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August 31, 2010 • 11:51 pm 1

BMV Mexican Stock Exchange Rebalancing of IPC and adustment of MSCI Country Index

The BMV Mexican Stock Exchange – IPC index will be rebalancing go into effect as of today’s ( Tuesday 31.08.2010) close.

The IPC names that will be added to the index are: ICHB, CHDRAUIB, LABB and ARCA. The names that will leave the index are: GFAMSA,AUTLAN and ASUR.

MSCI country Index will also rebalance and go into effect as of today’s ( Tuesday 31.08.2010) close.

Mexico is expected to be the market with the largest recipient of inflows. Among the names that will have the largest positive impact are: AMX and WALMEX, while ALFA is expected to have the largest negative impact (albeit marginal).

Source: IXE 31.08.2010

Filed under: BM&FBOVESPA, Exchanges, Latin America, Mexico, News, , , , , , , , ,

August 27, 2010 • 11:30 pm 0

Mexico: safer than Canada ? safer than Brazil!

K, so the headline is a bit of a fib. But a report on Mexico’s security situation has painted a more detailed picture than the one we hear about in the news most of the time. When I told friends I was moving to Mexico City, some asked if I would be provided with a bodyguard (no). Business travellers are thinking twice about coming, according to chambers of commerce here. But a detailed breakdown of violence released this week shows that, if you pick your state, you’re as safe—or safer—than in any other North American country.

Mexico’s overall homicide rate is 14 per 100,000 inhabitants: fearsomely high (and possibly an underestimate, given the drugs cartels’ habit of hiding bodies in old mines), but quite a lot lower than its great Latin rival Brazil, whose rate is more like 25. As the chart below shows, Mexico’s death rate is bumped up by extraordinarily high levels of violence in four states: Chihuahua (home of Ciudad Juárez, widely labelled the world’s most murderous city), Durango, Sinaloa and Guerrero (see p.29 of this document). Of the rest, some are blissfully serene: Yucatán, where tourists flock to swim with whale sharks and clamber over Chichen Itzá, has a murder rate of 1.7—slightly lower than Canada’s average of 2.1.

Read full article in the Economist

Before I am buried an avalanche of polite Canadian emails, I should acknowledge that comparing an entire country with one quiet state is hardly fair: there are no doubt parts of Canada where no-one has been so much as kicked in the shin for decades. But Mexico’s predicament is worth highlighting, because the extreme violence around its border with the United States colours people’s view of the rest of the country, though much of it is pretty quiet. A third of Mexico’s states hover around 5 murders per 100,000, about the same rate as the United States. Another third are around 8 per 100,000, similar to Thailand, for instance. A handful of states have rates in the teens—like Russia, say—and a couple are in the low twenties, a little lower than Brazil’s average. Then you have the chaos of the four very violent states, which sends the average soaring.

The carnage in Mexico’s badlands is not to be underestimated, and nor does it seem to be getting any better. Business travellers should certainly watch out in places such as Juárez and, these days, even in cities such as Monterrey. But people doing business south of the Rio Grande should remember that, even on average, Mexico is a less murderous country than places such as Brazil, and that once you avoid the hotspots, it’s downright safe.

Source: The Economist, 27.08.2010

Filed under: Brazil, Latin America, Mexico, News, Thailand, , , , , , , , ,

August 22, 2010 • 12:31 am 0

Brazil Macro August 2010

According to the IPCA-15 index, inflation was -0.05%. The inflation deceleration process, which was initially characterized by a positive shock of food prices and the seasonal favorable behavior of clothing prices, has gradually become broader and longer than originally thought. The inflation outlook points to IPCA reacceleration down the road, but low current inflation is postponing this scenario. In all, the Selic rate is likely to be maintained stable in the next COPOM meeting.

According to the IPCA-15 index, inflation was -0.05% in the 30 days ended in August,13th. Since the end of June, retail inflation, measured by the IPCA and the IPCA-15 indexes, has remained at a very low level, close to zero, and chances are that this will not change in the short term.

The diffusion index rose slightly to 52.9, from  48.7 in the end of July, showing that a larger percentage of items from the inflation basket has faced price increase. However, diffusion´s moving average is declining (see chart on the right), suggesting that inflation is likely to keep decelerating. Also, there is indeed a growing number of groups of goods or services posting deflation or declining inflation. For instance, according to August´s IPCA-15, food at home, furniture, home appliance, electronics, clothing, footwear, textiles, pharmaceuticals and communications posted deflation. Eating out of home, fuel and energy for housing, health services, personal care and recreation are posting significant lowering inflation.

