Emerging market taper terror ‘quite overdone’: Mobius

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Not everyone is convinced the widely anticipated pullback in the US Federal Reserve`s bond buying is sounding a death knell for emerging markets.

“This fear of tapering is quite overdone,” Mark Mobius executive chairman of Templeton Emerging Markets Group, told CNBC, even as shares in Indonesia dropped nearly 4 percent on Monday, and those in Thailand shed more than 2 percent. Franklin Templeton manages around USD 834.1 billion.

“What people fail to realize is that the so-called tapering is on top of an incredible increase in money supply in the US,” he said. “These QE programs have been cumulative. It`s not a situation where one stops and all that money goes away,” he said. “It stays in the system.”

The U.S. central bank is widely expected to begin scaling back its $85 billion per month bond buying program, possibly as early as September, in a move likely to spur rising interest rates.

“You`re going to see more money going into emerging markets,” Mobius predicted. He noted that while emerging market fixed income funds have seen net outflows recently, fund flows for the segment`s equity funds have actually been flat.

He is positive on the Asean region, expecting the region`s free trade area to offer a market equal to China`s in the long term, while increasing liquidity in Japan in the wake of stimulus there will spur more fund flows into Asean.

But Mobius is less optimistic on the outlook for India, which has been suffering from capital outflows, with its currency weakening to another fresh record low of 62.35 against the dollar on Monday. He said he is concerned about the country`s bureaucracy. “They`re just moving too slowly,” he said, adding the barriers to investment are too high.

While he still invests in the country, “it`s not at the top of the list.”

Others agree the tapering concerns may be overdone. “Climbing U.S. rates in themselves are not sufficient to knock out the region`s financial system and spark a crisis that many apparently fear,” said Frederic Neumann, co-head of Asian economics research at HSBC, in a note.

But he added, Asia can`t entirely shrug off tapering jitters. “Financial conditions have undoubtedly tightened. The result is that growth will limp along, unlikely to accelerate sharply any time soon,” Neumann said.

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I would own physical gold: Dr Doom

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Stocks are in “bubble territory,” making it a good time to move into gold, Gloom Boom & Doom Report Editor Marc Faber said Friday.

“The S&P is down 3 percent from its high, 1,709, and yesterday we had over 400 new 12-month lows on the New York Stock Exchange. That is remarkable,” he said. “That shows that the internal picture of the market is very different than what the indices show. The indices – Nasdaq, S&P, Dow – are driven by just a few stocks that are very strong. They are in bubble territory.”

Stocks closed lower for a third straight day.

Faber noted weakness in such sectors as home builders, retailers, airlines and food companies.

That made the precious metal a strong play, he added.

“First of all, I have a preference for physical gold, held in a safe deposit box outside the United States, and preferably in Asia, for a variety of reasons,” he said.

“About 10 days ago, all shares became incredibly cheap in terms of their valuation compared to the gold price, and, as you say, some experts don’t like gold.”

Faber chided gold bears for missing the precious metal’s 1999-to-2011 bull run, during which time gold prices went from approximately USD 251 per ounce to USD 1,700.

“So, I don’t think it’s all that bad,” he added.

Faber added that he doesn’t “pay a lot of attention to the so-called experts.”

“But I know other experts who are actually very positive about gold and own it for other reasons than just the price going up,” he said. “They want to have some cash in an asset that is not a financial asset.”

While Faber said that he liked physical gold, he also noted that it was “near-term lightly overbought.”

Faber also said that he had recently bought stock in Newport Mining, Freeport-McMoRan and Barrick.

As a member of their boards, Faber also owned equity in Ivanplats, NovaGold and Turquoise Hill, he added.

Stuart Frankel’s Steve Grasso liked

“I don’t have a safety deposit box in Asia, so what I do is I buy GDX,” he said. “GDX is up 39 percent from June 25. GLD is up 16 percent. I’d rather play it with the miners on the way back up.”

— By CNBC’s Bruno J. Navarro.

— CNBC’s Torrey Kleinman contributed research to this report.

