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Wednesday, 11 December 2013

Ukraine bonds: inverted yield curve failing to capture risk? | beyondbrics

Ukraine bonds: inverted yield curve failing to capture risk? | beyondbrics:

"As anyone who follows Ukrainian government international bonds will know, the country’s yield curve has a tendency to invert. When this happens, it suggests that while investors think things will probably be all right in the long run, they see a big risk of something going wrong in the near future.

In its latest inversion (see below), the curve has been back to front for about two months, suggesting investors were seriously concerned before demonstrations began three weeks ago on the streets of Kiev, and long before Viktor Yanukovich, the president, jilted the European Union by not, after all, signing trade and association agreements at the EU’s Eastern Partnership summit at Vilnius on November 28-29.


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[video] Pressure grows for compromise in Ukraine | beyondbrics

[video] Pressure grows for compromise in Ukraine | beyondbrics:

James Blitz, FT leader writer, and Neil Buckley, Eastern European editor, discuss the situation in the capital Kiev between anti-government protesters and riot police. As President Viktor Yanukovich fights for survival, pressure to compromise is increasing." 'via Blog this'

How the EU is losing its entire neighbourhood « Inside Arab Spring

How the EU is losing its entire neighbourhood « Inside Arab Spring:

"Many Europeans were baffled when they saw the recent images from Kiev’s Independence Square, or, as it is now being called, the EuroMaidan: Hundreds of thousands of people taking to the streets, defying the cold and the police warnings, to wave EU flags and to chant “Europe!”

How is it possible?

Not one EU citizen would even consider going to stand on a snowy square with a European flag in his hand to ask for more European integration or a bolder European foreign policy. No. The mood in the EU is one of scepticism, cynicism and indifference. The trend is one of scaling down and of being everything but ambitious.

The result is that the European Union is driving with the handbrake on. It does take measures, but they are always too little and often too late in order to solve the problem or meet the challenge. One example is the financial and economic crisis. Another is the Neighbourhood Policy, which is becoming an unprecedented disaster."

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MIDEAST STOCKS-UAE markets retreat from 5-year highs; Egypt up | Reuters

MIDEAST STOCKS-UAE markets retreat from 5-year highs; Egypt up | Reuters:

"Stock markets in the United Arab Emirates edged down on Wednesday after hitting five-year highs the previous day, with pronounced profit-taking in Abu Dhabi and Dubai stalled near a psychologically important level.

Abu Dhabi's bourse ended 0.8 percent lower at 3,986 points, but is up 51.5 percent in 2013. Among regional bourses, only Dubai has made bigger gains this year.

"This is just very natural booking of profits towards the year-end," said Amer Khan, fund manager at Shuaa Asset Management.

Financial stocks were the biggest drag, with United Arab Bank, First Gulf Bank and National Bank of Abu Dhabi all in retreat.

Dubai's measure slipped 0.07 percent to 3,100 points, trimming 2013 gains to 91 percent."

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ECONOMICS - Turkey's Central bank head says current account gap limiting growth

ECONOMICS - Turkey's Central bank head says current account gap limiting growth:

"Turkey’s central bank chief said on Dec. 11 the country’s huge current account deficit was holding back economic growth, adding that the bank will stay cautious on monetary policy until inflation falls in line with its targets.

Turkey has seen explosive consumption-led growth over the past decade, with per capita wealth almost tripling in nominal terms. But its low savings rate and huge energy deficit have made it heavily dependent on volatile foreign capital flows.

For the first 10 months of the year, the country’s current account deficit widened to $51.901 billion from $39.553 billion a year earlier, central bank data showed on Dec. 11."

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Pakistan’s lessons for Ukraine | beyondbrics #EuroMaidan

Pakistan’s lessons for Ukraine | beyondbrics:

What’s next for Ukraine? None of the options available seems to offer much hope. Sign up with the EU/IMF? Too many conditions. Sign up with Russia’s rival customs union? Too much opposition on the streets. Muddle through? A looming balance of payments crisis makes this a short-term option at best.

Something clearly has to give. Maybe Pakistan’s recent experience with the IMF offers some pointers as to what and how.

There are some obvious parallels. Pakistan faced daunting debt repayments, including repayments to the IMF. So does Ukraine. Pakistan’s foreign exchange reserves had fallen to dangerous levels. So have Ukraine’s. Among other conditions, the IMF wanted Pakistan to reduce energy subsidies the Fund said it could not afford. It wants the same thing of Ukraine. The Pakistani government refused to accept the IMF’s conditions, and its previous IMF programme had collapsed following failure to comply. Ditto, and ditto, in Ukraine."

