September 2011

Top stories

Financing the food crisis

Financing the food crisis

Feeding the world is the most pressing issue facing society. Billions of dollars of new investment is needed to forestall future crises in both supply and price. Markets and financial institutions can play a crucial role in meeting the challenge. But how can they do so without being seen to exploit the most crucial resource of all? Sudip Roy reports.

US farmers discover the price of globalization

US agriculture generates profits of nearly $100 billion a year. Food and finance are inextricably linked. But international demand for US agriculture products is providing new challenges for the country’s farmers, especially in price volatility. Helen Avery reports.

Land grab raises concerns about food security

A wave of agricultural land purchases by Middle Eastern investment groups in emerging markets is causing disquiet among governments, NGOs and development institutions. Are these investments for commercial gain, or a grab for food security? Nick Lord reports.

Investors out to make dough from Europe’s breadbasket

Blessed with some of the continent’s most fertile land, Ukraine is of enormous interest to agribusiness. A handful of local and international firms think they have spotted an opportunity. The private sector will be vital to the country fulfilling its potential. Valentina Zarya reports.

Latin America

Citi’s regional renaissance rests on Brazil

Citi’s regional renaissance rests on Brazil

Citigroup is pinning its global strategy on the emerging markets and holds high hopes for its Latin America business. But, right now, it is nowhere near what it could and should be. Rob Dwyer reports from New York and São Paulo.

Vale: Working for the cash machine

Vale is one of the world’s leading mining companies, with activities in 38 countries generating record results. The company is in a strategic sweet spot, exposed to growth in commodity prices and emerging market demand. CFO, Guilherme Cavalcanti, says it is time the company is seen as a global leader, not merely a Latin American champion. Rob Dwyer reports from Rio de Janeiro.

FX derivatives fight history and a currency war

Brazil’s government has not shirked from competitive devaluation policies. The most recent, in July, was a strike against currency speculators through a new FX derivative tax. Rob Dwyer looks at how it will affect corporate hedging strategies.

Capital markets pick up as Argentina booms

Argentina’s capital markets have become much more active this year, as the country’s economy booms and foreign investors turn to it in the belief that it offers investment opportunities. Jason Mitchell reports from Buenos Aires.

Financial crisis

Why nothing can prevent the next global financial crisis

Why nothing can prevent the next global financial crisis

For all the policy decisions of the past three years, nothing has been done to address the fundamental problems facing the economies of the developed world. Four key issues will continue to keep the world in a prolonged period of stagnation. If they all get worse at the same time, the consequences are painful to contemplate. Peter Lee and Clive Horwood look at the state we’re in.

Economics

Sovereign debt

Sovereign debt: Credit specialists dive in as SSA investors take fright

Sovereign debt: Credit specialists dive in as SSA investors take fright

The summer of turmoil in the eurozone has cemented the transition of the region’s sovereign debt sector into one large and volatile credit market. Traditional passive fixed-income fund managers barely know how to cope, while credit specialists are jumping in and expecting to make big returns. Louise Bowman reports.

Investment

Investment: Brownian notions

The pat excuse for volatility striking markets in August is that the investment heavyweights are on the beach. Not so Alan Brown. The chief investment officer of Schroders met Euromoney as panic turned to hysteria. Brown believes these are among the most treacherous markets he has ever experienced, but finds a few boltholes for investors brave enough to be contrarians, writes Andrew Capon.

Russia

Nomos takes on the big beasts of Russian banking

With a nimble approach to business and a track record of riding out storms in the Russian financial system, it is one of the country’s few bank success stories. But will Nomos suffer from growing too far, too fast? Rachel Morarjee reports from Moscow.

Russian state capital leads growth in tech sector

A Silicon Valley-style venture capital industry centred on Moscow might be unlikely, at least for now. But sustained state encouragement including funding could drive a boom in Russia’s high-tech industry. Dominic O’Neill reports.

Turkey

Turkish banks rail against intervention

Macro headwinds, regulatory aggression, competition and new funding structures herald a shake-up in Turkey’s banking sector. Yet with many of the banks’ European shareholders under intense pressure in their home markets, Turkish banking assets have never been so valued. Nick Lord reports.

Turkey debate: A good time for Turkish business

Three leading companies and Garanti Bank discuss the country’s corporate performance and access to finance. Growth is steady and firms are expanding, but there are wider macro issues that won’t go away.

Western Europe

Europe’s smaller banks face a long goodbye

While regulators’ attention has focused on those that are too big to fail, the financial institutions in Europe that face the sternest challenge might be those that are too small to get funding from investors. And those at risk could include some sizeable and well-known banks, as Phil Moore reports.

Country risk

Emerging Europe

Balkan promise

Over the past year Romania has staged a surprise recovery, thanks to careful political stewardship and workers’ willingness to accept swingeing austerity measures. However, there is still much work to be done if the country is to fulfil its potential. Lucy Fitzgeorge-Parker reports.

Middle East

Arab Spring: What revolution means for Arab banks

Arab Spring: What revolution means for Arab banks

THE ARAB-NATIONALIST old guard that hung on to power for 40 years or more is falling. Even in the Gulf, regimes are under pressure. And as with the fall of the Berlin Wall, these events are having a far-reaching impact.

