Link: Emerging-Market Stocks Drop Most in Two Months on China
“The MSCI Emerging Markets Index
(NYSEARCA:EEM) lost 1.1% to 998.27 in New York, the steepest slide since July 23. Mexico’s IPC Index retreated the most in three weeks, with Grupo Aeroportuario del Pacifico SAB
(NYSE:PAC) posting the biggest decline in four months. The Shanghai Composite Index
(SHA:000001) tumbled 2.1% to the lowest level since February 2009. OAO Mechel
(NYSE:MTL), the Russian coal producer, sank 3.8% in its fourth day of losses.
“Growth continues to disappoint, particularly in China and the EU, and that is the fundamental driver of global risk perception.
"The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, declined 3.7 percent.”
Link: What Slowdown? Colombia Q2 Growth Hits 4.9%
The recently-appointed finance minister, Mauricio Cárdenas, announced Thursday in Bogotá that Colombia’s gross domestic product grew 4.9% in the second quarter, after expanding only 4.7% in a rocky first quarter that was held back by weak growth of industry, oil output, and exports.
Latin America’s third-largest economy – at least according to Colombia – has been experiencing an impressive growth in recent years, boosted by a rampant oil and coal production as well as consumer spending. The economy grew almost 6% last year, and Cárdenas forecasts an expansion of between 4.7 and 5% in 2012.
Emerging Markets Daily
Link: FUND TALK: A Closer Look at New China Dividend ETF With WisdomTree Research Director Schwartz
“WisdomTree launched a China Dividend ETF
(NASDAQ:CHXF) this week, making it the ETF firm’s second country-specific dividend ETF and the first within emerging markets.
“The company’s aim was to offer investors a different way to access the Chinese market, providing more exposure to domestic-oriented companies not to mention smaller firms than some of the more dominant China-oriented ETFs, WisdomTree’s Director of Research Jeremy Schwartz tells Barrons.com.” Barrons
Link: Food Prices Push Up Brazil’s Inflation; Unemployment Rate Dips More Than Expected
“Brazil’s September IPCA-15 inflation rose 0.48% over the prior month, higher than economists expected. The country’s unemployment rate offered a slight positive surprise, coming in at 5.3% versus economists’ estimates of 5.6%.
“The inflation data got most of the attention. Brazilians would be better off if they were vegetarians: The biggest driver were food prices, with the strongest pressure coming from beef, fish, chicken and eggs.”
The Russian Times
Link: Sberbank’s $5.2bln Placement Is Twice Oversubscribed
“The price range for the sale of 7.6 % stake in Russia’s state-owned lender Sberbank has been pushed up at 92-94 roubles ($3.01-$3.07) per share.
“While the minimum price for the sale is now 92 roubles per share, the book was reportedly covered by Monday evening in Moscow, with bids for the 1.71 billion shares on offer coming in at 93.5 roubles or higher, raising the value of the stake.
“The sale was put off last year due to unfavorable market conditions. Improving sentiment made it possible to go ahead with the sale on Monday, with Russia back on track with its privatization plan.”
Link: Pimco’s QE3 Distaste Grows as Peso Bond Bet Fades: Mexico Credit
“Bill Gross’s concern that Ben S. Bernanke is sparking a jump in US consumer prices is already sinking his bet in Mexican peso bonds.
“Yields on Mexican benchmark notes due in 2024 soared to a three-month high of 5.73 percent on Sept. 14, a day after the Federal Reserve announced a third round of asset purchases aimed at boosting economic growth. Yields have jumped 59 basis points, or 0.59 percentage point, from a record low July 20 and erased almost all the gains in the debt since Gross said in a June 19 post on Pacific Investment Management Co.’s Twitter account that he favored Mexican bonds over German bunds. German yields have climbed 47 basis points in the same period.”
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