Emerging bond issuance and inflows have had a strong start to the year but can it last?
What a difference a few months have made for Indian markets.
The rupee is 8 percent up from last summer’s record lows. Foreigners have ploughed $17 billion into Indian stocks and bonds since Sept 2012 and foreign ownership of Indian shares is at a record high 22.7 percent, Morgan Stanley reckons. And all it has taken to change the mood has been the announcement of a few reforms (allowing foreign direct investment into retail, some fuel and rail price hikes and raising FDI limits in some sectors). A controversial double taxation law has been pushed back. The government has sold some stakes in state-run companies (it offloaded 10 percent of Oil India last week, netting $585 million). If the measures continue, the central bank may cut interest rates further.
By Dasha Afanasieva
Europe is a likely suitor for much of the $560 billion in outbound foreign direct investment China plans to make in the five years leading to 2015, according to a survey out today.
Does the money match the story?
Perhaps the biggest investment theme of the year so far has been the extent to which long-term investors may now slowly migrate back to under-owned and under-priced equities from super-expensive safe haven bunkers such as ‘core’ government bonds, yen, Swiss francs etc to which they herded at each new gale of the 5-year-old credit storm.
There’s not too much one can do when a government minister marches into your office and essentially tells you to get lost. On April 16, 2012, the normal Monday morning routines unfolded with greater tension in the Buenos Aires offices of Spanish energy company Repsol’s YPF subsidiary. As top planning executive Carlos Jiminez and his colleagues were watching President Christina Fernandez unveil plans to seize control of YPF and nationalize Argentina’s leading energy producer, the unthinkable happened.
The issue of the falling yen is focusing many minds these days, nowhere more than in South Korea where exporters of goods such as cars and electronics often compete closely with their Japanese counterparts. These companies got a powerful reminder today of the danger in which they stand — quarterly profits from Hyundai fell sharply in the last quarter of 2012. (See here to read what we wrote about this topic last week)