Former U.S. Secretary of State James Baker says the country's debt problem is a "ticking time bomb." He describes the U.S. as "broke" and says if it wasn't for the dollar as the global reserve currency the U.S. would be "Greece."
(CNN) - The Moscow Stock Exchange is the latest company to trade on its own platform.
It comes after the company sold its shares at an Initial Public Offering last week - at the low end of the IPO range.
The stock began trading Friday , providing a valuation of more than $4 billion.
John Defterios sat down with Kirill Dmitriev, the chief executive of the Russian Direct Investment Fund and asked him why, despite the lukeman response, he sees potential in the exchange.
(CNN) - Former UK Prime Minister Gordon Brown tells CNN’s John Defterios that protectionism has “taken over” in global trade, while advocating an agreement between developed economies in the West and emerging markets in the East.
Brown, who was UK premier from 2007 to 2010, said the problem that Europe and the U.S. face is that both do not have a big enough share of each other’s markets.
His comments come after the U.S. and European Union announced talks will begin later this year on a multi-trillion dollar free-trade pact to boost economic growth.
On the UK’s membership in Europe, Brown said British jobs depend on the EU and the idea that Britain could leave “offends” the country’s history, economics and culture.
(CNN) - The IMF says global growth in 2013 will be an uphill climb but projects growth to reach 3.5% with emerging markets providing much of that boost. We’re already seeing signs of this through the scope of corporate earnings. In January, corporate earnings drove stock markets up, thanks in large part to emerging markets. GE’s fourth quarter revenues rose 4% beating expectations. GE cited China and other emerging economies as the driver for them. Apple reported record quarterly profits. CEO Tim Cook said in an earlier interview with Xinhua News Agency, “China is currently our second largest market. I believe it will become our first.”
While it’s not new that emerging markets are giving much-needed horsepower against the headwinds of the US and the Eurozone, it is interesting to note that countries like China, Indonesia and India still hold a wealth of untapped potential for investors. Younghao Pu, UBS chief investment officer for Asia Pacific, points out that emerging markets account for 50% of global GDP, but only 20% of stock market capitalization. That means there’s a lot of potential to grow. He believes Tier 1 Chinese cities like Beijing and Shanghai are saturated, mature markets where growth is decelerating.
“In China, multinationals need to penetrate into Tier 2 or Tier 3 cities like Chengdu and Xian where the growth rate is stronger,” Pu says. “Different companies are using agencies and I don’t think that model is building up the potential there in those cities.”
One reason for under-investing appears to be multi-layered. The business advisory group, Economist Corporate Network, recently surveyed 500 corporate clients about the current business climate in Asia. The majority of responses were from Western multinationals. According to the survey results, the companies found “murky” investment climates in certain regions, regulations that swung from unpredictable to protectionist and difficulty in finding reliable local employees.
Hans Paul Burkner, chairman of Boston Consulting Group, takes a much more optimistic approach and looks at emerging markets from the inside looking out. He recently spoke with CNN about what he calls “global challengers,” companies from emerging markets that are growing quickly. These are companies like Malaysia’s Air Asia, China’s Alibaba Group and Brazil’s building products company Tigre.
"They are fast growth, high ambition…and acquiring business models in North America, Europe and Japan. You should not be afraid because it’s not that they are coming in, sucking out all the technology and walking home. They want to really build a position (globally.)”
(CNN) – Not even six months ago, eurozone watchers had been prognosticating a breakup of the 17-member bloc of nations as the euro plunged to a 25-month low against the U.S. dollar last July.
But since then, the euro has appreciated nearly 11% as its member countries battled to contain sovereign debt crises, rising unemployment and social unrest. The euro now stands at a 13-month high against the greenback.
And flying in the face of last year’s critics, Jean-Claude Trichet, the former chief of the European Central Bank told CNN’s Nina dos Santos that the euro “was never about to collapse” and that its viability as a currency is solid.
“The euro as a currency has never been put in question,” asserted Trichet while at the same time admitting the euro area’s financial stability and credit worthiness had been tested.
But as G20 finance ministers head to Moscow this week for another summit, fears of a currency war continue to loom large. Read more here to find out the details of what Trichet calls a euro "recipe for catastrophe".
London (CNN) - Nyati tells CNN that mobile devices are unaffordable for most Africans and that connectivity is very expensive on the continent.
(CNN) - In a first for a U.S. credit ratings agency, Standard & Poor's has received official notice from Washington that it will face a civil lawsuit over imprecise ratings - now criticized as being too high by analysts, U.S. lawmakers and even S&P itself - of mortgage-backed investments that eventually contributed to the 2008 financial crisis.
Many of those investments received AAA ratings, a grade which implies highest safety and least risk, but imploded as the U.S. housing bubble burst.
As S&P awaits further word from the U.S. Department of Justice, ratings agencies Moody's and Fitch will be watching to see if they are next.
(CNN) – If you’re not South Korean, it may surprise you to know that Samsung is not just about smartphones. The hugely successful multinational has business investments in everything from military hardware to shipbuilding and hospitals. If you’re in the market for a new house you can buy a Samsung apartment. If you want to go to an amusement park there’s one made by Samsung outside the capital Seoul.
Daniel Tudor, author of Korea: The Impossible Country, tells CNN’s Matthew Chance that South Koreans view Samsung’s success with mixed emotions. On one hand, they are proud of a home-grown brand rising in prominence at home and abroad. On the other hand, Samsung has enormous economic, and thus, political clout which can lead to problems. Based on revenue, Samsung and all its interests account for a full one-fifth of South Korea’s entire economy.
(CNN) – On January 30, a Hague ruling found that a Royal Dutch Shell subsidiary was in part to blame for oil pollution of the Niger Delta. Shell had alleged that criminals – who dug up its pipelines and drilled holes to steal product – were the root of the problem.
Peter Voser, Royal Dutch Shell CEO, spoke with CNN’s Nina dos Santos with his reaction to the court finding that all “all four cases were sabotage” and “not done by Shell”. Voser added the company applies global standards to its operations and the Nigeria incident “will not change the way we do business”.
(CNN) - This week the European Union Chamber of Commerce released this survey on Chinese investor perceptions of Europe.
The study, which drew responses from 74 Chinese enterprises that have already invested in the EU, found that a full 97% would make future investments in the region; however 78% of those surveyed said they faced operational difficulties, mostly related to bureaucracy and high costs.
Pauline Chiou, CNN’s World Business Today anchor, spoke with Davide Cucino for his own reflections on the survey. The President of the European Union Chamber of Commerce said a transparent regulatory framework, good opportunities for merger and acquisition operations and a large market of 500 million potential consumers makes Europe an “ideal place to do business”.
While China demands more than a 50% stake in any Western company that sets up operations in Asia’s largest economy, the EU’s Cucino says the business environment of Europe will be “resiliently open”.
About Business 360
CNN International's business anchors and correspondents get to grips with the issues affecting world business, and they want your questions and feedback.