Russell Introduces New Emerging Markets Index; Slow Growth in India Hurts Forecasts

By Alex Brokaw  SEP 13, 2012 1:15 PM

Plus, Indonesia attempts to build a national credit card payment system


Our weekly roundup of the most interesting news on emerging markets relevant to investors.

Emerging Markets Daily
Link: Russell Introduces New Index to Play Emerging Markets Through Developed World
“Different indicies mean differences in performance. The Vanguard MSCI Emerging Markets Index ETF (VWO) is up 8.5% this year and 3% over the past year while the FTSE RAFI Emerging Markets Index (PXH) is up 6% this year and up 1.4% over the past year.

“Russell Investments, which significantly downsized its ETF business last month, introduced another option for investors interested in emerging markets.  Its Russell Geographic Index series identifies companies with significant exposure to targeted geographic regions or countries — a.k.a playing emerging markets without leaving the developed world.”

Global Post
Link: Forecasts Bleak as India's Growth Continues to Slow
“India's economy grew just 5.5% in the quarter ended June 30, a serious climbdown from last year's 8% and only a modest bump up from the 5.3% recorded in the previous quarter, according to the Associated Press.

“Analysts at Morgan Stanley (MS) were not amused. The investment bank cut India's economic growth forecast for 2012-13 to 5.1%on Monday, citing a combination of weak external demand, low private investment and poor government finances, Reuters reported. That's the lowest prognosis yet, though economists at Citi, CLSA, CRISIL have also slashed their forecasts, the agency said.

“Morgan Stanley had previously forecast 5.8% growth for India in the year ending March 31.”

FT beyondbrics
Link: Indonesia Credit Cards: Going Solo
“Bank Indonesia, the central bank, and a number of major state-owned banks are trying to breathe new life into an old proposal to develop a national credit card payment system to break the dominance of MasterCard (MA) and Visa (V), as has been done in China with UnionPay.

“Although there are still only around 7m credit card holders and 15m credit cards in this nation of 240m people, the numbers are growing by around 7% – 8% a year as the large middle-class continues to expand.”

Link: Jaguar Land Rover Postpones Plans to Build Plant in Brazil

Jaguar Land Rover (TTM) has postponed its plans to build a new plant in Brazil due to the recent changes in tax rules for foreign companies.

“JLR’s chief executive Ralf Speth announced that the company has halted the investment in Brazil after the court decided that regional governments in this country could not use tax breaks to attract investors to their states.”

Link: Thai Billionaire Bids for F&N in Hurdle for Heineken in Asia
“Thai billionaire Charoen Sirivadhanabhakdi made a S$9 billion ($7.3 billion) bid for the 70% of Fraser & Neave Ltd. (F99.SI) he does not control, potentially blocking Heineken NV (HEIO.AS) from buying the company’s beer business.

“TCC Assets Ltd., linked to Charoen’s Thai Beverage Pcl (Y92.SI), offered S$8.88 a share for F&N, TCC said in a filing today. The bid is 4.3% more than F&N’s closing price yesterday and values the company at $10.3 billion.

“Charoen, 68, set off a scramble for F&N and its assets when he agreed to buy a stake in the company in July. Heineken countered with a bid for F&N’s 40% stake in Tiger beer maker Asia Pacific Breweries Ltd. (A46.SI), which the Dutch brewer already partially owns.”

Business News Europe
Link: CORRUPTION WATCH: Russia’s Bribe Size Up 33-fold Since 2008

“The size of the average bribe in Russia has increased 33-fold since Dmitry Medvedev launched his anti-corruption drive in 2008 following his election as president that year.

“Russia’s nationwide anti-corruption community outreach office, Clean Hands, which is part of the Russian Association of Lawyers For Human Rights, published its fifth report on corruption in the country at the start of September and found the average bribe has increased from RUB9,000 to RUB300,000 ($300 to $10,000) between 2008 and 2012, reports Kommersant.”

Twitter: @brokawbrokaw
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