EM hard currency bonds: new highs

August 9, 2012 11:53 am by Pan Kwan Yuk

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Few asset classes have benefited more from this year’s market turmoil than emerging markets hard currency debt.

With yields on US and UK bonds hovering near zero and Germany’s 2-year paper offering negative yield, investors on the hunt for better returns have piled into the asset class with gusto.

In the first seven months of this year, investors put a record $18.8bn into funds dedicated to EM hard currency bonds, according to EPFR Global, a data provider. This shatters the previous high of $14.79bn received for the whole of 2010. Continue reading »

Mrs Watanabe finds new lover in Turkey

July 31, 2012 1:27 am by Pan Kwan Yuk

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Mrs Watanabe is back. The fabled Japanese housewife investor, burned by her love affair with the Brazilian real, appeared to have rediscovered a taste for the carry trade.

The object of her affection this time? The Turkish lira.

The appetite for Turkish and lira-linked assets from yield-hungry Japanese retail investors has grown by leaps and bounds since the start of the year. From just $136m in 2010, lira-denominated Uridashi bond issuance – as foreign-currency debt sold to Japanese retail investors is called – reached nearly $2bn in the first six months of this year. Continue reading »

Tags: carry trade, currencies, Japan-EM, Mrs Watanabe, Turkish lira, yen-lira Posted in Europe, Turkey | Permalink

Apple in China: less froth but still pretty darn impressive

July 24, 2012 11:36 pm by Pan Kwan Yuk

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What goes up must come down.

And in the case of Apple, after two tremendous quarters of sales growth in China, news that Q3 sales there suffered a sharp quarter-on-quarter slowdown should not come as a complete shock to investors. Continue reading »

Tags: Apple Posted in Asia, China | Permalink

China: not lovin’ McDonald’s quite as much

July 24, 2012 12:50 am by Pan Kwan Yuk

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Among the more glaring details in McDonald’s weaker-than-expected second-quarter results on Monday is the performance of its Asia-Pacific, Middle East and Africa division.

After seeing revenue from the division jump 18 per cent last year and 5.5 per cent in the first quarter, demand from these markets has ground to a screeching halt and was nearly flat for the three months to the end of June.

Like-for-like sales increased just 0.9 per cent, operating margins fell 170 basis points to 15.3 per cent and operating income dropped 2 per cent (although they increased 1 per cent on a constant currency basis). Continue reading »

Tags: China consumer, China fast food, fast food, food & drink Posted in Asia, China | Permalink

Mexico v Brazil: stock market edition

July 17, 2012 9:43 pm by Pan Kwan Yuk

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For all of you out there who can’t get enough of the Mexico versus Brazil debate, here’s something else to chew over: the diverging fortunes of the countries’ two stock markets.

Mexico’s benchmark IPC index on Tuesday hit a record high for the third consecutive session while Brazil’s Bovespa continues to languish, having dropped 27 per cent since mid-March. Continue reading »

Tags: Bolsa, Bovespa, Brazil economy, Brazil equities, Brazil-Mexico, IPC, Mexico economy, Mexico equities, stock market Posted in Brazil, LatAm, Mexico | Permalink

Accor: bye US, hola South America

July 17, 2012 1:30 am by Pan Kwan Yuk

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Accor on Monday gave its clearest signal yet that it sees its future in emerging markets by snapping up the South American hotel portfolio of Mexico’s Grupo Posadas for $275m.

The move comes less than two months after the French hotel group sold its underperforming Motel 6 chain of US budget hotels to Blackstone in a $1.9bn deal and will see Accor join rivals such as Hilton, Starwood, InterContinental Hotels Group (IHG) and Marriott in the race for EM hotel assets. Continue reading »

Tags: Accor, hotels, IHG, Marriott, tourism Posted in Argentina, Brazil, Chile, Colombia, LatAm, Mexico, Panama, Peru | Permalink

China slowdown and LatAm: who’s exposed?

July 13, 2012 1:32 am by Pan Kwan Yuk

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By Pan Kwan Yuk and Humay Guliyeva

In a couple of hours China will release second-quarter GDP figures and the numbers are likely to reinforce the view that the Chinese economy is slowing faster than the government would like.

A good time then for beyondbrics to take a closer look at the potential impact that a slowdown in China could have on Latin America – a continent that has vastly benefited from the Middle Kingdom’s dizzying pace of growth in recent years. Continue reading »

Tags: China-Latin America Posted in Argentina, Asia, Brazil, Chile, China, Colombia, LatAm, Mexico, Peru | Permalink

China slows, will the luxury goods sector follow?

July 12, 2012 1:07 am by Pan Kwan Yuk

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Has China’s economic slowdown finally caught up with the luxury sector?