Trader disclosure: On Aug. 15, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s “Fast Money” were owned by the “Fast Money” traders: Steve Grasso is long BA; Steve Grasso is long BAC; Steve Grasso is long BBRY; Steve Grasso is long GDX; Steve Grasso is long GOOG; Steve Grasso is long HERO; Steve Grasso is long HPQ; Steve Grasso is long MHY; Steve Grasso is long LNG; Steve Grasso is long MJNA; Steve Grasso is long NVIV; Steve Grasso is long PFE; Steve Grasso is long QCOM; Steve Grasso is long S; Steve Grasso is long ASTM; Steve Grasso is long POT; Steve Grasso is long DECK; Steve Grasso is long DHI; Dan Nathan is long FB; Dan Nathan is short BBRY; Dan Nathan is long VIX; Dan Nathan is short IWM; Brian Kelly is long US dollar; Brian Kelly is short Yen Bonds; Josh Brown is long TLT; Josh Brown is long AAPL; Josh Brown is long XLU; Josh Brown is long XLF; Josh Brown is long FSLR.

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September or December taper – does it really matter?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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As markets continue to speculate over exactly when the US Federal Reserve will wind down its massive monetary stimulus plan, one economist says there is too much ‘navel gazing’ over whether the tapering move comes in September or December.

“Remember, we have USD 85 billion per month in terms of quantitative easing, and we’re not talking about all of that going out of the window immediately,” said Lim Say Boon, CIO of DBS Group Wealth Management.

Even if Fed tapering begins in September at a reduction of USD 10 billion incrementally a month, which means taking off USD 20 billion in October and USD 30 billion in November, Lim said the real impact on yields won’t be much when December comes round.

“If you look at the research done over the impact of quantitative easing on US. Treasury yields, the conclusions are that each USD 100 billion of QE translates roughly to 5 basis points worth of US Treasury yield,” Lim said.

 “Say the 10 year US. Treasury yield is coming off by 5 basis points, (if we) flip it the other way around, what’s USD60 billion worth in terms of basis points? 3 basis points? Theoretically, it doesn’t really amount to much and it really is the sentiment,” he explained.

“There’s too much navel gazing over whether September or December.”

 Treasury yields have been rising since Fed Chief Ben Bernanke signaled in May that the central bank will begin a pullback of its third round of quantitative easing, put in place since September last year.

Yields on the 10-year Treasury jumped to as high at 2.825 percent on Friday, compared to the year-low of 1.632 percent hit in May.

 Lim said rising yields are a natural order of things as the US economy recovers and investors should not over react.

“Let’s go back to history. 40, 50 years: there has not been one bear market in the US. associated with the (yield curve) steepening,” said Lim.

“Simply because, typically, rising US. Treasury yields reflect a stronger economy. Stronger economies translate into stronger index earnings growth. Which is why in almost every instance, inflection points in the 10 year US treasury are associated with boom markets,” he added.

 While the recent record closes in major US. equity indices have sparked speculation that a stock correction is under way, Lim said he is not entirely convinced that the scenario will play out.

“The S&P 500 is looking stressed but that should not be all that surprising given that it has gone up fairly strongly over the past few months. (But) even on the technical indicators, the slow statistics are telling us that we might even have a little rebound. So I’m not entirely convinced, he said.

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Will spike in US yields derail Fed’s tapering plans?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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A continued selloff in US government bonds could force the Fed to rethink when and by how much it tapers monetary stimulus, according to one strategist, after 10-year Treasury yields spiked to a two-year high on Thursday.

“The rapid rise in yields could make the Federal Reserve nervous especially if it nears the 2.9 percent mark,” said Kathy Lien, managing director of FX Strategy at BK Asset Management.

“If come September, 10-year Treasury yields are at 3 percent or higher, the amount of reduction in asset purchases could be smaller and the Fed will downplay expectations for additional tapering. December is still an option but its proximity to the holidays makes it a less desirable time to reduce stimulus than September,” she added.

