Emerging Markets

Warning: emerging economies can go backwards, too

3 May 2012

Bolivia has followed Argentina in the pointless nationalisation of Spanish-owned assets. Argentina is fiddling with its central bank, as Hungary tried to. The obstacles to growth in emerging economies can be large. Investors should beware. Emerging economies can go down as well as up.

Cuba unveils a Hugo Chavez hedge: economic reform

24 Apr 2012

With the island’s last rich patron battling cancer, Raul Castro may finally see the writing on the wall. If he can reduce the state’s role in the economy and relax restrictions on capitalist activities, Cuba’s future won’t be North Korea or even Vietnam - but rather Turkey.

Growth gap puts IMF in endless campaign mode

23 Apr 2012

The BRICs are already clamoring for more sway at the IMF - even before previous boosts in voting strength are finalized. With developing nations forecast to grow twice as fast as rich rivals in the next five years, haggling over heft will be a permanent feature of IMF meetings.

New bank plan risks dilution of emerging influence

30 Mar 2012

The BRICS are mulling the creation of an institution with aims similar to the World Bank. But an Emerging World Bank may diffuse the effort, capital, and talent dedicated to global economic development. BRICS may also struggle to secure their rightful influence over the original.

StanChart doesn’t justify premium over HSBC

29 Feb 2012

Both emerging market lenders had a strong 2011, in different ways. StanChart is growing while HSBC restructures. But StanChart is relatively bigger in troubled India and Korea, while hiring has become expensive. Takeover hopes aside, the valuation gap is hard to justify.

Hugo Dixon: EU shouldn’t rely on bailout from ROW

23 Jan 2012

The IMF is asking for another $600 billion to help deal with the euro crisis. But the euro zone, which is vastly richer than most of the rest of the world, should find the money to solve its own problems. It’s the developing world that may need help if the euro blows up.

BRICs raise relegation risk for European soccer

30 Dec 2011

World power must be shifting. Samuel Eto’o, a Cameroonian soccer star who used to play for Barcelona, has gone to Russia while Nicolas Anelka, a Frenchman, is moving from Chelsea to China. But both players are over 30. Europe, not the BRICs, still has first call on young talent.

BRIC success shows the power of a good idea

28 Nov 2011

Goldman’s Jim O’Neill invented the acronym for the leading emerging markets 10 years ago. What started as a good economic theme became a state of mind – the embodiment of a global power shift. So far, so good, but at least one BRIC is likely to disappoint in the next decade.

Russian delay adds to Polyus UK listing concerns

28 Oct 2011

A regulatory delay to the gold miner’s London listing may have political motives. The timing is suggestive, coming after public outbursts by owner Mikhail Prokhorov. The setback underlines risks that make it unwise for London to waive its rules for Russian companies.

SAB’s $1.9 bln Turkish tie-up has double benefit

19 Oct 2011

The UK-listed brewer is swapping its Russian unit for a 24 percent stake in Turkey’s Efes. Though Russia is challenging for brewers, the combined business will have a broader base. And SAB is now in pole position if the families behind Turkey’s dominant beer-maker ever sell up.

Currency crossfire to hit emerging economies hard

29 Sep 2011

Money is flowing out of emerging economies. Countries that had complained about currency appreciation have had to prop up forex rates. Turkey and South Korea are vulnerable to hot money retreat. Poland and Hungary are caught in currency traps.

Putin’s third term undermined by Kudrin’s exit

26 Sep 2011

Russia’s finance minister has dismayed investors by saying he doesn’t want to serve in the next cabinet. Pique at not getting the premier’s job may be to blame. But Kudrin’s decision also reflects policy tensions. Without him, it will be tougher to keep Russia’s finances steady.

Can the BRICs save the PIIGS?

21 Sep 2011

Brazil’s limited offer of $10 billion of support is pure posturing. But its idea to channel it through the IMF has merit. But why limit the effort to the BRICS? Other large holders of reserves - such as Japan and Saudi - should also join the club.

Market crash compounds Russia’s lack of appeal

30 Aug 2011

Russia’s stock market has been one of the biggest casualties of the global turmoil, again illustrating its extreme sensitivity to risk. Although investors should be poised for an eventual rebound, the latest crash underscores the diminishing allure of Russian stocks. 

Bank of Moscow’s debacle is profitable for some

2 Aug 2011

Russia’s $14 bln banking fiasco has proved costly for both the Russian state and its major shareholder, VTB Bank. But Vitaly Yusufov, the son of former Kremlin official Igor Yusufov, looks set to profit from the imbroglio. That raises questions about the handling of the affair.

Rajoy needs to tell Spain some home truths

1 Aug 2011

The country’s probable next PM shouldn’t wait until after November’s election to level with the Spanish people about the actions needed to avoid getting sucked into the euro zone crisis and to restore competitiveness. Here’s the speech he should give now.