Markets Archives - Page 425 of 717

An Emerging Markets Status Update

1) The Brazilian congress passed a new measure that will hurt the fiscal outlook, 2) Brazil central bank kept the inflation target for 2017 the same at 4.5%, but narrowed the tolerance band to +/ 1.5 percentage points, 3) Israel central bank has gotten less dovish, 4) Nigeria central bank banned importers from accessing the FX market for some goods, 5) US Treasury Secretary Lew said that China committed to limit FX intervention only to times of “disorderly market conditions.”, 6) China’s cabinet is moving to scrap a rule that limits lending by commercial banks to 75% of th

African Economies are Booming, But Matching Labor Supply and Demand is a Challenge

Africa is on the rise. Once, nations like Ethiopia were poster children for poverty and starvation. Today Ethiopia is one of the fastest growing economies in the world. In fact, according to a report by Forbes, seven of the fastest growing global economies today are in Africa. North Africa expects average GDP growth rate of four to five percent by 2020, and Sub-Saharan Africa expects six to seven percent.

Forecasting China’s Future

Forecasts of China’s future run the gamut. I do not endorse either extreme. There is no significant chance that in the foreseeable future the Communist government will follow the fate of the Soviet Union. Nor do I share the view that the People’s Republic of China is becoming so powerful that it will dominate the world.

China Encourages Debt as Manufacturing Shrinks

Chinese economic activity continues to decline as the government encourages borrowing money to fuel growth.

According to the HSBC flash Purchasing Managers’ Index (PMI), manufacturing activity shrunk again in June, with a reading of 49.6. Some pundits are cheering the fact that the reading is up from May, when the reading was 49.2, and beat expectations by 0.2 points, but several economists are still warning that the contractionary trend remains intact and is indicating that Chinese growth is likely to fall short of its target for the year.

The African Development Bank Could do Great Things but Needs the Proper Resources

Africa’s only regional bank, the African Development Bank Group (AfDB), has come a long way since its near collapse in 1995. It now reflects its mandate to fight poverty by aiding public and private investment projects that promote socioeconomic improvement.

A number of factors have driven the bank’s advances under the decade-long leadership of outgoing president Donald Kaberuka. For example, it has joined forces with other multilateral agencies such as the World Health Organisation and the World Bank to fight health epidemics such as HIV/AIDS, polio and ebola.

Australia’s Port Privatization Plan is a Mess

Recent plans to privatise a number of Australian ports have become very messy. In Victoria, both sides of government were committed to privatising the Port of Melbourne Corporation (PoMC), intending to use the proceeds to remove a number of level crossings throughout the state, and enabling it to qualify for the Treasurer Joe Hockey’s 15% recycling assets contribution scheme.

Life After ChAFTA for Australia

The landmark Australia–China Free Trade Agreement (ChAFTA), signed sealed and delivered, completes a trifecta of trade deals since last year with Australia’s three Northeast Asian neighbours — China, Japan, and South Korea.

The Underpinnings of the China Equity Market’s Meteoric Rise

Not so long ago, China’s A-share index lingered around 2,000. Before last week’s plunge, it closed at 5,200. In the short-term, the market will remain volatile, but just as China’s economy has not emulated typical market fluctuations, its potential should prevail in the long term.

Recently, the value of Chinese stocks climbed over $10 trillion for the first time, according to Bloomberg’s data. That translates to a gain of $6.7 trillion in 12 months. That is more than Japan’s entire stock market and about 40% of the U.S. market.

Japanese PM Abe’s New Fiscal Initiative

Investors have been more focused Japan’s aggressive monetary policy and the structural reforms promised under Abenomics than fiscal policy. However, the Abe government is taking a new fiscal initiative.

It has taken on a new more ambitious goal, which was unveiled yesterday, and will come up for a vote by the cabinet next week. After reiterating its goal of eliminating the primary budget deficit by 2020, it provided an interim target. It will strive to achieve a 1% primary deficit in FY2018.

Overcoming Challenges to Achieve Modi’s Optimism

A visionary new leader, Narendra Modi, has recently come to power in India. He seeks to realise India’s huge growth potential and make it a major global player. This has generated enormous optimism nationally, and internationally, about an Indian resurgence. What challenges must India overcome to achieve this?