In sum, the inflation deceleration process, which was initially characterized by a positive shock of food prices and the seasonal favorable behavior of clothing prices, has gradually become broader and longer than originally thought. As a result, 12-month core IPCA and services inflation have begun to drop, which is surprising because the level of capacity utilization is close to a record high, unemployment is at a record low, the aggregate wage bill is rising and there are signs of supply shortage in some sectors.

The inflation outlook points to IPCA reacceleration down the road, because of the underlying economic conditions, the fact that wholesale prices have increased, and the high probability that wage negotiations, scheduled for the following months, will lead to real wage increases above productivity gains. Nevertheless, low current inflation is postponing the IPCA reacceleration scenario and, to be fair, weakening it too, as it helps align inflation expectations with the inflation target. In all, August´s IPCA is likely to be around 0.1% and the monetary policy committee – Copom – seems poised to maintain the Selic rate stable in the next meeting, scheduled for September,1st.

Source: Banif – IXE, 20.08.2010 Mauro Schneider  – mschneider@banifib.com.br

Filed under: Brazil, Latin America, News, , , , , , , , , ,

August 21, 2010 • 11:56 pm 0

Brazil: BM&FBOVESPA Monthly News August 2010

BVMF NEWS – August 2010 Complete and Detailed Version

  • CVM authorizes BM&FBOVESPA to implement new DMA modalities in the Bovespa segment
  • New Fee Policy for High-Frequency Traders (HFT)
  • BM&FBOVESPA presents new financial education campaign
  • Itaú Unibanco S.A. is selected to manage the Financial ETF
  • Reduction in the round lot for ETFs to facilitate the access of individual investors
  • Deadline extended for approval of amendments to the listing rules for the special listing segments
  • On August 13th BM&FBOVESPA announced its 2010 second quarter earnings
  • MARKET RESULTS – BM&F Segment July 2010
  • MARKET RESULTS – BOVESPA Segment July 2010

Filed under: Exchanges, Latin America, Brazil, BM&FBOVESPA, , , , , , , , , , , , , , , ,

August 20, 2010 • 7:41 am 0

Latin America Commercial Real Estate and Lending – Webinar – August 26th

Taking into consideration the trials and tribulations regarding real estate over the past two years, Alternative Latin Investor thought it prudent to hold a round-table discussion of Latin America’s fairly insulated Commercial Real Estate market along with the complementary lending market.

In order to best explore these topics we have invited some of the top experts in the field: For full details regarding topics and speakers, please see: http://www.alternativelatininvestor.com/Webinar/CommercialRealEstate.pdf

Brazil  

Maximo Pinheiro Lima Netto – Managing Director at Prosperitas – the market leader in managing real estate private equity and debt funds. Prosperitas is currently responsible for 4 domestic real estate opportunity funds, with a current real estate operation of about 1.14 billion USD of assets under management.

Flavio Mantesso – Portfolio Management Director at Eccelera – an investment fund manager focused in the office real estate sector in Brazil and partner of one of Europe’s major investment houses. Flavio has also created a proprietary forecast model, which utilizes statistical regressions, monte-carlo simulations and other tools to better predict real estate market movements and investment returns.

Mexico

Michael K. Krause – Investment Director at Hines – a privately owned, international real estate firm with offices in over 17 countries and controls assets valued at approximately $22.9 billion.

Lawrence McDaniel – Chief Investment Officer at Axia Capital – a boutique investment and advisory firm headquartered in Mexico City specializing in Mexican affordable housing, leasing, and alternative consumer credit. Axia Capital is a principal investor in the Mexican private debt market, with emphasis on mortgages, leases and alternative consumer credit.

Peru

 Eric Rey De Castro -Managing Director at Colliers – a leading global real estate services organization with more than 480 offices worldwide.

