1 per cent this year, down from the 4.7 per cent they predicted in the spring. The main reasons for the gloom should be familiar by now: the slow recovery in those all-important developed economies and the return of geopolitical threats such as the Ukraine crisis.

This downgrade was pretty sharp from the WTO but I wouldn’t be surprised if there are more to come in the months ahead. Continue reading »

Hat tips to a couple of beyondbrics readers for this one: the coining of a new economic predicament in the form of the stagno-squeeze, in which zero growth and rising prices leave governments and citizens squeezing every last drop of benefit from what they already have, given the difficulty of obtaining or producing anything more.

And how apt that Brazil’s government should immediately demonstrate the stagno-squeeze in action, by raiding its sovereign wealth fund to plug a widening hole in its budget. Continue reading »

Scientists are looking to a tiny variety of killer wasp to spare Indonesia from the ravages of a bug that is threatening the key cassava crop in south-east Asia’s biggest economy.

Since it arrived in Indonesia in 2010, the cassava mealybug – a small white insect that feeds on plants – had spread to the country’s main growing regions for cassava, which is a staple for tens of millions of people and generates around $1bn a year from industrial production. Continue reading »

** FT News **

* India over the moon after Mars success | Mangalyaan, or ‘Mars craft’, was launched from India in November last year and reached its destination after a nine-month voyage

* Stocks struggle as growth concerns weigh | Bourses outside of China fall back following a third day of losses in the US, while Hong Kong and Shanghai equities rise modestly Continue reading »

What is this? Brazil is withdrawing $1.5bn from its sovereign wealth fund to plug a hole in its budget.

President Dilma Rousseff justified the move saying the sovereign wealth fund was the equivalent of saving for a rainy day – and that a rainy day had arrived. With Brazil’s economy not growing, the government is missing its budget targets. Continue reading »

A closely-watched indicator of economic activity in China is showing an unexpectedly robust reading for September, according to an announcement on Tuesday. But is a real growth rebound underway, following several signs of a slowdown in the third quarter so far?

Hong Kong stock market investors appeared to reserve judgement, allowing the Hang Seng index to slip 0.49 per cent, or 118 points on Tuesday to 23,837. Economists and other survey-based indicators of Chinese economic activity reinforced the skepticism. Continue reading »

Investors interested in India are watching Prime Minister Narendra Modi to see if he will deliver the reforms needed to kick-start the economy.

But India’s economic future is also being determined to a large degree at the state level, according to HSBC, with some states surging forward and others lagging behind. The per capita GDP of Delhi, for instance, is $3,600. In the vast state of Uttar Pradesh, which has a population roughly the size of Brazil’s, it is $690.

That puts Delhi on a par with Ukraine, and Uttar Pradesh with Rwanda. Continue reading »

As beyondbrics noted early this month, the recent “dollar surge” and rising US interest rates are already having an impact on EM currencies. Two weeks later and the effects are becoming more pronounced, as the charts below show.

First, US interest rates. This is the yield on 10-year US Treasury bonds this year.

Source: S&P Capital IQ

 Continue reading »