UK to be top performer among largest economies; India, Indonesia stock markets bet on new leaders; Cycling is the new golf

1 UK to be top performer among largest economies (Phillip Inman & Angela Monaghan in The Guardian) Britain will be the best performing of the world’s largest economies this year, the International Monetary Fund predicted as it conceded it had been overly pessimistic last spring when it warned George Osborne to ease austerity measures or jeopardise growth. Along with the US and Germany, the UK economy is now expected to steam ahead as consumer spending rebounds, inflation remains low and unemployment continues to fall steadily.

In its World Economic Outlook the IMF said the UK’s GDP growth would soar to 2.9% this year before returning to its long-term trend of 2.5% in 2015. Alongside a return of merger activity in the City, a booming housing market and rising employment levels, the performance of the manufacturing sector suggested the pace of economic recovery could accelerate in the first quarter from the 0.7% achieved in the fourth quarter of 2013, said economists.

But the Washington-based IMF, which also acts as a lender of last resort to bankrupt countries, did not give the UK a clean bill of health. It warned that the recovery relied too heavily on easy credit while business investment and exports remained weak. The IMF said the US and Britain will be among nations to generate growth in the coming year as the emerging economies of Asia, Africa and South America, which have driven global growth over the past decade, suffer a slowdown.

Global growth is projected to strengthen from 3% in 2013 to 3.6% this year and 3.9% in 2015, broadly in line with the IMF’s 2013 outlook. Low interest rates and a reduction in the pace of public sector spending cuts, especially in Europe, were cited as two of the main reasons for a one percentage point increase in growth across advanced economies, countering a trend for slowing growth across emerging markets.

2 India, Indonesia stock markets bet on new leaders (Daniel Inman in The Wall Street Journal) Political parties perceived as business-friendly have emerged as leading contenders in India and Indonesia, which together account for 21% of the world’s population and 3.8% of global gross domestic product, World Bank data show. Officials in the countries have been quick to take steps, such as raising interest rates and cutting government spending, to stanch the outflow of capital and bolster confidence in their currencies.

Their moves contrast with countries such as Turkey and South Africa, which were more reluctant to take such measures, and the performance of assets there has lagged. India, Indonesia, Brazil, Turkey and South Africa have been dubbed the “fragile five” because investors and analysts consider these economies to be among the most vulnerable to tightening credit conditions caused by the Federal Reserve scaling back its easy-money policies.

“Looking at countries is just like looking at a company,” said Conrad Saldanha, a portfolio manager with Neuberger Berman, which oversees $242 billion. “If you see good management making the right policy moves, that translates into higher prices.” Indonesia was one of the first developing countries to raise rates in response to portfolio-investor outflows, which weakened the currency and raised the threat of inflation. Indonesia’s central bank raised interest rates five times between June and November, taking the benchmark rate to 7.5%, the highest level since 2009.

Another reason investors have homed in on Indonesia and India is that both countries have cut fuel subsidies, a measure aimed at bringing down inflation and shrinking the current-account deficit. Government action has brought about a degree of stability after the turmoil of last summer. Fund managers poured $342.2 million into India’s stock market in the week ended April 2, the first weekly net inflow since October and the biggest since January 2013, according to data provider EPFR Global. Net inflows into Indonesia’s stock market totaled $103.6 million in the week, the most since April 2013.

The business-friendly Bharatiya Janata Party is expected to form the next government in India in May, with the party’s prime ministerial candidate Narendra Modi seen as a leader who will encourage growth by building infrastructure and fighting corruption. Investors already have cheered the front-runner for Indonesia’s presidency. When Jakarta Gov. Joko Widodo on March 14 said he would run in the July vote, ending a year of speculation over whether he would enter the race, the country’s benchmark stock index shot up 3.2% in one day and the rupiah hit its highest level against the dollar in five months.

3 Cycling is the new golf (Anneli Knight in Sydney Morning Herald) A new trend is being observed Australia-wide: cycling is the new golf. Chief executive of community cycling group Bicycle Network Victoria, Craig Richards, says in 1999 to 2000 there were 1.3 million Australians playing golf compared with half that number, or 649,000, cycling. “This trend has since reversed, with more than 1,366,000 cycling and 860,500 playing golf in 2011 to 2012,” Richards says.

“It’s really a reflection of how corporations in Australia are thinking more about physical activity and the health of their employees. It’s also a reflection of how the high flyers want to keep healthy themselves. There’s standing desks, walking meetings and now bike riding business deals – we think it’s great.” He says, “Riding and preparing for corporate ride events provides the perfect opportunity for networking and team building with like-minded colleagues and clients while discussing bikes, headwinds and training plans.”

Cycling is also an opportunity for time-poor executives to combine work, pleasure and physical and mental fitness, Richards says. Tim Simons, founder of business coaching and staff development firm Build Coaching, says cycling is seen as more of a challenge than golf and is appealing to the next generation of business brokers.



About joesnewspicks

This blog captures interesting news items from around the world for those strained by information overload and yet need to stay updated on global events of significance. The news items displayed are not in order of merit. (The blog takes a weekly off — normally on Sundays — and does not appear when I am on vacation or busy.) I am a journalist for nearly three decades.
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