With the Dow Jones at a record high, and global stocks at their highest levels since June 2008, sentiment is finally improving in emerging markets too, though not necessarily in emerging market equities.
That’s the conclusion of this month’s investor sentiment survey from Société Générale, which reports a sharp increase in short-term bulls: 57 per cent of fund managers polled in April were bullish, compared to just 33 per cent in March. As the chart below shows, that’s the steepest switch since last summer. Continue reading »
Can I nationalise you?
For a country with a fondness for nationalisations and getting its way, going to full arbitration might feel a little, well, odd. Bolivia has been placing companies under state control on and off since May 2006.
So how did UK-based power company Rurelec manage to get Bolivia to go to the Permanent Court of Arbitration in The Hague over the nationalisation of the assets of its local subsidiary, Guaracachi, almost three years ago? Continue reading »
Jim O’Neill, retiring chairman of Goldman Sachs Asset Management and author of the “Bric” acronym, has no idea what he will do after he clears out his office on London’s Fleet Street in a few weeks.
The candid Mr O’Neill, a Mancunian to his core, mulls the question as if to put the matter to rest. Continue reading »
Reverse the recent protectionist trend, invest more in infrastructure, improve the quality of policy-making, cut energy subsidies. Even the World Bank admits that it’s starting to sound like a broken record in Indonesia, according to Jim Brumby, its lead country economist.
But, while concerns about complacency undermining Indonesia’s economic boom are not new, the World Bank believes the risks to growth are getting greater. Continue reading »
Is Ashmore running out of road? The emerging markets fund manager, which on Thursday posted a 7.4 per cent drop in interim pre-tax profits, says not. But investors aren’t so sure. The shares dipped 1 per cent the news, which is nothing given the general flight out of EMs on the day.
But after doubling in 2009-10, in the recovery from the 2008 crisis, Ashmore shares have gained very little in the past two years. Clearly, investors need to be convinced that the group can find new ways of profiting from EM in the face of growing low-cost competition from index-tracking rivals. Continue reading »
Last September, the Indian government unveiled a reform agenda designed to build investor confidence. Foreign institutional investors have sent Indian stocks soaring in response.
But it seems private equity investors are more difficult to convince. Continue reading »
In recent years, commentators have cited the strong yen and anaemic domestic growth as key drivers of surging investment by Japanese companies in southeast Asia.
With the yen having weakened by over 10 per cent against the dollar since prime minister Shinzo Abe was elected in December with a mandate to re-inflate the moribund Japanese economy, will the tide of Japanese investment into Indonesia, Myanmar, Thailand and Vietnam recede? Continue reading »
China consumes 43 per cent of the world’s instant noodles, runs 61 per cent of its toll roads and produces 90 per cent of its PCs. But with 19 per cent of the global population, its share of health spending is only 6 per cent.
These and other fascinating facts are collated in a Bank of America Merrill Lynch report out this week. And behind the gee-whiz numbers, there’s a serious purpose: to see how China might change over the next decade or so. Continue reading »
To the lengthening list of foreign companies beating a path to Myanmar, add at least two more: Wilmar, one of Asia’s largest agribusinesses, and Cargill, the commodities’ trader.
Wilmar, a Singapore-listed group and the world’s largest processor of palm oil by volume, told beyondbrics it planned to make “significant investments” focusing on rice, fertilisers, sugar and vegetable oil. Cargill told beyondbrics it was “exploring opportunities” in the southeast Asian country for importing and exporting food and livestock feed.
Continue reading »
By Leif Eskesen of HSBC Global Research
China’s spectacular economic rise has had profound implications for the global economy and brought significant benefits to neighbouring countries, including the Asean-5: Indonesia, Malaysia, the Philippines, Thailand and Vietnam. However, China has also gained from their economic climb. These two-way benefits have come from surging trade, investment and tourism flows in both directions. Continue reading »
Well, they thought it was going to be bad. But not this bad. Consumer price inflation in Brazil was 0.88 per cent in the month to mid-January and 6.02 per cent over the previous 12 months, the IBGE, the national statistics institute, said on Wednesday.
On Monday, the central bank’s weekly survey of market economists showed inflation expectations were creeping up: the consensus for January had risen to 0.81 per cent from 0.78 per cent a week earlier. But Wednesday’s figure was off the chart. Continue reading »
Worried about capital flight from Russia? Don’t be, says Renaissance Capital. Net outflows, the bane of the Russian economy for years, are dropping, and could turn into a (small) net surplus for 2013, given improving prospects for the global and Russian economy.
Fair enough. But that will still leave Russia far adrift of other emerging markets in terms of attracting foreign money. Investors will want to see radical shifts in the economic plans of the new Putin presidency before they even consider a rethink. Continue reading »
The New Year rally in global markets has been matched by a strong surge of money into funds, including emerging market equity and bond funds.
EM equity fund inflows in the week to Wednesday more than doubled to $7.4bn, according to data from EPFR, the funds research company, cited by banks. EM bond inflows hit $2bn, more than 50 per cent up on the previous week. Investors are clearly enjoying risk-off – while it lasts. Continue reading »
Even by the standards of the region, 2012 was a turbulent year for the Middle East and North Africa, with wars, uprisings and messy post-revolutionary transitions to contend with. Despite this, it was the best year since 2008 for mergers and acquisitions, with deal value growing by 33 per cent over the year according to S&P Capital IQ. Continue reading »
Surprise, surprise. When it comes to words and actions of big companies, yet again we find that rhetoric belies reality – this time courtesy of The Economist Corporate Network.
The Economist group’s emerging markets advisory arm compiles an annual survey of leading corporate executives on their attitudes and investment patterns in Asia. In its report, Investing in an Accelerating Asia?, the group found that investment in Asia by global multinational corporations is lagging the expectations, forecasts and optimism voiced by their top executives. Continue reading »