Egypt: Banking on a revolution

Egypt’s top bankers took extreme measures to ensure that the country’s financial infrastructure did not break down as the Mubarak government fell. Now, as they desperately hope that a new regime will enable the banking industry to flourish, optimism is tempered with the reality of how much work there is to do. Eric Ellis reports from Cairo.

Bahrain: Like Wall Street, but now with guns

The political unrest in Bahrain has adversely affected banks and their customers. Loss of business to other Gulf states might be hard to reverse, especially as the government crackdown continues, leaving popular resentment smouldering. Dominic Dudley reports.

Mubadala sets a model for Middle East wealth funds

Spending state oil revenues on prestige stakes in western brands no longer fits so well with the political climate in the Middle East. Mubadala has an alternative model for what Gulf governments can do with spare cash. If you want its investment money, you’d better bring something else to Abu Dhabi as well. Dominic O’Neill speaks to the firm’s senior management.

Bankers yearn for stability after the Arab Spring

It seems unlikely new political freedoms in the Middle East could bring greater economic empowerment. In the short term investors are being put off by the volatility. Banks are reassessing their positions. Dominic O’Neill reports.

Lebanon’s lost opportunity

The economy has been brought to a near standstill by domestic and regional political turmoil, but the country’s banks report rising deposits and profits and feel they can ride out the crisis. Dominic Dudley reports.

Middle East debate: Open for business

Middle Eastern companies and their banks are still very much open for business, despite the instability arising from the Arab Spring. But with risks rising, companies want ever more visibility and control over the way they manage their cash.

Africa

Ecobank: Africa’s banking champion leaps forward

Ecobank has become the most widespread bank in Africa. Its chief executive, Arnold Ekpe, says the focus is now on revenues and efficiency. But with major acquisitions recently announced, Ecobank’s ambitions for growth have not let up. Dominic O’Neill speaks to the bank’s leadership.

The final frontier: Africa for brave investors

A growing group of fund managers are fully aware of the risky nature of African capital markets – often having themselves taken hits – but regard the opportunities as a strong counterweight to the hazards. Nick Kochan reports.

Asia Pacific

What’s behind the great China stock scandals?

The fall of the multi-billion dollar Sino-Forest Corporation is merely the most prominent show in the overseas-listed China stock scandal circus, as a colourful cast of auditors, corporate executives, exchanges, investors, regulators and short sellers argue over who’s to blame and what can be done about the alleged frauds and misdeeds now coming to light. Lawrence White follows a saga that takes in Hong Kong, New York and Shanghai.

Inside China’s investment clubs

Some of China’s wealthiest people are banding together to use their money and local knowledge to invest in the country’s growth businesses. Little is known about these groups, their investments or their returns. Elliot Wilson shines a light on the underground investment culture, and asks what chance international private equity firms have of competing against local intelligence and power.

Asian equities: Asia’s battle of the brokers

New entrants to Asia’s crowded brokerage market are spending heavily in the belief that committing fully to the region is the only way to survive. There’s a lot of money being spent, but not enough business for all of the competition to survive. Lawrence White reports from Hong Kong, Seoul and Tokyo.

Korn puts Shinawatra government on watch

The buoyant Thai economy kept motoring on through the political disturbances of the past year. But the recently elected government of Yingluck Shinawatra is already being challenged on its economic policies by former finance minister Korn Chatikavanij. Eric Ellis reports.

Asean gets bullish on regional integration

The Asean region could be the world’s sixth-largest economy but its financial systems are far from homogenous. Free movement of goods, services, investments and labour planned for 2015 should boost unity but the lack of an integrated capital market is a big stumbling block. Chris Wright reports.

Real estate

Real estate survey 2011: Can commercial real estate keep going up?

Before the US sovereign downgrade by sent the risk-on trade into a decline, commercial real estate had made big progress in cleaning up its act. Valuations are up, inventory is coming to market and new sources of funding are flowing. But will stalling economic growth knock the market off course? Joti Mangat reports.

Structured products

Banks battle for structured products business

While FICC, flow and corporate finance volumes languish, structured products and the equity derivatives that underpin them are enjoying robust growth. Global investment banks are eager to supply the products, while the need for returns and governance solutions is driving demand. Nick Lord reports.

Liquidity management

Banking news

Markets news

Asia news

Latin America news

EEMEA news

Comment

Columns

Macaskill on markets: Buffett gets the bounty with Bank of America job

Warren Buffett’s stick-up of Bank of America in late August was a classic piece of opportunistic investment. The $5 billion deal marked an evolution in Buffett’s signature approach of renting his reputation to troubled financial companies in return for a near-extortionate fee. Rather than waiting for a firm such as Salomon or Goldman to come to him begging for protection, Buffett this time foisted a deal on Bank of America.

Inside investment: The Super Glue generation

The economies of developed nations are now dangerously dependent on consumption funded by debt to spur growth. Turning the clock back to make do and mend won’t be painless but it is both inevitable and long overdue.

Editor's letter: The food time bomb ticks on

It’s easy to think with what’s going on in the eurozone that the biggest financial crisis facing the world is the future of sovereign debt. But without wishing to diminish its seriousness there’s one issue that overrides its importance: food prices.

Front End