GLG News by Dr. Miguel Mesquita da Cunha, Consultant
GLG News is now G+ Insights
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Falling heroes & sentimental blindness
August 1, 2006
Microsoft sees the beginning of the end for PCs | www.ft.com
The PC – around which Microsoft built its empire – is not dead, but the markets for other digital devices, which Microsoft does not dominate, are growing much faster. This should serve as a flashing amber light for Microsoft’s leadership.
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July 31, 2006
Colombia to privatize part of state oil group | www.ft.com
The Colombian government has been conducting since 2003 a coherent & successful hydrocarbon policy designed to attract foreign oil companies to Colombia. The country is thus one of the more attractive in Latin America for the oil industry, despite its relatively small reserves.
In this context, the part-privatisation of Ecopetrol is to be welcomed as a confirmation of President Urribe administration’s free-market policy, but it does not per se represent any major change of direct significance for foreign operators & investors.
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July 31, 2006
Argentina Doubles Tax on Natural Gas Exports to Chile | www.bloomberg.com
Nestor Kirchner has steered an erratic course since being elected President of Argentina in 2003. He has succeeded in restructuring of most of Argentina’s private debt in 2005 & repaying all her outstanding debt to the IMF in 2006. Yet, his domestic policy has veered towards a populist & quasi-authoritarian posture reminiscent of Argentina’s darker years.
His cavalier trade policies have antagonised neighbouring Chile, Uruguay & Brazil. He has also fallen in Venezuelan President Hugo Chavez’ embrace, a convenient means to postpone unpopular economic reforms.
Bolivia, Venezuela, Argentina & Cuba are coalescing in their opposition to the USA. Others, like Mexico, Peru, Costa Rica & Ecuador have elected pro-US leaders, but with a wafer-thin majority which may compromise the stability of their administrations. Leaving aside Colombia, pro-US but still prey to drugs-financed terrorism, the only havens of political stability, legal certainty & business-friendly policies in Latin America are Brazil & Chile.
There is little doubt that Brazil & Chile, stable, sophisticated & dynamic, should be the countries of choice for any business with, or investment in, Latin America. -
July 31, 2006
China eyes stronger military against threats | www.washingtonpost.com
China’s military expenditure is around $40 bn & growing at above 10% per annum. Her military might is scrutinised by all countries in the region, & it upsets many of them. Countries like India, Japan, South Korea & Taiwan are consequently bolstering their own defences.
We are not, however, at the stage of a fully-blown arms race in South & South-East Asia, because & insofar as regional countries count on the USA to ensure continued regional stability & the security of vital sea lanes.
As the world is growing less stable, it is quite likely that, budgetary constraints notwithstanding, US military expenditure will continue to grow apace. In the end, China’s military advances will lead to further US defence spending.
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Alcohol abuse: the industry’s preventive moves
July 28, 2006
Trouble brewing for Europe’s consumers | www.brewersofeurope.org
The European Commission, concerned with the economic & social costs caused by alcohol abuse, is preparing a joint EU alcohol strategy. The drinks industry is trying to forestall any such initiative. The Union of European Brewers has commissioned a study by the Weinberg group which states that "EU wide policies with respect to responsible use of alcohol are neither called for nor expected to work".
This is but a skirmish in what is likely to grow into a major political battle pitching the drinks industry against the EC & a number of pressure groups & NGOs. Expect the European Parliament to be keenly lobbied by both sides.
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New guidelines for European cross-border energy networks
July 27, 2006
TEN-E Guidelines specify a European-wide energy transmission network | europa.eu
New guidelines adopted by the EU Council of ministers on electricity & gas networks interconnection will render regulatory authorisations easier & increase incentives for private investors. The guidelines identify projects representing a total investment of 28 bn euros.
The guidelines are a new step towards a more integrated & competitive energy market in the EU, which is a key objective of the European Commission. Market participants seeking to expand their cross-borders activities have a natural ally in the EC when contending with national regulators & incumbent utilities. -
May 30, 2006
Boehner won't push to cut ethanol tariff | www.washingtonpost.com
The Romans knew one thing or two about destructive politics - & their consequences: Quos vult perdere Jupiter dementat - those whom Jupiter would destroy, he first makes mad...
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Arcelor/Severstal v. Mittal: Steeling the company for political risks
May 30, 2006
Steel consolidation | news.ft.com
Arcelor announced a deal with Moscow-based Severstal that would effectively thwart Mittal steel's €25.8bn bid for Arcelor.
As it stands however, the deal appears to undervalue Severstal's assets & to make a mockery of proper corporate governance. More importantly, given Russia's unpredictability, the deal would put the combined company at considerable political risk, something which Mittal's offer do not entail. That alone would justify demanding a considerable premium from Severstal.