Date: Thursday, August 26th, 1pm EST
Duration: 90min
Price: 89.00USD
Register at http://www.regonline.com/register/checkin.aspx?EventId=887913
Contact: Nate Suppaiah at nate@caprg.com or 202-905-0378

Filed under: Brazil, Events, Latin America, Mexico, Peru, Services, Wealth Management, , , , , , , , , , , , ,

August 19, 2010 • 9:06 pm 1

RTS Offers Access to New Trading Platform for Pan-Asian Market on Singapore Mercantile Exchange

SMX Launch Further Builds on RTS Low Latency Solutions in Asia

RTS Realtime Systems Group, a leading global trading solutions provider, announced today that the firm will provide connectivity and low latency access to the Singapore Mercantile Exchange (SMX) from its first day of trading, which will be 31 August 2010.

The new pan-Asian commodity and currency derivatives exchange will launch using a state-of-the-art global futures and options trading platform for products which include precious metals, base metals, agricultural commodities, energy, currencies and commodity indices.

Leveraging on its parent conglomerate Financial Technologies (India) Limited, who has designed and provided the end-to-end technology solution, the Exchange provides an application programming interface (API) to enable global independent software vendor (ISV) integration and thus facilitate a cross section of trading members, institutions and other financial market participants to trade on the Exchange. Members also have the option to write their own APIs for connectivity. Financial Technologies (India) Limited’s highly robust and scalable trading technology gives SMX the agility and adaptability which ensures its edge in the financial markets.

RTS recently announced the global launch of a first-of-its-kind trading solution combining the advantages of “point-and-click” and algorithmic trading. Called RTD Tango Trader, it is designed to leverage firms’ existing infrastructure and enable more brokers, traders and clients to benefit from customized algorithms. The firm’s high performance solutions are used by leading financial firms to trade across asset classes on 120+ exchanges and execution venues globally, including a wide range of major Asian exchanges.

Alex Lamb, RTS Executive Board Member, said: “We are pleased to offer access from day one to this truly pan-Asian commodity and currency derivatives exchange for our clients in the region and across the world, particularly given the tremendous interest they’ve already expressed in the opportunity. The breadth of products will create new avenues for arbitrage and effective risk management.”

Thomas J. McMahon, Chief Executive Officer of SMX, said: “As we look forward to attracting new product listings from around the world and Asia, we are very pleased to welcome trading firms globally who use the advanced technology and infrastructure of RTS which brings in a number of important algorithmic traders to SMX. Our global trading venue is well positioned to serve as a gateway for commodities in Asia, synchronizing derivatives and physical trading in commodities within the Asian time zone.”

Source: RTS, 19.08.2010

Filed under: Exchanges, News, Singapore, Trading Technology, , , , , , , , , , ,

August 18, 2010 • 9:14 pm 0

SMX To Go-Live On 31 August 2010

Singapore Mercantile Exchange (SMX), the first pan-Asian multi-product commodity and currency derivatives exchange, today announced that the Exchange will go live for trading on 31 August 2010.

With rapid economic expansion in the region and Asia’s demand for commodities, SMX is strongly positioned to offer an integrated and single-platform for multiple products. It has completed conformance testing with Independent Software Vendors (ISVs) and industry- wide testing with member firms prior to its impending launch.

Mr. Jignesh Shah, Vice Chairman of SMX and Group CEO of Financial Technologies Group, said, “SMX’s platform will herald Asia?s first stand-alone and next-generation global derivatives exchange for unrestricted cross-border trading in futures, options and other derivatives across multiple asset classes. We are looking forward to our newest venture to establish a footprint for transparent electronic trading that will manifest itself as a major platform for price discovery for commodities trading in Asia. SMX is well poised to unlock the immense potential of Asia and further position the region as a leading derivatives trading hub.”

Mr. Thomas J. McMahon, CEO of SMX, said, “We are witnessing Asia?s expanding influence on the global commodities market. SMX?s launch is a step in the right direction as we leverage off Singapore?s unique position as a premier financial and commercial hub in the region. The launch will provide market players in Asia the flexibility to trade products generic to regional trade flows within the Asian business day.”

The Monetary Authority of Singapore (MAS) recently granted SMX „Approved Exchange” status to operate as a regulated and fully licensed exchange.

The first phase of product launches will include a Gold Futures Contract with physical delivery in high-security vaults in Singapore, West Texas Intermediate (WTI) Crude Oil, Brent-Euro Crude Oil and Euro-US Dollar Futures Contracts, amongst others. The first phase of product launches will be followed by multiple product launches to be introduced in the market after consultation with industry participants.

