Global Finance

2011: The Year of the Customer Experience

Technology innovation has shifted from being business-driven to consumer-driven, and a number of massive disruptors -- cloud, mobile, social -- are challenging businesses to adapt in order to meet the needs of their customer-base. Technology is also knocking down walls, enabling businesses to disrupt and collaborate across industries. Square, a start-up launched by Twitter co-founder Jack Dorsey, is an electronic payment service which allows users to accept card payments through their mobile ...

A New Status Quo

It would not take a forensic accountant to trace the origins of the global financial crisis to credit default swaps that were exposed to subprime mortgages. Yet anyone who expected the subprime mortgage implosion in 2007 and the ensuing stock market crash in 2008 to scare investors away from using financial derivatives could hardly have been more wrong. Banks that embraced the full gamut of challenges during the crisis and still emerged in flexible enough shape to keep rolling out new product...

Africa

Uganda moved closer to becoming an oil producer after UK-based Tullow Oil reached an agreement with the government over a tax dispute. Botswana plans to complete privatization of Botswana Telecommunications by April. Senegal is reportedly eyeing the launch of a debut sovereign Sukuk bond next year, with Citibank as arranger. Nigeria's efforts to revive its banking industry got a boost this month after the state-owned company acquiring bad loans from local banks announced plans to buy back nea...

Banks Bounce Back

When the credit crunch was at its peak, banks in Central and Eastern Europe (CEE) were beset by fear: that Western European parent banks, which control some 80% of the banks sector in CEE, would pull the plug on the region; that local banks would collapse under the weight of bad commercial or personal debts; and that some banks might be found to have invested in overly risky property sectors or be laden with toxic debt. In the end, none of those fears materialized. According to ING's Andrezj ...

Basel Iii Takes a Beating Over Trade Finance Treatment

When the new Basel III capital adequacy proposals were announced back in the summer, some members of the banking community breathed a sigh of relief as the timeline for their introduction was relaxed, with the deadline for the new "core" Tier 1 capital ratio to he phased in by January 2015 and the capital conservation buffer, by January 2019. Stuart Nivison, head of trade and supply chain, Europe for HSBC Bank, says trade finance instruments are not used to create leverage but are put off the...

Bny Mellon Signs Pacts in Shanghai and Singapore

Brazil

Mounting concerns over Banco PanAmericano's liquidity sent its shares into freefall and prompted a government bailout. The bank -- Brazil's 20th largest by assets -- received a $1.5 billion emergency loan from Grupo Silvio Santos, a local entertainment conglomerate that holds a controlling stake in the bank. The finance ministry has again increased its full-year GDP growth forecast, despite a recent slowdown in industrial output. Officials now predict the economy will grow by 75% this year, c...

Burma's Elections Raise More Questions Than They Answer

Burma held its first election in two decades in early November. The winners of the election will rake control of the government from the military, which has ruled the country for 48 years. The election triggered conflict within Burma, especially in the ethnically diverse northeastern region. As a result, an estimated 15,000 refugees poured across the border into Thailand. Despite the conflict, some of the country's nonmilitary parties did win offices. Burma's election drew criticism abroad fo...

China

China's trade surplus rose to $27.15 billion in October, its second highest reading of the year, the customs office reported last month. China's consumer price index rose 4.4% year-on-year in October, its highest rate of growth in two years. Manufacturing in China expanded rapidly in October, according to two separate indexes. China's National Association of Financial Market Institutional Investors on October 29 introduced guidelines for the trade of renminbi-denominated credit default swaps ...

China Construction Bank: A Big Stride Forward

Fed Pulls Rug Out From Under Dollar, Fueling Carry Trade

Although the Federal Reserve's main focus is not the dollar, which is the purview of the US Treasury Department, it had to know that its $600 billion asset-purchase plan would grease the greenback's skids. The dollar came under heavy selling pressure against most major currencies in the wake of the Fed's announcement, which triggered a round of complaints from emerging markets worried about controlling inflation and maintaining their global competitiveness. The only thing that will save the d...

Federal Reserve Keeps Bond Rally Alive with $600 Billion of New Purchases

The bond market rally was given a new lease on life last month when the Federal Reserve announced it would buy $600 billion of US treasuries -- and maybe more, if necessary -- by the middle of next year. While the announcement was largely in line with expectations analysts say it will ensure a further decline in rates and leave the window open for record borrowing by corporations. The monetary stimulus, known as quantitative easing, means that the Fed is monetizing US government debt, which c...

Ford's Turkish Van Drives Into Us Market

Former Yukos Chief Faces More Time in Jail

After months of wrangling, the verdict on the second trial of Mikhall Khodorkovsky, the former head of Russia's Yukos Oil Co, is due in mid-December. The ex-tycoon will probably be sentenced to six years in a Siberian prison cell, on top of the eight years he's already served. Russia's investment environment will get yet another black eye. As the end of his sentence approached, though, the government put together a new case, claiming that Khodorkovsky had in effect stolen much of Yukos oil pr...

Frontier Markets Index Tracks New Asset Class

G20's Mantra Papers Over Big Differences

At last month's Seoul summit of the G20, the US was isolated from the other world economic powers by the Federal Reserve's decision to print hundreds of billions of dollars to boost the struggling US economy. The G20 summit's failure was predetermined when China and Germany rejected targets for current accounts. In the end, the leaders agreed to set vague "indicative guidelines" on identifying imbalances, secure in the knowledge that they lack the enforcement mechanisms to require countries t...

