The growth of stock markets in Latin America

The Latin Business Chronicle published a story today which technically, was supposed to focus on the growth of Colombia’s stock exchange and explain why it was the regions best performer last year.

In addition to Colombia, the article also shares data complied by Economatica on the growth of the other major stock exchanges in the region, which is what CSA will be sharing with you today.  To read the full article from the Latin Business Chronicle click here.

Colombia – Best performer in Latam last year, IGBC (Colombia’s benchmark) stock index has grown in value by 927.9% during the past 10 years, and average decline in value of transactions in 2008 was 2.3%—lower than all other countries in the region

Brazil – Latin America’s largest stock market, Ibovespa (Brazil’s benchmark) stock index has grown 301.3% during the past 10 years, and the average decline of transitions in 2008 compared with 2009 was 13.6%.

Mexico – IPC (major benchmark index in Mexico) has grown 250.5% during the past 10 years, and the average decline in transactions last year was 13.9%

Venezuela – The Caracas stock index has grown by 916.5% during the past 10 years, and the average decline in transactions was 29.5% last year—the second worst in Latin America.

Argentina – The Merval inces has grown by 321.3% during the past ten years, and had the worst average decline in transactions last year, suffering a decline of 54.4%.

Peru – The Lima stock index (IGBVL) has been one of the regions best performing in the past few years.  Seeing growth of 671.1% during the past 10 years, and a decline in average transactions last year of 21%.

Chile – Last but not least, Chile’s IPSA index has grown by 218.8% over the past 10 years, and the average decline in transactions last year was a mere 3.6%-second best next to Colombia.

China-ASEAN FTA – CCTV

China-ASEAN Free Trade Agreement came into effect at the start of the new year.  CCTV9 reports:

When everyone’s bullish on China… be careful

Markets soured higher across the world today, Monday Jan 4, 2010… mostly on news of China’s manufacturing data, which was better than expected.  This CNBC video provides a few perspectives that are not quite as bullish and offers some good insight if you’re a China investor.

Don’t adopt a ‘buy and hold’ strategy when investing in China, advises Chi Lo, head of overseas investment at Ping An of China Asset Mgmt.

China-Peru FTA goes into force this February

China’s second FTA with a Latin American nation will become active this February 2010. A mile stone for both country’s, the agreement seeks to boost bilateral trade to new levels.

Here are the basic facts and forecasts, provided via this article from Nasdaq.com. For the record, author Sophie Kevany, is a superb journalist who is actually based in Peru. This article does not do justice to her credo of true investigative journalism I have read in the past, but no less is always a good source for all that is Peruvian finance.

Check out her other articles on the WSJ, Decanter (yes she even writes about Peruvian wines and spirits), and well, just google her name and you’ll be greeted with a swarm of informative pieces about Peru and the greater South American region.

LIMA -(Dow Jones)- Peru’s free trade agreement with China is set to come into force early February, and it is expected to boost total trade values to an estimated $8 billion in its first year.

The treaty was ratified earlier this month by a supreme government decree, meaning Peru’s congress will not vote on it, state newspaper El Peruano said Wednesday.

The treaty excludes so called “sensitive products” such as textiles, shoes and clothing, Peru’s Vice Minister for Trade and Tourism, Eduardo Ferreyros, told El Peruano.

Trade between the two countries is expected to total about $5.5 billion in 2009. Of that, exports to China from Peru are expected to reach $3 billion, Ferreyros told state news agency Andina, while imports from China should total about $2.5 billion.

-By Sophie Kevany, Dow Jones Newswires; 51-198-903-8043; sophie.kevany@ dowjones.com

China to introduce index futures

China plans to unveil its first index futures as early as this March 2010.  Bloomberg reports in this article:

The State Council, China’s cabinet, has given the China Securities Regulatory Commission approval “in principle” to introduce index futures, said the person, who declined to be identified before an announcement. The first contract, based on China’s CSI 300 Index, may begin trading after the Communist party’s annual congress in March, the official said.

Index futures would give investors in China a mechanism to profit from declines in prices for the first time, allowing them to hedge risks. That may help ease fluctuations in a market in which the stock benchmark almost doubled in 2007, slumped 65 percent in 2008 and rebounded 80 percent last year.

“For institutional investors, having stock index futures is important,” said Tony Wu, Shanghai-based portfolio manager at Martin Currie Investment Management, which oversees $4 billion in Greater China. “There will be some tools we can use to hedge risks.”

Click this link to read the complete article at Bloomberg.com

Happy New Year Asia & Oceania

Asia and Oceania ushered in 2010 a few hours ago.  Here’s a window into the celebrations which took place across the region.

CSA will start with none other than China, The country which unarguably had the most people around the world wishing one another a happy new year at the same time… Not because they have 1.4 billion people, but rather because the entire country is in one time zone, that of Beijing.  Happy New Year China!  I’ll be seeing you soon (CSA will be updated from China as of 2010).

