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Paul Harper
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Having spent a fair amount of time in the international telecom market, I have developed a taste for Emerging Markets. My interests tend to be focussed on telecoms, energy & commodity stocks (mostly ADRs) & country sector ETFs
My blog:
Far Side Stocks
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  • HSBC : Banking on BRIC & Emerging Markets
    HSBC has reacted strongly to retail customer demand in New Zealand by launching four new funds, entirely focused on Emerging Markets. The four NZ$ denominated funds in which customers can invest are the China Fund, India Fund, BRIC Fund & the Asia ex Japan Fund. New Zealand investors have been looking for opportunities to take advantage of the phenomenal growth in emerging markets where we have seen EEM, EWZ, FXI & IFN realising returns between 41% – 70% year to date. These markets are widely acknowledged to be the fastest growing in the world.

    “We are delighted to make this further investment in our business in New Zealand.” said New Zealand CEO, David Griffiths ”This expansion of our offering also helps to further deepen our position within New Zealand.”

    Last year, HSBC relaunched their Premier Banking service in order to offer Global Unit Trust products to retail investors in a number of territories. The strategy would seem to be paying off, as it allows customers to indulge in investing into new & emerging markets via the existing HSBC global network of 86 countries.

    “We are excited to be a part of bringing the funds to New Zealand investors” said HSBC’s CEO Asia-Pacific Rudolf Apenbrink ”providing them with the opportunity to invest in emerging markets that may typically be difficult to enter.”

    The “broader reach” of HSBC would seem to be paying dividends for the bank when compared to its peers. Barclays Capital H1 2009 profits almost doubled to $1.35bn whilst HSBC Global Banking & Markets reported record H1 profits of $6.2bn against $2.7bn last year, an, encouraging seven fold increase on H2 2008. Asia contributed about 90 % of the group’s profit in the first half.

    Meanwhile, HSBC is looking to be the first non-Chinese bank to gain a listing on the Shanghia stock exchange & has started the process for an IPO, timing is still unclear according to Vincent Cheng, Executive Director & Chairman for Asia-Pacific.

    “Emerging markets’ contribution will account for about 60 % of the total after the U.S. market returns to profit. This is our target and, of course, we would not mind if the portion from emerging markets is bigger.”

    As HSBC has a long history with & is inimically tied to Hong Kong, I can see it being able to achieve it’s aim, the choice of partner will remain open for some time. Amy successful IPO combined with the potential of Chinese retail investors to access HSBC’s global network, would have a massive impact on revenues & profitability. A big ask at the moment, but I for one will be placing a reasonable bet if & when the IPO gets clearance.

    Author holds long positions in EEM, EWZ & BCS

    Aug 12 7:58 AM | Link | Comment!
  • China looks to Africa for expansion & trade ties
    From The Australian

    THE China-Africa Development Fund, which was founded by state-owned lender China Development Bank Corp, plans to raise $US2 billion ($2.45bn) by November to help expand business links between Africa and China, CDB vice-governor Li Jiping said in Beijing today.

    Separately, China's Communist Party leaders vowed yesterday to continue their focus on steady economic growth, carrying on with an active fiscal policy and moderately loose monetary policy in the second half. 

    The politburo plan to maintain Beijing's expansionary policies is likely to damp growing calls by economists for the government to fine-tune policy to avoid future inflation or asset-price bubbles. Such calls have strengthened as economic growth in the second quarter quickened to 7.9 per cent from 6.1 per cent in Q1, amid a huge wave of government-driven lending and investment projects. 

    Justifying its expansionary stance, the politburo warned that the foundation of the economic recovery was not firm, and said many economic uncertainties remained. 

    Chinese exports continued to shrink in June, though there were signs of stability emerging. Still, the politburo noted positive economic factors, and suggested the government would increasingly focus on the quality of economic growth, rather than just the pace. 

    Wang Qing, an economist with Morgan Stanley in Hong Kong, said: "On the one hand, they want to signal that they are keeping the overall policy stance. But on the other hand, they want to ensure the quality of investment.” 

    In an interview on the sidelines of the Australia-China Bilateral Investment Seminar, the CDB’s Mr Li said the China-Africa Development Fund would raise the money for expansion from Chinese financial institutions, including insurers. 

    The fund, established in 2007 with an initial $US1 billion investment by CDB, had said it aimed to eventually increase its total assets for investment to $US5 billion. 

    Australia was also a part of the CDB's global strategy, Mr Li said.

    So basically China is investing in infrastructure projects that will ease access & operation of commodity based assets in Africa, thats payoff number one, my expectation is that they will then look to these markets to start absorbing excess Chinese prodution of consumer goods that we in the West are unable to purchase.

    Aug 12 4:40 AM | Link | Comment!
  • TeliaSonera to double stake in Turkcell to 64%

    TeliaSonera has won a court case ordering Turkish holding company Cukurova to transfer all its remaining shares in Turkcell Holdings to TeliaSonera for US$3.1 billion. Turkcell Holdings controls Turkcell, Turkey's largest mobile operator. In a statement, the Swedish firm said it now intends to enforce the award against Cukurova, and will demand damages of US$1.8 billion - a value set by the arbitration tribunal - if the shares are not delivered.

    "TeliaSonera does not yet know if Cukurova is willing to, or able to, proceed with a transfer of the shares to TeliaSonera, but a quick resolution of the ownership dispute is not to be expected," TeliaSonera said in a statement. "All in all, this issue is not expected to be resolved anytime soon. We do not expect any impact on Turkcell operations and decision making mechanism during the near future," the Istanbul-based Oyak Yatirim brokerage said in a note, reports Reuters. "On the other hand, such problems at the ownership level might have a negative impact in the longer term if tensions between shareholders intensify."

    The dispute goes back to an agreement drawn-up in March 2005, in which Cukurova agreed to sell all the remaining shares in Turkcell Holding to TeliaSonera for a cash consideration of US$3.1 billion, which would have increased TeliaSonera's effective ownership in Turkcell to 64.3 percent from 37.3 percent currently. However, Cukurova withdrew from the transaction, prompting the most recent court action.

    According to Wireless Intelligence data, Turkcell leads the Turkish market with 36.6 million mobile connections in 2Q09, a 57 percent market share. Yesterday, the operator reported a 42 percent fall in second-quarter net profit to US$245.8 million, blaming a weak local currency and provisions set aside for litigation. Sales reached US$1.398 billion, ahead of analyst expectations

    this is upbeat as far as I am concerned, as TeliaSonera has a great managment team & expertise in all the areas TKC need to become the operator in the Black Sea region

    Aug 07 10:58 AM | Link | Comment!
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