Gee Whizz

Last month's G20 meeting in Seoul may well have been the most-hyped gathering of global leaders in recent years. After the G20's success in rebuilding confidence in the aftermath of the global financial crisis -- and in creating the impression that world leaders of every political stripe and persuasion could, indeed, work together for the common good -- hopes were high that the summit would produce some concrete proposals for more effectively managing the global economy.

Global Ipo Pipeline Filling Up Quickly

Companies based in China and India dominated global initial public offerings (IPO) in the first three quarters of 2010, and now the US is getting ready to join the new-equity rush. The IPO market in the US is positioned for a very active fourth quarter, with more than 170 companies in the pipeline, according to Renaissance Capital, based in Greenwich, Connecticut. General Motors led the parade of new issues in November with an IPO that was expected to raise about $10 billion as Global Finance...

Going Mobile

In the second of a two-part series, Global Finance identifies the best corporate/institutional and consumer Internet banks globally and in six regions, plus an overall winner. They also name global winners in six corporate/institutional subcategories and seven consumer subcategories. As electronic banking, the fastest-growing payment system, continues to change and evolve rapidly, the best Internet banks quickly adapt to and meet such challenges as new security threats, forms of fraud and gov...

Hard Times

Although all are struggling to recover from the worst crisis since the transition from communism began. Central Europe, the Baltics, Southeastern Europe and the CIS all have distinctly different prospects. Analysts agree that although they are over the worst of the economic downturn most countries are not recovering as robustly as anticipated. The European Bank for Reconstruction reckons GDP across the region in which it operates (from Central Europe to central Asia) will increase by 4.2% thi...

In the Driver's Seat

According to the IMF's World Economic Outlook, published in October, developing Asia is expected to continue to lead the global economic recovery, with projected economic growth of 8.4% in 2011. The two economies expected to lead the recovery in Asia are China, with projected growth of 9.6% for 2011, and India, which the IMF expects to grow by 8.4% in 2011. A topic that is likely to continue to dominate debate in 2011 is the growing global role of China's currency, the renminbi. Alex Thursby,...

India

Coal India became the largest IPO ever in India and one of its most successful. The stock ended the first day of trading on November 4 with a gain of 32% over the IPO price. Meanwhile, even as foreign investors remain bullish on India, the Reserve Bank of India's tight monetary policy aimed at combating an alarming rise in inflation is having a noticeable effect. Separately, India's role in the global economic order received a boost in mid-November when the International Monetary Fund announc...

Infrastructure Investment Sustains Growth

Dubai's world-class infrastructure gave the emirate's creditors faith that last year's debt crisis was merely a speed bump on the road to a successful economic future for the trading hub and financial center of the Middle East. Bankers say the entire region will benefit from heavy investment in infrastructure by regional governments, backed by growing oil revenue. Meanwhile, Dubai is enjoying improving transportation and tourism receipts, as the global economy recovers. In neighboring Saudi A...

Innovation in Emerging Markets

Living On the Edge

The travails of Southern Europe -- in particular Spain, Portugal and Greece -- continue to dominate the concerns of Europe's politicians and global markets as 2010 draws to a close. Concerns over the ability of the eurozone to survive the debt crisis of its weakest members have led to tumbling stock markets and soaring bond spreads periodically throughout the year. Although all three countries have efforts under way to address their problems, there is little doubt that fears about their fate ...

Mutual Benefits

Luis Alberto Moreno, president, Inter-American Development Bank, said that Asia's share of Latin American trade had already more than doubled from 9% in 2000 to some 20% last year, making Asia the region's second largest trading partner after the US. China's massive market size and deep pockets mean it remains the main player. Trade between Latin America (including the Caribbean) and China soared from a meager $8.4 billion in 1995 to $110 billion in 2007. The flurry of trade negotiations is c...

Potash Slapdown Raises Specter of Canadian Protectionism

When Canada's government blocked Australian mining firm $39 billion bid for fertilizer giant Potash of Saskatchewan, it did more than put a dent in the Canadian company's share price: It also rattled foreign investors who may have been looking at Canada as a potential direct investment opportunity. With an economy that has bounced back well and key sectors, such as banking and certain commodities, benefiting from sound financials and robust demand, Canada is currently one of the more attracti...

Profit-Sharing Plan Raises Business' Hackles

A controversial profit-sharing bill submitted to Congress by Argentina's ruling coalition is becoming a proxy fight between the nation's labor and business sectors ahead of next October's presidential elections. Labor leaders say the bill enforces a profit-sharing provision already in the Constitution, but business leaders counter that it violates property rights and provides a disincentive for business owners to invest. Business groups allege the profit-sharing plan violates property rights ...

Qe2 Boosts Cross-Border M&a Deals

Growing risk appetite triggered a sudden burst of cross-border mergers and acquisitions in October, as investors prepared for a second round of quantitative easing, or QE2, from the Federal Reserve. The number of announced cross-border M&A deals surged, and the total value of these deals rose about 52% compared with October 2009, according to Barclays Capital, which publishes an M&A trend index. Among the unintended consequences of actual and threatened quantitative easing by Western ...

Questionable Election Elicits Quiet Cheer From Investors

Azerbaijan's parliamentary elections in early November ended in controversy, with critics claiming the opposition parties were prevented from being able to properly challenge Yeni Azerbaijan, the party of the authoritarian president Ilham Aliyev. In the event, the incumbent party won 71 of parliament's 125 seats, with some smaller pro-regime parties also winning seats. Though they might not care to admit it, investors in what was one of 2009's fastest growing economies -- GDP increased 93% in...