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September 2002

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  • The IMF has disbursed $13 billion to Tukey this year and claims to see widespread support for economic reform in the country. But the summer’s political crisis has raised the prospect of electoral success for the Islamists.
  • South Africa
  • Businessmen are joining Kazakhstan's democracy movement as independent economic activity hits a ceiling.
  • The affair is not over but investors’ passion for a new EU convergence story has cooled. They are beginning to price in the impact of delays to entry for leading candidates, the long run-in for others, and the unlikelihood of rapid single-currency status for any new members.
  • Russia
  • Forget proper arguments, who's got the best celebs on their side? This is what the euro vote is coming to in the UK as the two camps draw up their campaigns.
  • Hedge funds
  • In my view the bear market in equities will resume beyond the so-called summer rally. Crucially, the huge fall in household wealth will dampen consumer demand and rising risk aversion will delay a revival of global investment. There will also be much weaker corporate earnings growth, making equities overvalued; a weaker dollar spreading deflation into emerging economies; and poor leadership from the US administration on global economic policy and geopolitics.
  • South Africa’s big banks have first-world management, technology and systems but operate in an emerging market where growth prospects are poor and the future is uncertain. They’re seeking ways to grow without risking the bank.
  • Credit markets have contracted dramatically in recent months and all but the safest borrowers, which have benefited from a flight to quality, have had to pay a high price for funds. On the buy side investors want assurances that they will be protected from risk. The banks that have performed best in this year’s capital-raising poll are therefore those that have come furthest in developing complex products that can save money for borrowers and enable lenders to hedge effectively.
  • From the highway packed with crawling traffic heading downtown you can see the tangle of buckled carriages skewed across the track. Final test runs of the AirTrain, San Francisco's state-of-the-art driverless airport link, don't seem to be going to plan.
  • Kazakhstan led the world growth table in 2001 and credit rating agencies see it as a sound candidate for borrowing. Export credit agencies are not so confident, pointing in their ratings to paltry political reform and a nepotistic ruling elite.
  • With asset prices beaten down, private-equity firms see big opportunities to buy now. But are they calling the bottom of the market too soon?
  • China is a massive liberalizing market. Does this mean big opportunities for foreigners to make money? Up to a point perhaps – size of this order is difficult for outsiders to get a grip of and domestic institutions will in any case want the biggest share.
  • Latin America
  • IMF/World Bank meeting
  • Kazakhstan has had more success than most former Soviet states in reforming its power sector. Electricity suppliers hope prices can be pushed higher but the abundance of oil and gas will limit rises.
  • Brazilian banks continue to dominate indigenous banking in Latin America and continue to grow despite the economy’s woes.
  • Euromoney’s analysts have taken a measured view of such hyperbole as the “axis of evil” and resisted over-reacting to the situation in such regional crisis points as southern Africa. Latin America’s troubled economies suffer the severest downgrades.
  • The US is unlikely to remain the world’s engine of growth. The trade deficit is at a record high, the federal budget has reverted to deficit, and talk of a fall in consumer spending, even deflation, is growing. The Bush administration appears hell-bent on war with Iraq. Congressional politics are acrimonious and gridlock is the likely outcome of upcoming mid-term elections.
  • Visitors to Washington for the IMF/World Bank meetings might be perplexed by the recurrent mention by their hosts of one Anthony Williams. Williams is DC's mayor but perhaps not for much longer.
  • September 11 awakened financial institutions to the inadequacies of their business continuity systems. Across the industry, much thinking has been done about how to implement such systems. But in the course of the past year, some firms have nodded off again.
  • Is the three-year equity bear market nearing its end? Or is it just the beginning of a financial and economic collapse that could shake the very core of the free-market capitalist system?
  • A minority of a minority – five holders of part of the 15% active capital of Icelandic mutual savings bank Spron – are crucial to the takeover bid being made by commercial bank Búnadarbanki.
  • Saudi Arabia’s investment needs are so great that it looks as if economic reform – however halting – will win out over statist, introverted policies.
  • Will it be fourth time lucky for Luiz Inacio Lula da Silva in Brazil's presidential elections? If he wins, the result will not be welcomed on Wall Street. What are the repercussions for Brazil, already teetering on the brink?
  • When it comes to corruption, some things never change. While Nigeria is consistently seen as one of the most corrupt countries, Finland, Denmark and New Zealand are viewed as perennially clean.
  • Debt markets
  • One-upmanship is the norm in investment banking and UBS Warburg and Goldman Sachs have proved it's alive and well after the listing of Bank of China Hong Kong. But rather than the usual "our execution was better than yours" routine, this time the boasting is over who gave the snazziest gift to a client.
  • Ian Macfarlane points to the dynamism of Australia’s economy, neglected by a market that went hi-tech mad, as part of the reason for his success at the Reserve Bank of Australia. But he’s made a few good calls of his own.
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