It’s hard to imagine the scale of destruction following the typhoon that hit the Philippines on Friday, killing an estimated 10,000 people and leaving a trail of devastation.
However, despite Haiyan being one of the strongest typhoons ever recorded, the impact on the Philippines economy may be relatively slight, and the reconstruction effort may even boost GDP. While that is hardly a comfort to people without homes or in mourning, an economic slump would be a double whammy better avoided. Continue reading »
That's the easy part
Africa’s mobile revolution has become synonymous with its improving economic performance, but the sector is hitting some serious road bumps along the way.
After five years posting the highest growth rates in the world, the uptake of new mobile subscriptions across the sub-Saharan region is set to slow, by the reckoning of a report from GSMA, an association of mobile operators. Continue reading »
The IMF’s World Economic Outlook caused a bit of a stir this week, given the gloomy outlook for emerging economies.
But within the Fund’s number crunching a few things were a little overlooked. Such as the rather drastic revisions to some GDP forecasts from the previous April outlook. Look away Libya, hello Turkmenistan. Even some major EMs got a significant downward shift. Chart of the week takes a look at the difference 6 months can make. Continue reading »
It was only two paragraphs long. But the fallout from a surprise sales warning issued by Unilever last week was anything but minor.
Shares in consumer goods companies across Europe and the US all fell after Unilever warned that weak growth in emerging markets, exacerbated by currency weakness in countries from India to Indonesia and Brazil, would result in underlying sales growth of 3 to 3.5 per cent for the third-quarter. This compares with growth of 5 per cent reported during the first two quarters of the year. Continue reading »
Beijing is China’s seat of government, home to its busiest airport, its major sporting events and some of the country’s biggest companies. As China grows in size and wealth over the coming years, will the capital keep its grip on business – or will it see its influence slowly slip away? Continue reading »
The door is not exactly being kicked wide open. But after two years of accounting scandals and critical reports from short-sellers, Chinese companies are slowly making their way back to Wall Street again – and it’s not just Alibaba eyeing up New York.
On Monday, Qunar, a popular travel website in China, filed paperwork with the US Securities and Exchange Commission to raise $125m in an initial public offering.
The move comes just three days after 58.com, China’s answer to Craigslist, filed to list on the New York Stock Exchange with an offer to sell $150m of ordinary shares in the form of American Depository Shares (ADSs). A day earlier, Montage Technology Group, a Shanghai-based computer chip maker, raised $71m in its public debut. Continue reading »
When Ben Bernanke raised the prospect of a tapering of the US Federal Reserve’s monthly bond purchases in May, the impact on EM currencies was immediate: they slumped. By August, their decline in some instances was looking like a rout – the Indian rupee, especially, seemed on the brink of an all-out crisis.
But then something changed. Currencies around the emerging world began to recover. EM borrowers are once again tapping the hard currency bond markets. Big EM central banks, it seems, have seen off speculators: Brazil’s by intervening in currency markets, for example, Indonesia’s by raising rates. Has the EM story entered yet another new chapter? The answer, almost certainly, is “No”. Continue reading »
When we think of Groupon, the US-based daily deals website, it’s usually for cut-price getaways, budget fine dining or an affordable day of paragliding – and the sacking of its 32-year-old founder.
But what about onions? Continue reading »
By Gerardo Rodriguez of BlackRock
Investing in emerging markets has never been boring. Recent market volatility has spawned various comments on the future of the asset class as a whole. Stronger fundamentals have made emerging markets more resilient and safer places to invest. But the challenging external environment and imminent tapering by the Fed is exposing some of the weak spots of EMs. The adjustment of relative prices is a necessary condition for the rebalancing that is required. However, there are risks that the correction goes too far and the asset class falls into a vicious cycle. Continue reading »
If anyone asks what the hottest economic concept is in China at the moment, the answer must be: Likonomics, a term coined by Barclays in late June to refer to Premier Li Keqiang’s economic policies as he completed 100 days in office.
Likonomics apparently has three key pillars: no stimulus, deleveraging and structural reform, and it stands for trading the economy’s short-term pain for long-term gain. But not everyone is happy with the new phrase. Continue reading »
Quantitative easing was a big factor behind growth in emerging markets after the 2008-09 crisis. And when Ben Bernanke, chairman of the US Federal Reserve, suggested last month it may be about to end, he triggered a big sell-off in EM assets.
So when Bernanke declared on Wednesday evening that “highly accommodative monetary policy” was here for the foreseeable future, it was no surprise that his comments delivered a bounce in EM markets.
But it is unlikely that EM central bankers are heaving a collective sigh of relief. Monetary policy in emerging markets has become much less dependent on Fed policy than you might think. Continue reading »
Now everyone can see the true colour of China’s exports. The decline of both exports and imports in June surprised the market, but to some observers, the news perhaps is perhaps less shocking: it’s been a bad year for quite a while after all.
The 3.1 per cent fell in exports in June from a year earlier, the worst data since October 2009, has worsened the export growth collapse that started in May. After the regulatory changes towards hot money inflows through fake trading and over-invoicing, exports growth in May slumped to 1 per cent from 14.7 per cent in April. Continue reading »
There are several things you might associate with Bitcoin: freedom from central banks; criminal activity; boom and bust; the Winklevii. How about China?
Although most Bitcoin enthusiasts and pioneers are US based, China has emerged as a big centre of Bitcoin users. The question is: why, and will the authorities allow it to flourish? Continue reading »