Why did inflows of foreign direct investment to China jump by a strong 16.1 per cent to $10.8bn in January?
Such a robust performance may seem counterintuitive. The Chinese economy slowed last year. Its manufacturing competitiveness is being eroded by a welter of rising costs. Several high-profile incidents – a corruption scandal at GSK, the UK pharmaceuticals company, a $580m write-down on a China acquisition by Caterpillar, the US machinery giant, and the retreat of Revlon Inc, the cosmetics company, have all raised questions over the longevity of China’s allure.
But even so, say analysts, the country retains its attractiveness for foreign investors simply because it generates superior returns. Continue reading »
The Indian government is keen to draw investors to the country, easing FDI caps in a range of sectors over the last year and a half. But you might think recent financial instability and political uncertainty ahead of this year’s general elections would hurt enthusiasm.
However, an Ernst & Young survey of 500 international investors has found some optimism about Asia’s third largest economy. Continue reading »
If investing is all about value creation, the latest batch of figures from Brazil’s central bank make for sobering reading. They show the rich returns you can make when investing in Brazil goes right – and the huge losses that result when it goes wrong. Over the past three years, foreign direct investors and buyers of Brazilian portfolio assets have suffered value destruction on a colossal scale.
An analysis of central bank figures by beyondbrics shows that ,taken together, flows of foreign direct investment to Brazil and foreign investment in Brazilian portfolio assets were worth more than $260bn between January 2011 and November 2013. Over the same period, in spite of those inflows, the value of such assets held by foreigners fell from $1,351bn to $1,327bn, a loss of $24bn, implying value destruction of more than $284bn in less than three years. Continue reading »
Don't worry, it's not happening
The Aam Aadmi Party (AAP), having assumed power in Delhi just last month, is starting to deliver on the populist promises in its manifesto. On Monday, its target was FDI in multibrand retail as it took advantage of the opt-out clause and rolled back approvals for the state.
For foreign investors, it makes India that bit less attractive. Continue reading »
Majid Al Futtaim, the malls operator that brought an indoor ski slope to Dubai, is seeking to double revenues over the next five years by bringing Carrefour markets and mega-malls to more countries across the broader region.
Having expanded across 12 countries in the Middle East, North Africa and central Asia, the retailing giant is scouting four out of the 14 sub-Saharan African countries for which it holds Carrefour franchisee rights. Continue reading »
By Leslie Young of the Cheung Kong Graduate School of Business
The past few weeks have seen a significant uplift in UK-China relations. After a long diplomatic freeze, a warming of relations between Westminster, the City and Beijing was manifested in highly-publicised visits by the UK’s Chancellor and the Mayor of London in early October; next up is the Prime Minister’s visit to China. The next few days will see the largest-ever UK business delegation hit Beijing and Shanghai. But how to turn such visits into a long-term, strategic partnership with China that generates jobs and sustains growth? Continue reading »
By Kim Kyung-Hoon of SERI
Global investors who have shifted to “safer” Korea from southeast Asia should not assume they are unbuckled completely. Korea is raising its bet on Asean and its corporations’ balance sheets should increasingly reflect the economic direction of the 10-nation bloc.
Fronting the push is President Park Geun-hye’s self-styled “sales diplomacy.” Continue reading »
Last year the Indian government eased the rules on FDI into single-brand retail, allowing 100 per cent foreign ownership. Yet Villeroy & Boch, the German-owned porcelain manufacturer, has chosen to come to India in a joint venture with a local partner.
It raises questions about the policy reform and whether foreign stores will set up alone in India – even if they are now allowed to. Continue reading »
By Kim Hayward of BDO
The growth potential for medium sized businesses following international expansion is enormous. For many, the route may lie in emerging markets; yet although these markets play an increasingly large role in the global economy, just over 5 per cent of UK exports are to the Bric countries and the UK still exports more to Ireland than to China – and this is likely still to be the case in 2030. To unlock their potential, MSBs must capitalise on opportunities in emerging markets with a combination of strategy and opportunism. Continue reading »
By Jochum Haakma of TMF Group
The ink is barely dry on the latest iteration of the IMF’s World Economic Outlook and once again China and, more specifically, the health of its economy finds itself back under the global spotlight. But rumour and speculation are no strangers to China and while debate about a hard landing and slowdown may continue, on the ground, sentiment remains positive.
Such confidence is good news, not only for those countries that have fuelled their own growth clutching the coattails of China’s incessant demand for commodities, but also for less established trade partners in more advanced economies. Europe should take note. Continue reading »
How do international brands such as Jimmy Choo and Burberry work in India? What makes Bottega Veneta and Canali sell in a nation where the GDP per capita is less than the price of many designer handbags?
Genesis Luxury offers an answer. Founded in 2008, the group works as local partner in India for these and many other high end brands, through joint ventures and marketing and distribution agreements. Continue reading »
Can North Korea’s Kaesong become an internationally competitive industrial park on the back of its ultra-cheap labour? Probably not. But at least its backers are trying. Seoul’s unification ministry in charge of inter-Korean relations said on Wednesday the two Koreas will hold a business fair at the North Korean border town in October to attract foreign investment, after they agreed to reopen the complex next Monday. Continue reading »
Ajith Nivard Cabraal, the Sri Lankan central bank governor, is on a mission – to China.
As the world waits for the US Federal Reserve to start “tapering” its $85bn monthly bond purchase programme – the prospect of which has hit many emerging market currencies including the Sri Lankan rupee – Cabraal is heading to China to attract more investment to the south Asian economy. Continue reading »
By Nicholas Watson of bne
It has been a good week for the Serbian economy: a day after the prime minister attended a ceremony on Wednesday to break ground on a new $35m Cooper-Standard auto component plant, his deputy was shaking hands with the head of Etihad, the United Arab Emirates airline, on a €40m deal that will save JAT Airways from the same fate as some of the region’s now-defunct carriers. Continue reading »
India has long struggled with its rules on foreign direct investment, especially in retail. There have been street protests over retail giants such as Walmart entering the country, as small retailers worry about the impact. And the reforms have been something of a mess, prompting as many questions as answers.
So did amendments announced on Thursday to FDI policy in retail clarify anything? Continue reading »