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Friday, 10 January 2014

Guest post: EM debt risk – the devil is in the detail | beyondbrics

Guest post: EM debt risk – the devil is in the detail | beyondbrics:

"Investors in US dollar-denominated bonds issued by emerging market corporates are worried that the greenback’s rise, together with a broad decline in EM currencies, could increase the risk of defaults on their holdings. How worried should they be?

Those now ringing the alarm bells about US currency risk in the EM corporate debt market are doing so because of what they see as the big picture: a systemic risk caused by many companies financing domestic assets with foreign currency liabilities.

Focus on borrower exposure

Are they right? In this instance our research leads us to conclude that investors who are focused on the detail – that is, individual borrower risk – may have a better handle on the situation than those who assume that US currency risk applies equally to all EM companies with US-dollar debt."

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Egypt’s Mafia Fund | tks @REBELECONOMY

Egypt’s Mafia Fund | REBEL ECONOMY:

"A private equity fund launched by Gamal Mubarak managed to reel in millions of dollars of investment from Egypt’s elite, revealing the depths to which political and business connections ran as he began rising in stature in the late 1990s.
According to a document obtained by Rebel Economy, Gamal Mubarak’s $54 million Horus I Fund, created in 1997, attracted some of the country’s most controversial businessmen including steel fugitive tycoon and Mubarak-confidante Hussein Salem, steel magnate Ahmed Ezz, who was acquitted in June after being charged with monopolising the country’s steel market, and the ex-CEO of Egyptian investment bank EFG Hermes, Hassan Heikal. Heikal is a defendant in an insider trading case involving both of the Mubarak sons. His former colleague, Yasser El Mallawany, who is still officially an employee of EFG, is another investor in the Horus Fund."

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Oman to position self as Iran's gas broker if sanctions lifted - AJW by The Asahi Shimbun

Oman to position self as Iran's gas broker if sanctions lifted - AJW by The Asahi Shimbun:

The Sultanate of Oman is positioning itself to broker Iran’s natural gas sales to the rest of the world, including Japan, if, and when, international sanctions over Tehran's nuclear ambitions are eased.
A preliminary accord was reached in November, whereby the United States, Britain, Germany, France, China and Russia agreed to ease sanctions on Iran for six months if Tehran agreed to temporarily freeze its nuclear program.
In a move seen by some as using great foresight, the Sultan of Oman, Qaboos bin Said, signed a memorandum to lay an underwater pipeline across the Strait of Hormuz to Iran and to purchase $60 billion (6.3 trillion yen) worth of natural gas over 25 years from 2015.
The agreement was signed during a visit to Tehran in late August soon after Hassan Rouhani assumed Iran's presidency, and three months before Iran reached the preliminary sanctions-busting deal.
Oman's interests coincided with those of Iran, which is eager to begin exports to redevelop its gas resources and infrastructure, which suffered under the sanctions. The Iranian ambassador to Oman told a local newspaper that half of Iran's exports to Oman will be re-exported to Japan, South Korea and India.
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Exclusive-Iran, Russia Negotiating Big Oil-For-Goods Deal - NYTimes.com

Exclusive-Iran, Russia Negotiating Big Oil-For-Goods Deal - NYTimes.com:

"Iran and Russia are negotiating an oil-for-goods swap worth $1.5 billion a month that would let Iran lift oil exports substantially, in defiance of Western sanctions that helped force Tehran to agree a preliminary deal to end its nuclear programme.

Russian and Iranian sources close to the barter negotiations said final details were in discussion for a deal that would see Moscow buy up to 500,000 barrels a day of Iranian oil in exchange for Russian equipment and goods.

"Good progress is being made at the moment with strong chances of success," said a Russian source. "We are discussing the details and the date of signing a deal depends on those details." The Kremlin declined comment.

"Our desire is to sign the deal as soon as possible," said a senior Iranian official, who declined to be named. "Our officials are discussing the matter with the Russians and hopefully it will be inked soon, regardless of whether we can reach a (nuclear) agreement in Geneva.""

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India’s overseas millionaires: helping home? | beyondbrics

India’s overseas millionaires: helping home? | beyondbrics:

"India’s biggest resource – a young population, a democratic system, or the large pool of wealthy citizens it sends abroad?

According to a new report from WealthInsight, the researchers, 180,000 Indian millionaires live abroad and they are together worth $634bn – a figure that is expected to grow to $1.1tn in three years.

The report classifies a non-resident Indian (NRI) as a citizen who lives abroad for 180 days a year or more, or anyone of Indian origin with a foreign passport. And using its detailed database of high net worth individuals around the world it finds there is a clear divide between millionaire and non-millionaire NRIs."

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Fitch Affirms Bahrain at 'BBB'; Outlook Stable | Reuters

Fitch Affirms Bahrain at 'BBB'; Outlook Stable | Reuters:

"Fitch Ratings has affirmed Bahrain's Long-term foreign currency Issuer Default Rating (IDR) at 'BBB' and local currency IDR at 'BBB+'. The Outlooks are Stable. The issue ratings on Bahrain's senior unsecured foreign and local currency bonds have also been affirmed at 'BBB' and 'BBB+', respectively. The agency has simultaneously affirmed Bahrain's Country Ceiling at 'BBB+' and Short-term foreign currency IDR at 'F3'."

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EconoMonitor : EconoMonitor » Emerging Markets: What Has Changed

EconoMonitor : EconoMonitor » Emerging Markets: What Has Changed:

"1) China IPO has resumed in earnest
2) The Korean government may step in to help exporters
3) Brazilian domestic auto sales declined for the first time in 10 years while Mexico’s auto industry booms
4) Hungary central bank minutes suggest rate cuts to continue this year, but at a slower pace
Over the last week, the top equity performers were Argentina (+1.1%) and Czech (1.0%), while the worst performers were China (-3.9%) and Poland (-2.3%). In FX (vs. USD) INR (+0.3%) and Malaysia (+0.3%) where to top performers, while ZAR (-1.2%) and KRW (-1.2%) underperformed."

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Stephen King's spectre of deflation

UAE banks benefit as confidence rises | The National

UAE banks benefit as confidence rises | The National:

"UAE banks are preparing to report another set of improved results this month as a rise in business confidence and soaring housing prices pushed loan growth higher and reduced bad loan provisions.

Deposits are also rising as the growing economy puts more money into people’s wallets.

Investors are also anticipating announcements of higher dividend yields on the back of better than expected profit for the fourth quarter of 2013.

While the holders of bank stock may not be disappointed, analysts said that the banks would probably keep some money on the table to fund expansion plans."

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Dubai Group names banker from main creditor as CEO -sources | GulfNews.com

Dubai Group names banker from main creditor as CEO -sources | GulfNews.com:

"Dubai Group, in the midst of a $10 billion (Dh36.7 billion) debt restructuring, has appointed as its chief executive Ahmad Al Qasim, who previously worked at its biggest creditor, three sources aware of the matter told Reuters.
David Smoot, the chief executive of Dubai International Capital (DIC) who was asked earlier this year to manage the sale of Dubai Group’s assets, didn’t take up the role, which led to Qasim’s appointment, the sources added on Thursday.
Dubai Group didn’t immediately respond to a request for comment.
Qasim, an Emirati, was a director of investment banking at Emirates NBD from February 2013, according to his LinkedIn page, and has also held roles at General Electric and its joint venture with Abu Dhabi’s Mubadala Development Company."

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