Reuters blog archive
from Global Investing:
Fund managers searching for yield are increasing exposure to frontier markets (FM) as a diversification from emerging markets (EM), as the latter have been offering negative relative returns since January, according to MSCI data.
Barings Asset Management said on Monday it plans to launch a frontier markets fund in coming weeks, with a projected 70 percent exposure to frontier markets such as Nigeria, Saudi Arabia, the UAE, Sri Lanka and Ukraine.
Emerging markets indices posted relative negative returns compared to developed and frontier markets in the first quarter, index compiler MSCI's 2013 quarterly survey showed. The main emerging benchmark returned a negative 2.14 percent for the quarter, with the BRIC index also posting a loss, though a better performance of Latin American markets offered some promising signs with a 0.48 percent increase.
Southeast Asia posted the top returns, with double-digit figures from the MSCI Philippines Index of 17.87 percent growth and Indonesia returning 13.19 percent. That was a stark contrast to the Brazil, Russia, India, China and Korean indices, which delivered negative Q1 results.
(Photo: An Orthodox priest holds up a box containing bones believed to be the relics of John the Baptist, in Sofia, November 12, 2010/Oleg Popov)
Bulgaria's main Orthodox cathedral is displaying jaw and arm bones and a tooth said to be relics of John the Baptist, in a move state officials hope will boost tourism to the Black Sea resort where they were found. Prominent politicians and simple believers flocked to the Alexander Nevsky Cathedral in Sofia to view the remains, which were found near the town of Sozopol in July and are on display in the Bulgarian capital through Sunday.
John the Baptist, a Christian saint also revered in Islam, announced the coming of Jesus and baptised him in the River Jordan. The Gospels say King Herod had John beheaded at the request of his stepdaughter Salome after she danced for him.
from Our Take on Your Take:
Boian Hristov has been a regular contributor to Your View for some time now but it's his pictures from the recent masquerade festival in Bulgaria that have struck me the most. Boian has managed to capture the individual stories within the festival and created compelling portraits of those involved by pulling them clear of the background. A selection of some of the best are below.
from Global News Journal:
As the new European Union executive prepares to debate fresh policy proposals which might unblock the stalemate over approving genetically modified crops for feed, processing or cultivation, there are few signs that Europe's fears over what some have termed "Frankenstein foods" are easing.
On Friday Bulgaria's ruling GERB party proposed a five-year moratorium on the production of genetically modified (GM) crops for scientific and commercial reasons following public outcry over a new legislation.
from Global News Journal:
Every five years, the European Parliament gets an opportunity to show its muscle as it quizzes candidates for the next European Commission, the powerful body that enforces EU laws.
But rather than a forensic examination of the 26 nominees -- the sort of in-the-spotlight inquisition the U.S. Senate puts presidential appointees through -- the European Parliament has a tendency just to go through the motions.
from The Great Debate UK:
- Anna Mudeva is a Reuters senior correspondent based in Sofia, Bulgaria. Her special report "In eastern Europe, people pine for socialism" looks at widespread disenchantment with capitalism in the region. -
Driving through the dense willow and poplar forests of Bulgaria's biggest Danube island of Persin on a sunny October afternoon, my throat grappled with a lump of horror and disbelief.
from Reuters Soccer Blog:
Bulgarian winger Martin Petrov's days with Manchester City may be coming to an end. Rigsby, as Petrov is known among City fans, has once again expressed his frustration to reporters back home about the lack of opportunities he is getting.
When Petrov joined Bulgarian giants CSKA Sofia they called him Hristo Stoichkov's successor as he was fast, greedy for the ball and produced a memorably angry look when ending up on the losing side.
If the IMF thinks it's time for Latvia to move away from its flat income tax, that must surely signal some kind of sea change among free-market conservatives.
Flat taxes have got the citizens of former Communist east European countries used to the idea of paying tax on income. But they have often not lived up to their billing for revenue generation or fairness. In hard times, the IMF's Anne-Marie Gulde concluded in Riga, social cohesion demands that the better-off make a bigger contribution to meeting the costs of the financial crisis.
Latvia was in the first wave of more than a dozen ex-communist European countries that have implemented a single rate of tax for personal earned income. The so-called "Baltic tigers" enjoyed among the highest growth rates in Europe in the last decade. But all three face a severe economic contraction due to the unwinding of massive balance of payments deficits caused by a cheap credit binge.
Now public spending cuts are reaching a political pain threshold, the IMF is keen to avoid past mistakes in Latin America and Asia by emphasising the need to preserve the social fabric.
The flat tax was seen as business-friendly and attracted foreign investment, while persuading wary citizens to start paying tax and businesses to go legal. Bulgaria's rate, at 10 percent, encouraged employers to stop paying wages in cash. In developed Western economies, calls for a flat tax have mostly been a euphemism for cutting impositions on the rich.
Supporters contend that a flat tax is simple and cheap to administer, discourages tax evasion and encourages employment. Opponents say it is regressive because it places an unfair burden on those in the middle (the poorest usually fall below a tax-free threshold).
Flat taxes in eastern Europe often exclude capital gains, taxed at a lower rate or not at all, along with dividends, inheritance and other income.
A 2006 study by three IMF economists (*) concluded that key arguments on both sides of the debate were not supported by the facts. In particular, the evidence that lowering taxes on the better-paid generates additional revenue, as theorised by U.S. economist Arthur Laffer, is inconclusive.
The authors found "no sign of Laffer-type behavioural responses generating revenue increases from the tax cut elements of these reforms".
It's too early to read the rites on the flat tax in eastern Europe, but the omens are not good. As the IMF researchers concluded: "The question is not so much whether more countries will adopt a flat tax as whether those that have will move away from it."
* The Flat Tax(es): Principles and Evidence, by Michael Keen, Yitae Kim and Ricardo Varsano, IMF Working Paper, 2006 http://www.imf.org/external/pubs/ft/wp/2006/wp06218.pdf
Latvia's currency peg to the euro has become a punchbag for economists convinced that the Baltic state is inflicting unnecessary pain on its citizens. But devaluation of the lat risks mass defaults by citizens and companies. Four-fifths of private loans are in euros, and large-scale default would cripple the banking system. The Swedish banks that have lent billions of euros in Latvia would also be vulnerable.
Latvian devaluation would unleash a chain reaction around the Baltic and beyond. Lithuania and Estonia would face huge pressure to follow, and the knock-on effect could hit Bulgaria, which also has a currency board, and put pressure on other central European currencies. Devaluation would wreck any early prospect of Latvia joining the euro zone, which the former Soviet republic sees as a safe haven of financial stability and political independence.
from Reuters Soccer Blog:
When Savo Milosevic joined Partizan Belgrade from little known Bosnian outfit Radnik Bijeljina as a 19-year old in 1992, few people imagined he would become the most capped Yugoslav player with 101 international appearances to his name.
Later this month, Milosevic will draw a curtain on his international career when Serbia entertain neighbours Bulgaria in a friendly in Belgrade. Ironically, it will be his only appearance for Serbia as he has not played for his country since it became an independent nation after the 2006 World Cup.