It is a question that high-end goods retailers must be asking after Burberry on Wednesday reported weaker than expected first-quarter growth. The news, which pushed shares in the British fashion house down 7.4 per cent to a 6-month low, cast a pall over the wider luxury goods sector. Financiere Richemont, the Swiss maker of Cartier jewelry, fell 3.4 per cent and France’s LVMH Moet Hennessy Louis Vuitton dropped 3.2 per cent while PPR, owner of the Gucci brand, lost 3.5 per cent.

Yet there are many reasons to think the sell-off might be overdone. Continue reading »

Tags: Burberry, luxury Posted in Asia, China | Permalink

Why can’t NY be a RMB hub as well?

July 11, 2012 4:45 am by Pan Kwan Yuk

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From Hong Kong to Singapore to London, the world’s financial centres are climbing over each other to win China’s backing to become an offshore renminbi trading hub. Yet one city has been conspicuously absent from the dash for Rmb-denominated business.

Given that the US is China’s single largest market – taking in some $324.5bn worth of goods last year – New York would seem the natural target for Beijing’s push for greater use of the Rmb as a currency for trade settlement. So why has New York lagged so far behind its peers when it comes to courting Rmb denominated business? Continue reading »

Tags: China-US, renminbi, RMB internationalisation Posted in Asia, China | Permalink

Ecuador: going from bad to worse?

July 7, 2012 12:55 am by Pan Kwan Yuk

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It’s been a week to forget for Ecuador. On Monday, the Andean country startled investors by posting its weakest quarterly growth in two years. Concerns that falling oil prices could cause the country’s current account deficit to widen to unsustainable levels have prompted at least one analyst to speculate that President Rafael Correa might need to turn to China for help in avoiding a liquidity crisis.

On Thursday, Ecuador went cap in hand – not to China – but to the Latin American Reserve Fund, the Bogotá-based regional lender for a $514.6m loan. Continue reading »

Tags: China-Ecuador, China-Latin America, Ecuador economy, oil economy, oil prices Posted in Ecuador, LatAm | Permalink

BlackRock makes Colombia push

July 6, 2012 7:56 pm by Pan Kwan Yuk

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Pension calling

Colombia is not a country that figures high on the radar screen of most global firms when it comes to the asset management business. The country’s pension funds, with $66bn in assets under management, are tiny compared to the $311bn in the regional powerhouse that is Brazil.

But small can be beautiful. Just ask BlackRock. The world’s biggest money manager by assets is setting up shop in Colombia following the unexpected – but significant – success of a local exchange traded fund (ETF) it launched last year. Continue reading »

Tags: BlackRock, ETFs, Latam, pension funds Posted in Colombia, LatAm | Permalink

AB Inbev-Modelo: a deal worth $20bn?

June 30, 2012 1:02 am by Pan Kwan Yuk

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How much would you pay to secure access to one of the world’s most lucrative beer markets?

$20.1bn if you are Anheuser-Busch InBev and if the market in question is Mexico. On Friday, the Belgian-Brazilian company, the world’s largest brewer, agreed to buy the 50 per cent of Grupo Modelo, maker of Corona beer, that it does not already own.

So how do the numbers stack up? Continue reading »

Tags: AB InBev, beer, food & drink Posted in LatAm, Mexico | Permalink

Colombia: hitting a brick wall?

June 21, 2012 11:30 pm by Pan Kwan Yuk

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One swallow does not a summer make; nor is a single month of poor economic data much of an indicator of a country’s medium term growth prospects.

Even so, Thursday’s disappointing industrial production and retail sales figures for April from Colombia must give pause to investors. Especially once you throw in the Q1 GDP number – also out on Thursday – which showed that growth in the economy is decelerating. Continue reading »

Tags: Colombia economy, GDP Posted in Colombia, LatAm | Permalink

Starbucks in LatAm: selling ice to Eskimos?

June 21, 2012 8:00 pm by Pan Kwan Yuk

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An American company trying to sell coffee to Latin America sounds like somebody selling ice to Eskimos or taking coal to Newcastle. Not least because the region produces most of the beans consumed worldwide.

Yet that is exactly what Starbucks is looking to do. This week, the Seattle-based coffee chain announced plans to ramp up its expansion in LatAm. The group said it wants to open ”several hundred” stores in Brazil in the next five years, to add to the 38 it currently owns, and open more than 300 new stores in Argentina and Mexico by 2015.

But will the region’s caffeine seekers bite? Continue reading »

Tags: coffee, food & drink, Starbucks Posted in Argentina, Brazil, Global, LatAm, Mexico | Permalink

Should Greece be reclassified as an emerging market?

June 21, 2012 12:56 am by Pan Kwan Yuk

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After all the dust has settled and the surprise over MSCI’s decision to put Greece on review for a possible demotion to emerging markets status has worn off, beyondbrics can’t help but wonder: what took MSCI so long? Continue reading »

Tags: emerging markets, eurozone crisis, Greece, grexit, MSCI Posted in Europe, Global | Permalink

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