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Poland’s Energa: first day slump | beyondbrics

Poland’s Energa: first day slump | beyondbrics:

Initial public offerings, especially those tied to privatisations by Poland’s treasury ministry, have the reputation for being money spinners, but there is no such thing as a risk-free investment, as punters are learning on Wednesday on the Warsaw Stock Exchange. The shares in Energa, the country’s third largest power distributor, sagged in the first hours of trading.

Energa launched on the WSE in a privatisation worth 2.4bn zlotys ($787m), the bourse’s largest IPO in two years.

But the gloomy atmosphere on the Warsaw Stock Exchange over the last couple of days, coupled with what analysts said was a rush by employees to cash out by selling their share allotments, caused the price to droop. Energa was down by 4.5 per cent at 16.24 zlotys in early and very heavy trading."

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Dubai Airshow spending spree: how will it be financed? -

Dubai Airshow spending spree: how will it be financed? - Business Intelligence Middle East - - News, analysis, reports:

"The vast aircraft orders placed by airlines at November’s Dubai Airshow highlight the rapid growth of the Gulf region’s air carriers and represent a bold statement of intent regarding their future expansion plans.

Emirates placed orders with a combined list value of USD 99 billion (mostly Boeing 777x aircraft, along with 50 Airbus A380s), while Etihad also committed to a vast order of Boeing 777x and 787 aircraft (alone worth up to USD 25.2 billion at list prices), along with well over 100 Airbus A320neos, A330 freighters and A350s. Flydubai was also notably acquisitive, purchasing 111 Boeing 737, mostly 737 Max aircraft.

Qatar Airways, while perhaps a little more conservative, also purchased heavily, committing to up to 50 Boeing 777x aircraft and five Airbus A330 freighters. To put this in perspective, at the 2011 Dubai Airshow, Emirates’ USD 18 billion order for Boeing 777 aircraft was an all-time record for the manufacturer – just 2 years later that record has been made to look like a relatively small order."

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The crude market in perspective | FT Alphaville

The crude market in perspective | FT Alphaville: "A picture, they say, is worth a thousand words. The same applies to some charts.

From the IEA’s latest market report on Wednesday:

That’s it. Nothing else to say."

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Ukraine Billionaires Desert Yanukovych After EU Reversal - Bloomberg - #EuroMaidan

Ukraine Billionaires Desert Yanukovych After EU Reversal - Bloomberg:

"In the battle for Ukraine’s future, oligarchs are turning away from the government.

Rinat Akhmetov, the former Soviet republic’s richest man, gave journalists a makeshift office to cover protesters trying to topple President Viktor Yanukovych. Petro Poroshenko, Yanukovych’s ex-economy minister and the head of Ukraine’s largest chocolate maker, sided with demonstrators in a speech at Kiev’s Independence Square. Tycoon Dmitry Firtash’s TV station Inter aired footage countering government claims that protesters incited violence that has left hundreds hurt.

Yanukovych, who’s stood against hundreds of thousands of angry voters after snubbing a European Union free-trade deal in favor of Russia, is now seeing support from the nation’s richest executives slipping away. After boosting their fortunes and supporting Yanukovych’s tenure, oligarchs now face credit-ratings downgrades and the loss of lucrative Western markets, where 19 Ukrainian companies, including Mironovskiy Hleboproduct SA (MHPC), the largest poultry producer, are traded."

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Guest post: Yanukovich’s way out of the quagmire? | beyondbrics

Guest post: Yanukovich’s way out of the quagmire? | beyondbrics:

By Elżbieta Kaca and Ievgen Vorobiov of PISM

The crisis in Ukraine shows no sign of abating. As the authorities have deployed massive police force to clear the barricades around Kiev’s government quarter and on the Maidan, the protesters have no intention of leaving the streets. The opposition’s rigid conditions for further negotiations – punishing the perpetrators of a violent police clampdown, releasing the arrested protesters and sacking the government – have fallen on deaf ears. Despite the presence of foreign mediators, early on Wednesday police moved in to try to disperse the protests in the heart of Kiev.

President Viktor Yanukovich, in remarks after a makeshift round-table with three former presidents on Tuesday, seemed to have acknowledged the first two demands of the opposition. He implied that both protesters and police would bear responsibility for the clashes. And he hinted at the possible release of some detained protesters. The subsequent police action, however, showed it had been just a game of words."

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Heineken: top dog at UB – what now for Mallya? | beyondbrics

Heineken: top dog at UB – what now for Mallya? | beyondbrics:

Once the self-proclaimed “King of Good Times”, flamboyant Indian bmillionaire tycoon Vijay Mallya has seen his airline grounded and has seen part of his drinks empire, United Spirits, controlled by Diageo. Now he’s no longer the biggest player in his remaining drinks business.

As of Tuesday, the largest shareholder in United Breweries, the maker of Kingfisher beer, is Danish brewer Heineken.