Source, MondoVisione, 17.08.2010

Filed under: Exchanges, News, Singapore, , , , , , , , , ,

August 18, 2010 • 8:23 am 0

Chinese Gov’t urged to stop corn-based ethanol production

China’s industrial experts are advising the government to halt projects making ethanol bio-fuel with corn, as the projects are pushing up corn prices and sparking food security concerns. Zhao Youshan, director of the Commercial Petroleum Flow Committee (CPFC) under the China General Chamber of Commerce (CGCC), a national industrial organization, told Xinhua Tuesday he has informed the State Council, China’s Cabinet, of his views.

Zhao said livestock breeders in China are facing feed shortages as ethanol fuel makers- prompted by government subsidies of roughly 1,900 yuan (279 U.S. dollars) per tonne of ethanol they can produce – have rushed to buy corn. Makers of ethanol fuel also enjoy tax exemptions according to a policy approved by the government in 2004 designed to boost the bio-fuel industry’s development, Zhao said. The subsidies and preferential policies gave companies the incentive to buy corn, leading to price hikes and shortages of supply, he said. Higher corn prices at home also lead to more imports of the raw material.

Zhang Jianbo, a CGCC analyst, said China became a net importer of corn for the first time in the first half of the year. He said corn imports outweighed exports by 78 million tonnes. “The average corn price in July in northeastern China surged 15.7 percent year on year to 1,845 yuan per tonne,” Zhang said, adding that livestock breeders cannot afford the high prices.

“These projects pose a great risk for grain supply in China,” he added.  Zhao said China’s annual 10 million tonnes of ethanol fuel production could potentially consume 30 million tonnes of corn per year. In an interview with the Shanghai Securities Journal in July, Zhao said production costs for one tonne of ethanol range between 8,000 yuan and 9,000 yuan, adding the same amount of money could buy two tonnes of refined oil.

He suggested using other materials, such as cassava and wheat straw, to produce  ethanol. Zhao told Xinhua Tuesday in a telephone interview the proposal was presented to the State Council in June and is at present being reviewed by the National Development

and Reform Commission, China’s top economic planner.and Reform Commission, China’s top economic planner.

 

 

 

Source: CITIC Newedge, 11.08.2010 Mr. Liang Haisan

Filed under: China, Energy & Environment, News, Risk Management, , , , , , , ,

August 15, 2010 • 1:54 am 0

Online Stock Trading and Fraud have come a longway in the past 10 years

Online trading has definitely come a long way in the past decade.  Innovation and technology now allow you to follow and trade stocks from your phone or laptop, not to mention accessing advice and chart information at the same time.  However, our new online powers have lulled us into a false sense of security in today’s high paced electronic world.  The criminal element in our society is counting on that fact to ply their own online trade activity, that of deceiving you out of your hard earned cash.

Yes, the unscrupulous few among us had to spoil the fun for all investors.  Does $400 billion a year in securities related fraud losses get your attention?  The FBI believes it should, as does the SEC and CFTC.  The Internet has been the great enabler of our times, providing access to mountains of information and a dizzying array of applications to bring convenience to our hectic lives.  It also has brought anonymity, the cloak that hides the invisible swindler that may have tapped you as his next target of opportunity.

Does this mean that you should forgo buying an iPad and take a course in risk management instead?  Of course not!  Fraud mitigation starts and stops with you and your ability to be skeptical and use common sense.  Here are a few suggestions to help you avoid the most common pitfalls for the average investor:

Business Partners: Fraudulent brokers have stolen millions from investors.  Do your due diligence.  There are many review services for checking banks and choosing the best stockbroker or best forex broker.  Make sure your bank has a strong balance sheet, and that your broker is above board and onshore.  Consult your banker or broker for investment advice on every investment deal.

Warning Signs: Some signs, though obvious, need repeating.  Here are a few tell-tell signs:

  • Unsolicited offers should be questioned or avoided;
  • If it sounds too good to be true, it most likely is;
  • If there is little or no risk, then it isn’t for real;
  • If there is a sense of urgency, walk away;
  • Swindlers talk fast so you won’t ask questions;
  • If written explanations are not forthcoming, stop considering it;
  • If it sounds too complicated, don’t waste your time;
  • Con Artists always dress well to impress and deceive;
  • Ignore referrals from friends, until after doing your due diligence;
  • Be very skeptical when asked to send a check or wire funds.