The 10-year yield rose above 2.8 percent, the highest since August 2011, after positive jobless claims data heighted expectations that the Federal Reserve is close to scaling back its bond purchases, prompting investors to decrease their debt holdings. Initial claims for state unemployment benefits dropped 15,000 to a seasonally adjusted 320,000, the lowest level since October 2007.

In a meeting with reporters Thursday, St. Louis Fed President and Federal Open Market Committee (FOMC) voting member James Bullard said rising yields raise some “concern.”

The rapid ascent in Treasury yields, which have climbed around 120 basis points over the past three and a half months, has unnerved investors and sent US equities tumbling overnight. Higher yields imply heftier long-term borrowing costs for corporates, which is negative for earnings.

For Richard Clarida, global strategic advisor at the world’s largest bond fund PIMCO, however, the recent spike in yields is not a concern. In fact, he believes rates will be lower by year-end than where they are at the moment.

“Most of the news on tapering is probably more than priced in to Treasurys,” Clarida said. The yield on 10-year Treasury note currently stands at 2.76 percent.

“So, if the Fed doesn’t taper in September, or they taper by less than expected, or they change their language, we think bonds are set up to rally from these levels,” he said.

Markets are pricing in that the Fed will reduce its asset purchases by $20 billion both in September and December, according to Clarida.

“It’s hard to see them tapering by more than is priced in right now,” he said.

(Read more: Worst case for Fed taper: mere market ‘indigestion’? )

Clarida is not alone in his bullish outlook for US government bonds. Jessica Hind of Capital Economics, an economic research firm, forecasts the yield on the 10-year will fall to 2.5 percent by the end of 2013.

“We think investors may have run ahead of themselves. After all, even if the Fed does start to scale back its bond purchases in September as we expect, interest rates will remain very low for an extended period of time,” she wrote in a note on Friday.

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Worst case for Fed taper: Mere market ‘indigestion’?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Markets are expected to take the much-anticipated wind down of the Federal Reserve’s massive monetary stimulus in their stride, one analyst told CNBC on Thursday, even if the move is more aggressive than predicted.

Global financial markets have suffered wild swings since the US central bank first said in late May it was considering slowing its USD 85 billion per month bond buying program.

But Mike Crofton, president and CEO of U.S. based investment firm Philadelphia Trust, told CNBC that if and when the Fed finally makes its move, it will not trigger the sharp correction that many have feared.

“I think it`s going to be a non-event. A minor taper is already priced in…the market`s not going to miss a beat,” said Crofton.

And even if the tapering is more robust than the USD 20 billion reduction in bond purchases per month most analysts are forecasting, Crofton doesn`t expect a major reaction either.

(Read more: A ‘dove-nado’ of Fed speak could be more powerful than QE )

“If they taper more than expected, then the market may have a little indigestion…if anything it will be short lived… I don`t think we are going to see any kind of correction,” he added.

An improving U.S. economy has sparked a big rally in U.S. stocks this year, driving the Dow and S&P 500 indices to record highs, and many investors now fear the tapering could dampen the upward trajectory.

But Crofton said the US stock market has enough “forward momentum” to withstand a scale back of stimulus, which is widely expected to begin in September.

“There are some great statistics underpinning this market and nothing is going to stop it,” said Crofton, referring to better housing, jobs and gross domestic product data to emerge from the economy in recent times.

“If employment improves and unemployment could start mitigating a bit… then the market could really start to see some new levels,” he said. The US jobless rate, at 7.4 percent in July, is at the lowest level in four years.

Another driver for the market will be once the much speculated `great rotation’ out of bonds and into equities, starts to gain traction, Crofton added.

“Everybody has talked about the great rotation out of bonds and into stocks, that hasn`t really started to happen, so if that does then we could see the markets going to new highs,” he said.

The S&P 500 has gained around 18 percent this year, although thin volumes in August have caused the index to pull back roughly 1.3 percent from a record high of 1,709 hit on August 2. The Dow, which has risen 17 percent this year, also scaled new heights in August.