For months now there have been rumors about Mallya being usurped by Heineken – the Dutch brewer that inherited a stake in the group back in 2007 as part of its joint acquisition with Danish brewer, Carlsberg, of Scottish & Newcastle."

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Ukraine requesting EUR 20 bln from EU as financial aid - PM Azarov #EuroMaidan

Ukraine requesting EUR 20 bln from EU as financial aid - PM Azarov:

"Ukraine is requesting financial assistance in the amount of 20 billion euro from the European Union as part of preparations for signing an association agreement, Ukrainian Prime Minister Mykola Azarov said.

"Those who have gathered at Maidan [Independence Square in Kyiv] are demanding that an association agreement be immediately signed with the EU. The government also favors the soonest possible signing of the agreement, but we want to provide conditions to minimize losses for the Ukrainian economy," Azarov said.

"We have invited the European Commission to consider under what conditions our industry and economy as a whole will work. We propose resolving the issue by offering financial aid to Ukraine. We have determined its approximate amount at 20 billion euros," Azarov said in opening a government meeting on Wednesday."

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Court seizes foreign assets of Berezovsky - source | Russia Beyond The Headlines

Court seizes foreign assets of Berezovsky - source | Russia Beyond The Headlines:

"Russian law enforcement authorities have tracked down and seized the assets and a number of accounts at foreign banks that belonged to exiled oligarch Boris Berezovsky who died in the UK in March 2013.
"A court ordered the seizure of assets and money deposited in banks and other lending organizations abroad. Operations with these accounts are terminated," an informed source told Interfax on Wednesday.
"The total value of the seized assets of Berezovsky is millions of rubles," the source said.
Russian law enforcement authorities continue to search for Berezovsky's assets and accounts even after his death, he said. "This is not the first court ruling made this year," the source noted."

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Foreign banks in India: losing sleep over regulation | beyondbrics

Foreign banks in India: losing sleep over regulation | beyondbrics:

What keeps foreign banks in India up at night? Regulatory nightmares, at least according to a new survey out on Wednesday from consultants PwC. And while recently-appointed RBI governor Raghuram Rajan is trying to calm their nerves, there are big concerns lurking about the impact of India’s forthcoming elections too.

Year 2013 has been a fairly momentous period for India’s 43 foreign banks, who together make up roughly 6 per cent of the country’s $1.5tn in bank assets – ranging from the long-established “big 3” of Citi, HSBC and Standard Chartered, to relative minnows like South Korea’s Woori or Russia’s Sberbank.

Most importantly, the Reserve Bank of India finally got around to publishing its long-awaited plans to nudge many such institutions, and especially the big, global ones, to set up separately capitalised local subsidiaries."

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Abu Dhabi Investment Authority to invest $250 million in Hines India Real Estate - The Economic Times

Abu Dhabi Investment Authority to invest $250 million in Hines India Real Estate - The Economic Times:

"Abu Dhabi Investment Authority is investing $250 million ( Rs 1,500 crore) in Hines India Real Estate, the Indian arm of American property development and management firm Hines, amid a rise in overseas interest in the sector.

"The sovereign wealth fund has formed a strategic alliance with Hines to invest across the residential segment in metros across India. This is the first direct real estate venture with a developer in India for the fund," said one of the people with direct knowledge of the investment. It's not known how much equity it will have in the venture.

Abu Dhabi Investment Authority declined to comment. "ADIA has a policy of not commenting on market rumours about specific investments etc," spokesperson Erik Portanger said in response to questions emailed by ET."

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▶ Surprise heroes of 2013 - YouTube

▶ Surprise heroes of 2013 - YouTube:


This year brought surprises in the phantom US taper and Europe's return to normality. Laurent Fransolet, Barclays' chief European interest rate strategist, tells the FT's John Authers that while Europe is stabilising, the risk lies with the US taper"

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▶ Breaking Barricades: Ukraine cops clash with protesters in attempt to clear roads - YouTube #EuroMaidan

▶ Breaking Barricades: Ukraine cops clash with protesters in attempt to clear roads - YouTube:


In Ukraine riot police have moved on the capital's main square, the main site of anti-government protests. The opposition claims this is an attempt to disperse the crowds, but the authorities insist they're only trying to remove barricades blocking traffic in the center of Kiev"

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ADX chief predicts stream of IPOs and more global investors next year | The National

ADX chief predicts stream of IPOs and more global investors next year | The National:

"Abu Dhabi Securities Exchange (ADX) is betting that the UAE’s upgrade to emerging market status and an improvement in the economy will pull in more global institutional investors and prompt a stream of initial public offerings next year, according to Rashed Al Baloushi, the ADX chief executive.

The ADX’s benchmark stock measure has gained 52 per cent this year, the third-best performer after indexes in Dubai and Venezuela. It is heading towards its best year since 2005, when it gained 75 per cent, according to Bloomberg data.

