Category: Your Money

Rising commodity prices are “triggering second-round effects via higher wages,” Alain Bokobza, the head of asset allocation strategy at Paris-based SocGen, wrote in an April 11 report titled “The EM Party Is Over.” He recommends switching to developed-nation equities from emerging markets.

“In most emerging markets, you do have these margin pressures building,” Michael Shaoul, the chairman of Marketfield Asset Management in New York, who has been shifting investments to the U.S. from emerging markets, said in an interview. “We’re fairly convinced that this monetary cycle will end in some distress.”

via BRIC Stocks’ Longest Rally Since 1997 Seen Doomed as Interest Rates Rise – Bloomberg.

Retailing employs more than 30m Indians, so some fear social unrest if the admission of foreign chains puts small shops out of business. But given India’s rapid growth there is plenty of space for supermarkets to expand without killing small stores. Such worries are greatly outweighed by the potential benefits to Indian consumers: lower prices and better quality, choice and nutrition. Economists in America talk about the beneficial “Walmart effect” that the ubiquitous cheap chain has had on curbing prices. Indians, as they fret over soaring food costs, might find such a thing a godsend.

via India and foreign investment: Fling wide the gates | The Economist.