Emerging Markets

Emerging markets can mostly dodge Fed bullet

13 Jun 2018

U.S. central-bank tightening has a history of causing global turmoil, as in the 1980s Latin debt crisis. But developing countries can largely handle a rate hike, with flush reserves and reduced dollar-based debt. Troubles in Argentina and Turkey are essentially home-brewed.

Toyota plots yet another jittery ride-hail route

13 Jun 2018

The Japanese carmaker is investing $1 bln into Asian startup Grab. It’s the latest in a slew of deals that mostly reflect manufacturer fears about where things are headed in autonomous driving and beyond. As GM’s fading Lyft alliance shows, though, the path is far from clear.

China will tightly control even looser capital

13 Jun 2018

Money is moving more freely in and out of the country as fears that sparked a 2015 clampdown wane. Greater sums can be invested abroad while daily limits from Hong Kong to mainland markets quadrupled to $8 bln. Official signals suggest, however, that the easing will be tortuous.

Viewsroom: Are tech investors lemmings?

7 Jun 2018

Despite Facebook’s mounting problems, only a third of independent shareholders refused to reelect Mark Zuckerberg and Sheryl Sandberg to the board. Tesla and Netflix owners tend to follow the leader, too. Yet protest votes are useful. Plus: Chinese stocks make it into the MSCI.

Walmart throws its BRICs into one basket

4 Jun 2018

The retailer is taking a $4.5 bln hit to sell most of its Brazil unit to private-equity firm Advent. As with its China - and UK - retreat, Walmart will at least get some benefit if fortunes improve. But it leaves CEO Doug McMillon’s shop even more dependent on India’s Flipkart.

Hadas: Market complacency curses debtor countries

31 May 2018

President Erdogan is wrong to claim a sinister “interest rate lobby” has aggravated Turkey’s structural weaknesses. Foolish foreigners have, however, financed unsustainable consumption binges in this and other economies. Remedies range from regulatory nudges to capital controls.

Indian growth spurt could prove fleeting

31 May 2018

The economy outpaced China by growing 7.7 pct in the three months to March. The fastest annual rate of growth since New Delhi scrapped high-value bank notes in 2016 is unlikely to last. Higher oil prices are bad for the current account. And more inflation will force a rate hike.

Indonesia’s pre-emptive strike sends right signal

30 May 2018

Southeast Asia's largest economy has raised rates for the second time in two weeks. It sends a clear message that the new central bank governor Perry Warjiyo will put a steady currency first. Much of the 25-basis-point hike has been priced in, but timing and tone should reassure.

Indonesia picks market stability over growth

17 May 2018

Agus Martowardojo is ending his term as central bank governor the same way he began: with a rate hike. The falling rupiah forced him to move earlier than planned. Southeast Asia's largest economy will splutter as a result, but delaying action would have had graver consequences.

Walmart could be spreading itself too thin

16 May 2018

The $250 bln retailer is paying $16 bln for most of India’s Flipkart, its biggest buy yet, even as it exits other overseas forays. Boss Doug McMillon is also up against Amazon on his home e-commerce turf – and he’s promising to keep on buying back shares. It’s a lot to juggle.

Emerging markets split into haves and have-nots

8 May 2018

A stronger dollar and higher U.S. bond yields have hit Argentina, Indonesia and Turkey especially hard. But others like the Philippines are in sounder economic shape. Buoyant oil prices create winners as well as losers. For investors, discrimination is the better part of valour.

Nigeria’s FX reserve fetish is bad for growth

30 Apr 2018

President Muhammadu Buhari is vaunting a rapid rise in foreign exchange reserves. A decent war chest is worth having in case the naira needs defending. But accumulating a vast pile of dollars will deprive the economy of the hard currency it needs to keep growing and create jobs.

Xiaomi puts collective spin on tech IPO vows

25 Apr 2018

The Chinese firm says if net margins on its phones and gadgets ever top 5 pct, users will keep the spoils. Ahead of an IPO at a mooted value of up to $100 bln, this is a stunt worthy of Silicon Valley. It tells investors to focus on apps, and consumers that Xiaomi has their back.

China’s surprise reserve cut exposes growth angst

17 Apr 2018

The central bank cut reserve requirements for banks, freeing $200 bln for lending. That backs up other moves to help over-stretched banks amidst a purge on loose credit. The timing, however, suggests Beijing is looking for a cushion if the economy slows, or a trade war escalates.

Zambia debt dispute undermines African credit

17 Apr 2018

The copper producer has denied it has dollar debt beyond its $8.7 bln of foreign borrowing. Its vague clarification comes two years after a $3 bln bond scandal in neighbouring Mozambique. Bilateral lending, particularly from China, is blurring the credit picture across Africa.

Index inclusion promises Saudi a pre-Aramco bump

29 Mar 2018

FTSE Russell will add the kingdom to global and emerging-markets indexes. MSCI is likely to follow suit, which could steer billions in index funds to the Riyadh exchange. That will make the Saudi market more international even if Aramco’s privatization stays local – or on hold.

Boeing tries market route to competing with Airbus

6 Feb 2018

The $200 bln U.S. giant may buy up to 90 pct of Embraer’s commercial-aircraft business. That would give Boeing effective control while leaving sensitive military hardware in Brazilian hands. It’s a better answer to the Airbus-Bombardier threat than pushing for trade tariffs.

Bill Gates and buyout baron create negative impact

5 Feb 2018

The billionaire’s Gates Foundation is at odds with Abraaj, a buyout group, over a $1 bln fund to provide healthcare in emerging markets. The dispute underscores the tension in combining charitable and financial goals. The fallout will only fuel skepticism of impact investing.

Indonesia can close gap with tiger cub neighbours

23 Nov 2017

Stellar growth in Singapore, Vietnam and elsewhere means Indonesia is the laggard in a booming region. President Joko Widodo could do more to catch up, moving faster to upgrade infrastructure. Reassuring foreign firms by solving an ugly mining dispute would help too.

Asian energy deal defies green resistance

26 Oct 2017

The $5 bln sale of Equis solar and wind projects in Australia, Japan and beyond to a global fund group sets a new benchmark. As clean projects expand, they'll attract oil titans, too. Donald Trump and Malcolm Turnbull may discount renewables, but investors are inflating them.