My ESADE MBA

The Emerging Markets Club of ESADE, of which I am a member, has decided to develop a bi-weekly newsletter about Emerging Markets. These are the latest news about the market and if you wish to subscribe drop me an email and I will add you to the list.

Emerging Markets

EM Bonds strong – The emerging markets seem to be first economies to recover from the Financial Crisis as investors are buying an increasing amount of bonds issued by the emerging markets. The capital diversion to the EM is not only significant but clearly indicates where the economic future lies. Seeking Alpha

Latin America

Brazil - Petrobras issued USD 4bn in bonds, the largest issuance since 2000. Brazil’s economy seems strong and attractive despite the new tax on capital inflows. Marketwatch

Argentina spreads improve, Mexican peso falls Reuters

Argentina – Argentina’s Swap May Easily Succeed Investor Says.  Argentina’s offer to swap $20 billion of bonds that were held out of a 2005 restructuring will probably be accepted by investors who own most of the debt, Stone Harbor Investment Partners and Aberdeen Asset Management Plc said. Bloomberg

Uruguay – Leftist and Ex-President Head for Uruguay vote run-off. Former left-wing guerrilla fighter Jose Mujica led Uruguay’s presidential election on Sunday but was headed for a run-off against a conservative rival to steer one of Latin America’s most stable economies. NY Times

Mexico – Heineken’s Debt Poses Hurdle to Femsa Deal. Mexican Beer Business Offers Dutch Company a Much Needed Chance to Reduce Dependence on Europe, U.S. WSJ

Asia Pacific

East Asia Conference (EAC) – The East Asian nations are gaining in confidence, which was clearly illustrated during the conference in Bangkok. Topics included a common Asian currency as early as by 2015 to counteract the dependence of the falling USD, decreasing ties with Western economies and some even suggested to adopt new economic models specific for Asia. The dispute between the superpowers India and China however did not go unmentioned and India insists on its influence. Bernama – Asian economic model Stuff News – single currency, Xinhuanet on EAC, Reuters – decrease Western ties, Hindu – India’s ASEAN role

China-India conflict – During the East Asia Conference India and China were faced with some serious discussions about the poliitical relations as the border disputes, the relationships to the Tibetan leader Dalai Lama and the potential river diversion of the Brahmaputra away from India have reached unprecedented scale. Guardian

China – The pegging of the Chinese Yuan to the US dollar harms the export for China’s neighbouring countries. The devaluation of the USD and inheritently of the Yuan make China’s export products artificially cheap and therefore East Asian countries are pressuring China to revalue its currency. WSJ LiveMint

Best Financial Centers - The World Economic Forum ranked Britain, Singapore, Hong Kong, Australia and US as the best financial centers of the world. The article elaborates and highlights the pros and cons of each financial center. It is noteworthy that 3 of the 5 center are located in Asia Pacific! Wealth Bulletin

Singapore – Want to work and live in Singapore? Check out this website that provides you all the information you need about Singapore. Contact Singapore

Africa

SA farmers to rent land in Congo - The Republic of Congo has signed an agreement to lease 200,000 hectares of land to South African farmers. BBC

Rand Gain Erodes South Africa Profits, Hurting Stocks -The South African rand’s 28 percent rally against the dollar this year is eroding export earnings, slowing the economic recovery and making the nation’s equities the least attractive in emerging markets, Morgan Stanley says. Bloomberg

Nestlé Under Pressure to Renew Commercial Ties With Mugabes -International food giant Nestlé has this week come under growing pressure from groups loyal to Robert Mugabe and his family, to renew its recently severed commercial ties with the First Family. All Africa

Etisalat Invests U.S.$2 Billion in Network Expansion – Telecommunications giant, Etisalat, said it has spent over $2 billion on network expansion in Nigeria in the last one year. This is coming even as the United Arab Emirate GSM operator records over two million active subscribers in Nigeria within one year of its roll out in the country. All Africa

Zimbabwe – Privatization Opens Massive Infrastructure Opportunities. Zimbabwe plans to rehabilitate and expand existing infrastructure to support the envisioned economic growth. The government has developed a framework for the recapitalization of major public entities – a process that is opening up lucrative investment opportunities. All Africa

Kenyans to Buy Air, Bus Tickets Through M-Pesa - Listed telecoms operator, Safaricom, has integrated its M-Pesa money transfer service and data platform to enable users book and pay for their domestic air, road and rail travel through their data-enabled mobile phones. All Africa

This newsletter was sent by the ESADE Emerging Market Club.