The UAE’s economic recovery gained momentum this year, giving a boost to listed companies, Mr Al Baloushi said. Economists expect the economy to grow 4 per cent this year and by at least the same amount next year after Dubai won the right to host World Expo 2020."

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BlackBerry blow: Etisalat and du pull plug on new BBM services in UAE | The National

BlackBerry blow: Etisalat and du pull plug on new BBM services in UAE | The National:

"UAE telecoms operators have abruptly pulled the plug on BlackBerry’s newly launched BBM Channels social media service, only two weeks after its launch.

The mobile operator du said yesterday the service was no longer available, in response to guidelines from the Telecommunications Regulatory Authority (TRA).

“In accordance with the internet management policy issued by the TRA to regulate internet content that is not in line with moral, social and cultural values that the UAE stands for, the BBM Channel application is unavailable to du customers until further notice,” the company said yesterday. “We count on the support and understanding of our customers in this regard.”"

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‘Full GCC union will happen in next generation’ |

‘Full GCC union will happen in next generation’ |

"The GCC union would be a preliminary step that could ultimately lead to a full unification of Gulf states in the next generation, Abdul Aziz Al Uwaisheq, Assistant Secretary General of the GCC, said on Monday.
He was speaking to Al Arabiya news channel ahead of the annual summit of GCC leaders in Kuwait that started on Tuesday. The comments followed the Omani foreign minister Yousuf Bin Alawi’s announcement on Saturday that his country opposes the establishment of a confederation of Gulf states, warning that it would “simply withdraw” from the new body if it materialised. Bin Alawi has also previously said that a decision for a union should be left to future generations.
“The GCC’s charter stipulates that the objective in the GCC is to achieve unity in all aspects. The union would be a preliminary step that would precede ultimate unification that could take place in the next generation,” Al Uwaisheq told Al Arabiya."

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GCC total industrial investments up |

GCC total industrial investments up |

"The number of companies in the six-member Gulf Cooperation Council (GCC) jumped from 7,089 in 1998 to 15,165 in 2012, while the number of industrial workers increased from 559,420 to 1.34 million, and the total value of industrial investments from $81 billion (Dh297.91 billion) to $338 billion during the same period, according to the Gulf Organization for Industrial Consulting (GOIC).
Most of these investments were in sectors of chemical industries, oil refining, base metals, construction metals, building materials and food industries, GOIC said during the ‘Conference on the Reality and Prospects of UAE National Industrial Sector’ which began on Sunday at Expo Centre Sharjah under the patronage of His Highness Dr Shaikh Sultan Bin Mohammad Al Qasimi, Supreme Council Member and Ruler of Sharjah.
The conference is aimed at promoting Emirati high quality industries, both regionally and internationally, as well as discussing ways of developing and diversifying them."

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Late-Night Trading Looms as Winter Takes Toll: Russia Overnight - Bloomberg

Late-Night Trading Looms as Winter Takes Toll: Russia Overnight - Bloomberg:

"While Russia’s elimination of its annual winter clock change may be providing the intended health benefits to farmers and milk cows, the move is pushing OAO Moscow Exchange to search for ways to regain lost stock trading.

The exchange is considering extending the market’s close by an hour to 7:40 p.m. Moscow time so there’s more overlap with the U.S. day, giving American investors more time to trade in Russia, Chief Executive Officer Alexander Afanasiev said. Russian stocks traded in New York yesterday rose 0.5 percent while the benchmark Micex Index slipped 0.1 percent in Moscow.

Exchange officials have stepped up efforts to boost trading in Moscow, where volumes averaged 50 percent of Russian stock trading in London last year, data compiled by Bloomberg showed. The bourse transitioned to a two-day stock settlement in September and Russian equities are set to become available through Euroclear Bank SA next year. The ending of winter time, which then-President Dmitry Medvedev said was aimed at helping the biorhythm of people and milk cows, hurt those efforts."

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Iran Carmakers Offer Rouhani Speedy Peace Dividend After Geneva - Bloomberg

Iran Carmakers Offer Rouhani Speedy Peace Dividend After Geneva - Bloomberg:

"Iran’s auto industry may offer President Hassan Rouhani the best prospect of a rapid peace dividend from his nuclear accord with world powers.

Output at Iran Khodro Co., which makes the Runna and Dena models, and other local carmakers slumped after sanctions made it harder to get parts from abroad. The restrictions are set to ease under the nuclear accord reached in Geneva last month. Companies including Renault SA (RNO) showed up at an auto industry event in Tehran as they gear up to do business again with the Islamic Republic.

Carmakers can help Rouhani as he seeks tangible gains from his diplomacy to shore up support. He was elected after campaigning on promises to end Iran’s global isolation and revive its shrinking economy. Critics at home accuse Rouhani’s negotiators of displaying weakness at the nuclear talks."

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