In recent weeks, a number of Fed officials including St. Louis’s James Bullard and Atlanta’s Dennis Lockhart have voiced concerns about the impacts of the Fed tapering too soon, further fueling the ongoing debate about the timing of the move which has dominated the investment community for months.

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Onions new headache for India’s central bank?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Efforts to support the beleaguered rupee may end in onion-inspired tears.

Already struggling with its currency`s sharp drop against the dollar, slowing economic growth and investors` pullback from emerging markets, India also saw inflation rate climb to 5.79 percent in July, its fastest pace in five months and above the 5 percent economists had expected.

Food inflation rate rose to an annualized 9.5 percent in the month, led by a spike in onion prices which Citi said were up 34 percent from June. Onion prices have been rising in India as the crop has been hit by excessive rains.

(Read more: India`s ministers watch their onions )

The volatile price of onions has been credited with toppling two Indian governments since 1980, as many Indians use onions in almost every meal, and some form of bread with onion is regarded as a basic diet for the poor.

But the biggest risk from the accelerating inflation is that it intensifies India`s policy dilemma, said Vishnu Varathan, market economist at Mizuho Corporate Bank.

“We can infer from the policy moves that policy makers are prioritizing rupee stability. It`s very high on the agenda,” said Varathan.

“(But) markets are wondering whether the inclination to support growth might creep in sooner or later,” he added.

(Read more: Four reasons not to `throw in the towel` for India )

India`s rupee (Exchange: INR=) has fallen nearly 13 percent against the dollar year-to-date, brushing a fresh record low around 61.87 last week. The Reserve Bank of India has taken dramatic measures starting from July 15 to raise short-term interest rates and drain market liquidity, while the government has sought to curb gold, silver and “non-essential” imports as well as demand for oil in an attempt to shore up the rupee.

On Wednesday, the RBI upped the ante, imposing measures to limit companies` foreign investments as well as residents` outward remittances and ability to buy “immovable” property outside India. Economists have likened the moves to capital controls and said policy makers may be sending panic signals.

(Read more: Is India`s rupee back in the danger zone? )

At the same time, policy makers are facing a growth slowdown. For the full fiscal year that ended in March, growth came to 5 percent – its slowest pace in a decade.

The combination of higher-than-expected inflation and slow growth has led some economists to question whether stagflation might emerge.

“Certainly, if inflation continues to be upwardly biased for CPI and WPI and those pressures aren`t alleviated, then certainly it seems to be moving toward a stagflation scenario,” Varathan said, although he noted that rather than the traditional “external shock” driving the scenario, India`s inflation is the result of “long unaddressed” structural impediments.

(Read more: Can the new RBI chief survive India`s `poisoned chalice?` )

But not everyone is expecting this scenario.

“The combination of high inflation and low growth won`t reverse any time soon,” said Rajeev Malik, senior economist at CLSA. But, “it`s not going to have runaway inflation as such,” he added.

Malik expects the latest inflation data to dash hopes for a reversal of tightening measures.

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Sell emerging markets, but do it wisely: Roubini strategist

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The boom in emerging markets is over, according to Arnab Das, managing director of market research and strategy at Roubini Global Economics, who said investors thinking of cashing out should be careful.

“People over invested in them, the stories were overhyped, too much capital went in, asset prices were too high and there was too much credit extension. And now we’re going to see the pullback of that process,” he told CNBC Thursday.

Indonesia, Turkey, Brazil and India were among the countries which had seen excessive investment, Das indicated. He added that investors should not sell emerging markets in an “absolute sense” but should sell relative to other global developments. For example, Mexico could benefit from growth for the neighboring US.

 Luis Costa, an emerging market debt strategist at Citi, told CNBC that investors should really delve into company fundamentals to see which stocks should be sold, and not just look at headline growth statistics for countries.

“You should be looking into balance sheet health, you should be looking into budget dynamics, you should be looking into basic balance or current accounts,” he told CNBC Thursday.