Actual Scams Often Repeated:

The Ponzi Scheme: The swindler pays high returns from new client deposits to gain your trust and new referrals.  He takes what is left.  Bernie Madoff and Kenneth Starr are prime examples of the craft;

The “Pump-and-Dump”:  Mass communication of rumors is used to pump up a stock’s value.  The swindler unloads his shares at a huge profit only to leave unsuspecting Buyers holding the bag after the price plummets;

The “Tipster”:  The Tipster calls 100 people, passing along a “tip” to gain confidence.  He tells half that the stock will rise, and the other half that it will fall.  The next day, he now has 50 “marks” that believe.  He may continue his confidence game until he finally asks you for money.  Be sure to walk the other way.

Investment fraud generally happens to those people who never expect it or are easily tempted by greed.  Protect yourself by heeding these warning signs and being aware of the most typical scams that con artists love to use.

Source: FOREXFraud, 13.08.2010

Filed under: Banking, News, Risk Management, Wealth Management, , , , , , , , , , , ,

August 13, 2010 • 7:43 am 0

Tongling, CRCC to invest $3b in Ecuador copper mine

Tongling Nonferrous Metals Group Holdings Co and China Railway Construction Corp may invest as much as $3 billion in a copper project in Ecuador, as China seeks to control more commodity assets to feed its economy.   

Production at the Corriente Copper Belt may start in 2013, Hu Guobin, vice-president of a venture set up by the two Chinese companies for the project, said in an interview. Annual copper in concentrate output would start at 30,000 tons and double a year later, he said.

Chinese companies spent more than $30 billion last year buying oilfields and mines as two decades of economic growth averaging 10.1 percent made China the world’s biggest metal and energy consumer. Copper prices have doubled in the past five years, driven by demand in the third-largest economy. “The investment will significantly lift Tongling’s copper ore self-sufficiency and investors expect the assets to be injected into the listed unit later,” Heng Kun, an analyst at Essence Securities, said by phone.Tongling Nonferrous Metals Group Co rose 2.4 percent to close at 16.20 yuan at the 3 pm close in Shenzhen. China Railway rose 0.4 percent to HK$10.08 ($1.3) at the 4 pm close in Hong Kong. Tongling, China’s second-biggest copper producer, and China Railway Construction, the nation’s biggest railroad builder, in December agreed to buy Canada’s Corriente Resources Inc for C$679 million ($652 million) for the copper resources. The deal was completed and Corriente was delisted this month, according to a statement on Corriente’s website.

Chinese Demand

“All the ore will be shipped back to China” to meet demand, said Hu, who was nominated to the venture from Anhui- based Tongling. The copper producer will take delivery of half the ore, he said. Production in the long-term may reach 250,000 tons to 300,000 tons a year, Hu said. Tongling produced 44,000 tons of copper concentrate last year.

The rapid expansion of smelting capacity in China, the world’s biggest producer and consumer of copper metal, has increased ore demand and spurred companies to invest overseas. Larger rival Jiangxi Copper Co invested in copper mines in Peru and Afghanistan, and Zijin Mining Group Co is seeking copper and cobalt assets in the Republic of Congo.

The Corriente Copper Belt covers 17 deposits in the four main mining regions of Mirador, Mirador Norte, Panantza and San Carlos, China Railway said in December. Copper resources are about 11.54 million tons, based on initial studies, it said. Corriente was also involved in the exploration and development of gold, silver and molybdenum mines, according to the December statement.

Source: CITIC New Edge, 12.08.2010 Mr. Liang Haisan

Filed under: China, Energy & Environment, Latin America, News, , , , , , , ,

August 12, 2010 • 1:22 am 0

Black Rock Bob Doll: 10 pronósticos para los próximos 10 años

“10 perspectivas para los próximos 10 años”, en el que Robert C. Doll, Vicepresidente y Estratega en Jefe de Capitales para Capitales Fundamentales de BlackRock, Inc. (NYSE: BLK), da sus pronósticos sobre el ambiente para las inversiones en la próxima década.