China

Top Chinese leaders including President Hu Jintao on Wednesday watched Peking Opera at the National Center for the Performing Arts in a gala to mark the New Year. (Xinhua Photo)

Soldiers in NE China celebrate new year with local ethnic people. (Xinhua Photo)

Vocalist Kang Mao of Chinese rock band "SUBS" performs at a rock gala to celebrate the New Year in Beijing December 31, 2009. Picture taken December 31, 2009. (REUTERS)

Taiwan – China

A person holding an umbrella watches fireworks exploding from the world's tallest completed skyscraper Taipei 101 during New Year celebrations in Taipei January 1, 2010. (REUTERS)

Australia

Sydney, Australia - Celebrates New Years 2010 (Photo via Newsfromrussia)

Singapore

Fireworks light up the skyline of the financial district to usher in the New Year on Jan. 1, 2010 in Singapore. (THE ASSOCIATED PRESS)

Japan

People release balloons as the Tokyo Tower is illuminated to celebrate New Year at a countdown event at the Zojo-ji Buddhist temple in Tokyo January 1, 2010. (REUTERS)

South Korea

Christians sing a hymn during a prayer to celebrate the New Year at Imjingak pavilion near the demilitarized zone separating the two Koreas in Paju, about 52 km (32 miles) north of Seoul, January 1, 2010. (REUTERS)

Indonesia

Fireworks explode above downtown Jakarta's Welcome Monument, Indonesia, early Friday, Jan. 1, 2010. (THE ASSOCIATED PRESS)

Asia in Focus

APEC nations call for free trade

Nov 14 (REUTERS) – APEC leaders tackle climate change negotiations and economic integration, as Japanese Prime Minister Yukio Hatoyama stresses the need for free trade zone.
Penny Tweedie, Reuters

Obama seeks stronger links in Asia

Nov 14 (REUTERS) – United States President Barack Obama pushes for greater U.S. involvement in Asia, welcoming a “strong, prosperous” China.
Penny Tweedie, Reuters.

China to lead Somalia piracy fight

Nov 13 (REUTERS) – China will assume a leadership role in an international coalition fighting maritime piracy off Somalia, signaling its navy’s growing ambitions beyond Chinese waters.
Stefanie McIntyre reports.

Brazil, China Gain Clout in MSCI Emerging Markets Index – WSJ

[Source] – Wall Street Journal

The growing influence of Brazil and China in the world economy received further recognition this week when the most commonly used benchmark for emerging-market stocks increased the weighting of companies in those nations.

MSCI Inc’s MSCI Global Standard Indices said in its latest semiannual review this week that it will add 11 Brazilian companies to its MSCI Emerging Markets index at the end of the month, making Brazil the top gainer in the 22-country list. China was the second-highest gainer, with MSCI adding seven securities issued by companies in China and deleting one.

“A move like this further confirms our view of the importance of investing in small- and mid-cap names in emerging markets for investors. This increase in weighting also provides evidence that the extraordinary amount of [initial public offerings] to come out of Brazil over the past three years have, for the most part, been well received by investors,” said Ed Kuczma, an equity analyst at Van Eck Global in New York.

Brazil and China have been gaining a steady share of this marketplace segment, and MSCI is simply echoing the sentiment of many investors. “Our standard indices are just passive reflections of the market,” said Dimitris Melas, executive director in research for MSCI Barra in London.

“If China and Brazil continue to lead this [recent stock] rally, then you might see their weight and the number of companies increasing further,” he said.

Click here to read the complete story from the Wall Street Journal, by Riva Froymovich

APEC ministers sum up recovery in one sentence – Reuters

Nov 12 (Reuters) – Finance ministers take a punch at describing the economic recovery in one word or sentence.

The consensus among 21-member Asia Pacific Economic Cooperation (APEC) finance ministers was that the economic situation is better, but U.S. Treasury Secretary Timothy Geithner said it will take time to bring unemployment down and early recovery efforts must be supported.

SOUNDBITES:

UNITED STATES TREASURY SECRETARY TIMOTHY GEITHNER

CANADIAN FINANCE MINISTER JIM FLAHERTY

INDONESIAN FINANCE MINISTER SRI MULYANI INDRAWATI
PAPUA NEW GUINEA VICE MINISTER FOR TREASURY AND FINANCE

HONG KONG FINANCIAL SECRETARY JOHN TSANG

MALAYSIAN DEPUTY FINANCE MINISTER AHMAD HUSNI

NEW ZEALAND FINANCE MINISTER BILL ENGLISH

SINGAPORE FINANCE MINISTER THARMAN SHANMUGARATNAM

TAIWAN MINISTER OF FINANCE LEE SUSH-DER

SOUTH KOREAN DEPUTY MINISTER FOR INTERNATIONAL AFFAIRS

RUSSIAN DEPUTY FINANCE MINISTER

JAPAN PARLIAMENTARY SECRETARY FOR FINANCE

CHILEAN VICE MINISTER FOR FINANCE

New world food crisis looms – Reuters

Nov 12 (Reuters) – The U.N. is warning the world is on the brink of another food crisis ahead of a major international summit in Rome.

Paul Chapman reports.