Fitch Ratings says an acquisition of SABMiller (OTCPK:SBMRY) by Anheuser-Busch InBev (NYSE:BUD) that included equity funding would help the combined beer giant keep an investment grade rating.
The ratings agency notes the tie-up would lead to only a few divestments due to the relatively limited overlap of beer brands.
Currency risk would be increased for the brewer, notes Fitch, as a majority of the incoming cash comes in from Latin America, Africa, and eastern Europe - while the debit is denominated in euros and dollars.
The preliminary HSBC PMI for China rose to 50.5 in September from 50.2 in August. Forecasts had called for a decline to 50.0. It's a mixed picture, says HSBC's Hongbin Qu, noting improvement in new orders and new export orders, but further declines in employment, and intensifying disinflationary pressure.
The Shanghai Composite rose 0.9% overnight, with a gauge of industrial shares (NYSEARCA:CHII) up 1.3%.
Mexico has received its first bid from a consortium led by Alcatel-Lucent (NYSE:ALU) and Ericsson (NASDAQ:ERIC) to build its proposed $10B state-owned mobile network - an effort that will break the hold of Carlos Slim's America Movil (NYSE:AMX) on the industry.
If the consortium's bid wins, those companies could be key suppliers of mobile antennae and other gear as well as manage the network.
The U.S., joined by five Arab allies, launched the first airstrikes on Islamic State targets in Syria Monday night, marking the first U.S. military intervention in Syria since the start of the country's civil war.
The U.S.-led strikes opened the war's new front, and is on top of the extra funding approved by Congress last week to train Syrian rebels.
About 190 air strikes have already been carried out in Iraq since August.
After being threatened with severe penalties from Argentina if it does not process a $5M interest payment by Sept. 30, Citigroup (NYSE:C) has returned to court to plead its case in front of the New York judge who originally issued the injunction.
Citigroup is now seeking a stay from Judge Thomas Griesa, after an appeals court last week dismissed the bank's request to reverse the ruling.
The injunction blocks payments on $8.4B in bonds issued under Argentine law.
"The bet is simple," says Fortress Investment's Gareth Henry, speaking at a conference in San Francisco. "Between now and the election, the probability of [incumbent Dilma Rousseff] winning is going to go a lot lower than it is today."
"I actually think she loses the election," says Henry, and there will be a major rally in Brazilian assets following.
Henry's comments echo those of Fortress Principal Mike Novogratz a few months back.
"Mexico is truly a benchmark right now," says Gerardo Rodriguez, the country's former deputy finance minister, now running money at BlackRock. “Mexico is probably right there at the top of a very small list of countries that have shown willingness to reform.”
Twenty years after its most recent bailout, Mexico is rivaling Chile as Latin America's best credit risk - its CDS prices fell below Chile for the first time ever last June. Helping are government reforms like opening up the oil industry to investment and spurring competition in telecommunications are helping, and the country's debt as a percentage of GDP is expected to be 48% this year vs. a 53% average for the region and 67% for Brazil. The government of Pena Nieto predicts the reforms will boost GDP growth above 5% by 2018, a level not seen since 2010.
Commodity prices as measured by the Total Return Bloomberg Commodities Index reaches new five-year lows, hit by a strengthening dollar, the prospect of a record grain harvest in the U.S. and concerns over weakening economic growth in China.
The index has dropped more than 12% since the end of June amid falling prices for commodities such as crude oil, soybeans and gold.
Even industrial metals, one of this year’s best performers in commodities, have started to come under pressure; nickel has dropped 10% since the end of June, copper prices are at three-month lows, and iron ore trades below $80/ton for the first time since 2009.
Iron ore slumped to a new five-year low overnight as China's finance minster said not to expect anything major from Beijing to counter a recent string of weak economic data.
“The Chinese government is signaling it won’t be very aggressive in stimulating growth, and that’s scaring investors,” says a hedge funder in Rio, though it'll be upcoming elections as the main driver for the Bovespa.
The ASX (NYSEARCA:EWA) fell 1.3% in Sydney, and the aussie (NYSEARCA:FXA) is off 0.7% to $0.8865. Brazil's Bovespa is lower by 2.2%, led by Vale (VALE -4.2%).
After swearing in Poland's new Prime Minister Ewa Kopacz, President Bronislaw Komorowski announced that the new government should prepare the country for a debate over euro adoption.
"Among the great tasks (for the government) is preparing Poland for the unavoidable big debate about strengthening our position in integrating Europe, I mean the decision on eurozone membership," says Komorowski.
Poland's official stance is that it will join the eurozone eventually, but it has still not yet set a target date.