  1. La renta variable de E.U. experimentará retornos totales porcentuales de un solo digito después de la peor década desde 1930
  2. Las recesiones ocurrirán más frecuentemente durante esta década, en vez de solamente una vez cada década, como ocurrió en los últimos 20 años.
  3. El sector salud, la tecnología de información y alternativas energéticas liderarán las áreas de crecimiento en E.U.
  4. El dólar estadounidense continuará siendo menos dominante según avance la década.
  5. Las tasas de interés se elevarán irregularmente en los países en vías de desarrollo.
  6. El interés del país derivará en más conflictos comerciales y políticos.
  7. Una población en vías de envejecimiento genera para Europa algunos de los problemas de Japón.
  8. El crecimiento mundial se deriva del consumo en los mercados emergentes.
  9. Los mercados emergentes influyen en el aumento de los índices globales significativamente.
  10. Continuará el ascenso económico y político de China.

leer el reporte completo de Bob Doll BlackRock 10 perspectivas para los próximos 10 años

Fuente: BlackRock/ CarralSierra 02.08.2010


Filed under: Asia, China, Energy & Environment, Exchanges, Japan, Latin America, Risk Management, , , , , , , , , , , , , ,

August 10, 2010 • 1:03 am 0

BlackRock Bob Dolls: 10 prediction for the next 10 years

“10 Predictions for the Next 10 Years” by BlackRock’s Bob Doll and what it means to investors:

  1. U.S. equities experience high single-digit percentage total returns after the worst decade since the 1930s.
  2. Recessions occur more frequently during this decade than only once a decade as occurred in the last 20 years.
  3. Healthcare, information technology and energy alternatives are leading growth areas for the U.S.
  4. The U.S. dollar continues to be less dominant as the decade progresses.
  5. Interest rates move irregularly higher in the developing world.
  6. Country self-interest leads to more trade and political conflicts.
  7. An aging and declining population gives Europe some of Japan’s problems.
  8. World growth is led by emerging market consumers.
  9. Emerging markets weighting in global indices rises significantly.
  10. China’s economic and political ascent continues.

Read Bob Doll’s full report  10 Predictions for the next Decade

Source:BlackRock / Carral Sierra, 02.08.2010

Filed under: Banking, Brazil, China, Energy & Environment, Japan, Korea, Mexico, News, Risk Management, Wealth Management, , , , , , , , , , , , , , , , , , , , , , ,

August 10, 2010 • 12:47 am 1

Mexico’s GBM Champions FIX Flyer’s Software for Electronic Trading

FIX Flyer, a leader in solutions for electronic trading, announced today that Grupo Bursatil Mexicano, one of the leading brokers in Mexico, uses both the Flyer Engine and Daytona Monitoring for their FIX messaging.

GBM uses Flyer’s tools for their client order flow as well as routing to exchanges in Mexico, Brazil and North America. GBM uses Daytona and the Flyer Engine to monitor and support FIX sessions with all of their counterparties in real-time. In addition, the combined solution lets GBM’s traders respond to their clients needs with dynamic trade busting, routing latency metrics, and real-time order chain management. By providing even higher levels of support for their customers, GBM is in a strong position to attract clients beyond Mexico.

FIX Flyer is also working closely with GBM to integrate with the Bolsa Mexicana de Valores’ new FIX offering. The Bolsa, the largest equities exchange in Mexico, will soon support orders from FIX connections and GBM’s relationship with Flyer has allowed them to respond quickly to this exiting new opportunity in the Mexican market.

“We have embraced the vision of electronic trading in order to provide the very best execution for our increasingly sophisticated clients,” said Enrique Rojas, Director of International Business Development at GBM in Mexico City. “We adopted FIX Flyer’s solution two years ago, and because of their solid reliability and superb performance we have been able to aggressively expand our algorithmic and low-latency trading programs for the direct benefit of our institutional clients around the globe.”

GBM chose FIX Flyer for the core FIX components since the solution is easy to support, scalable, and high-performance. In addition, GBM needed to ensure that the solution would give all of their client’s comfort that they can handle the potential of a dynamic and quickly emerging marketplace. Because of Flyer’s unmatched proficiency and experience as an overall FIX solution, GBM realized early in their evaluation process that Flyer extended their support and tools beyond the other conventional solutions. FIX Flyer works in some of the most demanding trading environments in the world, and that experience makes the product valuable to customers like GBM.

