Your world at 9am
We are not fans (Broken Promises) of Maruti’s decision to allow Suzuki to own and operate manufacturing facilities in India. But it fits into Suzuki’s bigger strategy of making deeper inroads into emerging markets. Suzuki generates 40% of its total car sales volume in India and is looking to bolster its presence in Southeast Asia. It is planning to release 30 new vehicles in emerging markets through 2017, including 14 new models in India. And apart from the factory in Gujarat, is also setting up a research and development site in Rohtak, Haryana. (Nikkei)
Here’s one for gold bugs: Silver actually was the dominant metallic standard for hundreds of years before gold. The main reason it was displaced by gold is not that gold was inherently better, but that important countries, including the U.K. and the U.S., introduced bimetallism—legally minting silver and gold into money—and did so at exchange rates that inadvertently led to the undervaluation of silver. This undervaluation eventually drove silver out of circulation as money. Gold became the money standard largely by accident. (MacroMarketMusings)
According to Nomura, from 2010 to now, something in the region of $400bn of EM debt has been issued offshore, equal to near 40% of total net EM debt issuance. Russia, China, and Brazil have the highest nominal offshore hard currency exposure and are particularly vulnerable. (FT) We had discussed the Merrill Lynch report and India’s vulnerability here.
Good luck and have a nice weekend!