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2006: a (Web)Space Odyssey for Advertisers
May 30, 2006
Advertisers are struggling to reach webwise teens | news.ft.com
Teenagers have stopped being passive media consumers. Their mastery of technology allows them to watch what they want, when they want, where they want.
The advertising industry, & marketing in general, are thus confronted with arguably their biggest challenge ever: to switch from a “push” to a “pull” model. Consequently, both alliances between companies in germane industries, & the 'rules of engagement', are shifting very fast.
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Turkey: where Islam & the West meet
May 25, 2006
Country's business elite and rulers drift apart | news.ft.com
Turkey is arguably the sole Muslim country in the whole Eurasian area which has steadfastly embraced a modernist, pro-Western vision & practice of Islam, whilst remaining a functioning, (albeit imperfect) democracy. Turkey's evolution is therefore of extreme significance for the co-existence between Islam & democratic modernity.
Surfacing tensions between Prime Minister's Recep Tayyip Erdogan's administration & the business elite are no cause for alarm, but they come as a timely reminder of the centrality of Turkey in the West's relations with the Muslim world.
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Indian Pharmacist, heal thyself...
May 22, 2006
With patent reform, India can be a medical innovator | news.ft.com
India's unique brand – high-quality intellectual power at modest cost – can make her as much of a powerhouse in biotechnology, chemistry and pharmaceutical science as she already is in IT, if only she amended her intellectual property laws.
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No diplomatic dicing: let's just do what is right!
May 22, 2006
Internet Gambling | www.wsgc.wa.gov
Taking pretext of this Washington State law to flout the WTO Appellate Body ruling on Internet gambling, or simply to arm-twist smaller countries, may conceivably yield economic gains – but at a considerable diplomatic & moral cost.
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Bad for Stamps, Good for Banks
May 22, 2006
Stamp of Disapproval | yahoo.smartmoney.com
Regardless of what happens to Escala itself, the main beneficiaries of the current fiasco are likely to be the best-renowned Iberian banks, provided they tailor their marketing adroitely in the months to come.
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May 19, 2006
Energy companies raided in EU antitrust probe | news.ft.com
The European Commission has determined to intervene forcefully in the field of European energy policy. It will apply its legal competition-related powers, & employ its political influence, as a double-headed prod for EU member states to implement a coherent & comprehensive security-oriented energy policy.Despite certain litigation from incumbent companies & furious political opposition from some member states, energy is now one of the topmost items in the Commission's agenda.
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Nuclear energy: activities v. activists
May 18, 2006
Green light to new fleet of N-reactors | news.ft.com
The British Prime minister has started preparing the country for a government decision to launch a new fleet of nuclear reactors.
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The next Tsunami: Asian knowledge
May 17, 2006
The Asian giants and the brains bazaar | news.ft.com
Scientific & technology knowledge is steadily becoming a commodity. Ensuing pricing pressures will force drastic changes in the organisation & operation of companies in almost all industries.
As Western democracies thus loose their prime economic comparative advantage, it will require supremely sagacious public & private leadership for them to remain prosperous & powerful. -
May 17, 2006
Chinese injection machine giant to build electric machines in Germany | www.polymer-age.co.uk
Indian companies are making similar inroads.
They typically tend to understand cultural diversity & to respect local sensitivities, a trait that oils the wheels during & after the acquisition process [the Mittal/Arcelor tug-of-war notwithstanding].
Expect more Indian purchases in the years ahead, mostly in IT services, games & animation, & pharmaceuticals. -
A fundamental form of productivity improvement
May 15, 2006
Bosses with "no time to be nice" | news.ft.com
Lack of respect within a company leads to staff disaffection & attrition, with severe consequences for productivity, quality & relations with customers. Yet, far from being alert to the problem, some managers compound the issue by their very behaviour.
It behooves the top leadership to set the example; to discern if despise is rampant in their company or organisation; & if so, to strive inequivocaly for decent human relations within the company. After a while, the effect on the bottomline, albeit indirect, can be staggering. -
May 15, 2006
Drinks industry targets Brussels plan on alcohol | news.ft.com
European authorities, at both the EU & national levels, are gearing up for a thorough public-health oriented review of the alcoholic drinks industry.
Its outcome will significantly affect the taxation, marketing & retailing circumstances of the industry.
Experience of past policy debates touching public health suggest the industry would be well advised to reach out early to Brussels-based civil society organisations & to adopt both on form & on substance a responsible, constructive attitude. A legalistic, self-defending stance could prove a costly mistake. -
Too bad for Europe, but an opportunity for others
May 15, 2006
Asia and US lead way on nanotech patents | news.ft.com
There is much to be gained by nimble-footed companies in mining the output of European nanotechnology research for patentable results.
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