Source: A-TEAM 10.08.2010

Filed under: BMV - Mexico, FIX Connectivity, Latin America, Mexico, Trading Technology, , , , , , , , , , , , ,

August 9, 2010 • 12:16 am 0

VAM: Vietnam Market Analysis July/Agust 2010

Market Update - This month Fitch downgraded Vietnams debt rating to B+ with a stable outlook from BB- citing inconsistent government policy, low foreign exchange reserves and a weak banking system. The move came as a surprise to many commentators who looked at Vietnams ever improving macro condition as reason for optimism. We also share this opinion, as the move was somewhat unjustified and does not reflect the efforts of the government in stabilizing the macro environment and the countrys currently improving key macroeconomic indicators. VAM_Monthly_Newsletter_Jul_2010

In July, industrial production and retail sales were up 13.5% and 26.4% year on year respectively. Although year to date up 17.5% when comparing to the same period last year, export turnover this month declined 8.8% MoM as subdued European demand made its impact which contributed to Julys monthly trade deficit of $1.15bn or $7.4bn year to date, equivalent to 19.4% of export turnover. However, capital inflows can adequately compensate the deficit with FDI disbursement being recorded at $6.4bn year to date and overseas remittances showing an increase of 24.5% year on year in the 1H 2010, achieving $3,9bn. It should also be noted that ODA flows and external borrowings have not yet been taken into account.

Foreign reserves are expected to increase by $2bn to $17bn by the end of this year. Credit growth for the first 7 months was 12.97% highlighting the importance of recent reductions in bank lending rates in realizing the governments effort to achieve its target of 25% for the year. Continued low inflation has also given the government room to increase the money supply in order to push lending rates lower.
The VN-Index continued its sideways path during the month as mixed second quarter earnings failed to support a change in stagnant retail sentiment. However, the downgrade did prompt net buying from foreign investors to decline towards the end of the month. The VN-Index closed the month at 493.91 or a decrease of 2.61% MoM.

Our View – By end of July, most corporates have disclosed their 2Q 2010 earnings results which have been quite mixed with consumer sector looking good while property and materials sectors seeming weak. Despite first half year business results being in line with expectations and macro economy experiencing positive signals in the month, they were not supporting enough to drive the bourses upwards as investors remained skeptical about new capital flows injected into economy via credit growth policies.

For August, we expect the markets movement to be mainly driven by factors such as selling pressure, investors confidence and a break-through in easing monetary policies of the State Bank of Vietnam (SBV). Concerns on the oversupply of shares in the market (particularly from banks in order to meet the minimum charter capital requirements) will also create a lot of pressures on the VN-Index.  As the market has followed a bearish trend recently, specific and comprehensive actions from the SBV via credit growth policies will be an important catalyst in bringing back investors confidence.

Currently, we still uphold our interests in telecommunication, oil & petrochemical, dairy product, pharmaceuticals and banks.  Moreover, we will be continually keeping an eye on news on the global economy and monthly government meetings to closely observe the trend of macro and monetary policies in the near term.
Source: VAM, 08.08.2010

Filed under: News, Risk Management, Services, Vietnam, Wealth Management, , , , , , , , , , , , , ,

August 6, 2010 • 11:04 pm 0

Kroll LATAM Risk Report August 2010: Money Laundring, Mobile Banking, Mexican Security, Brazilian Litigations

MONEY LAUNDERING  Banks on High Alert

Throughout much of Latin America and the Caribbean, banks and other financial institutions are getting tougher on money laundering. For the bad guys, the game of cat-and-mouse continues, as they jump from one country to another, looking for the weakest link in the chain. GO TO FULL STORY

BANKING & TELECOM  Mexico The Regulator as Hero

Mexico’s unheralded decision to design rules for mobile banking is a major milestone on the road to including millions of unbanked and underserved Latin Americans in the financial system and the formal economy. GO TO FULL STORY

Mexico Corporate Security

An annual survey conducted by Kroll and the American Chamber reveals a higher sense of insecurity among business executives at multinational and Mexican corporations. The safety of employees and executives remains the top concern for corporate heads of security. GO TO FULL STORY

CORPORATE LAW Challenging Sham Litigation  in Brazil

A Brazilian regulatory agency takes on Germany’s Siemens for alleged anti-competitive practices in a case that is likely to set an important precedent for regulators and the courts in protecting free market competition.  GO TO FULL STORY

Source: KROLL, 06.08.2010

Filed under: Brazil, Central America, Chile, Colombia, Latin America, Mexico, News, Peru, Risk Management, Venezuela, , , , , , , , , , , , , , ,

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