Yields on 10-year benchmark U.S. Treasurys rose above 2 percent on May 22, after the Federal Reserve’s policy minutes sparked fears the central bank could start tapering off its bond purchasing program, which has suppressed interest rates.

Shortly afterwards, emerging market (EM) currencies began to tumble. South Africa’s rand has since tumbled 4.3 percent against the dollar, the Indian rupeehas fallen 10.5 percent and the Malaysian ringgit is down 8.5 percent.

Local currency-denominated EM debt has seen a similar sell-off, after a positive start to the year. Pimco’s “EM advantage local bond index” exchange-traded fund rose 5 percent at the beginning of the year, but gains have since been wiped out. Similar moves have been seen in emerging market funds from JPMorgan and BoA Merrill Lynch.

Expansionary policies – such as lowering rates or printing money – in these countries are limited, Das said, through fear of importing inflation as the currency weakens. It may not be a full-blown crisis but it is certainly a “growth trap”, he added, saying there’s a real balance sheet deterioration, especially in emerging Asia.

“One of the things going on here is a realization that the growth differential between emerging markets and developed countries is going to be narrower than it looked like in the immediate aftermath of the crisis,” he said.

 But there are tactical opportunities out there, according to Costa, with debate about how soon the Fed will taper its $85 billion-a-month bond buying giving some emerging markets a slight bounce.

“As a trade there’s something there,” Roubini’s Das added. “I would look for the most oversold markets…if you want to be a very high frequency trader and kind of trade the technicals and the flows I do agree there’s probably a bounce being made.”

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Activist investors could add buzz to summer market

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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With the stock market in a summer lull, Wall Street`s activist investors are looking downright hyperactive.

With some of the hottest pockets in the market stirred up by activism, it`s hard to ignore sudden outsized moves, but analysts say investors shouldn`t just jump on the activists` coattails without doing their own homework.

“I think you really ought to know what kind of investor you are and what your process is, so I would argue you shouldn`t be distracted by any one person,” said Bill Stone, chief investment strategist at PNC Wealth Management.

Just on Tuesday, Bill Ackman resigned from the JC Penney board after losing a high-profile feud. That stock sank nearly four percent. BeaconLight Capital separately criticized retailer Jos. A Banks for not returning cash to shareholders and said it should reorganize its board, a move that sent its stock up more than 12 percent. And to cap a day of excitement, Carl Icahn announced, via twitter, that he had bought a sizeable stake in Apple and was talking to CEO Tim Cook about a bigger share buyback program. Apple flew nearly five percent on the news.

Wednesday will be a busy day for activists, since big shareholders have to file their second quarter holdings with the Securities and Exchange Commission by the end of the day. Appaloosa landed its filing after the bell Tuesday, showing its Goodyear stake grew to 22 million, up some 6.8 million shares since March 31. That stock jumped in afterhours trading.

Experts who have followed Icahn say he` s one of the stronger names to follow. Many times activists don`t immediately reveal their holdings but work on a relationship with management to extract changes. Icahn, however, has made it clear what he wants from Apple- a bigger share repurchase program. Icahn`s other holdings include Herbalife, up 96 percent year-to-date; Netflix, up 180 percent YTD; WebMD, up 131 percent YTD, and Federal Mogul up 114 percent YHD

Charlie Tian, founder of Gurufocus.com, said Icahn typically makes out well on his larger holdings. “Not all of them go up but the important ones, the big ones go up,” he said “His second largest holding is Chesapeake Energy. He gained 40 percent on his position.”

Tian said he started the Guru tracking website after he made money following big investors in the late 1990s. A physicist by trade, he had started making big gains trading in the tech bubble.

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Is the rally in global miners too good to be true?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Even as global resource stocks have had a stellar run-up in the recent weeks, driven by signs of stabilization in China`s economy, cheap valuations and short covering, questions are building over the sustainability of this trend.

Shares of large-cap mining companies such as Australia-listed BHP Billiton and Rio Tinto and UK-listed Vedanta have rallied between 11 percent and 14 percent since mid-July.

“There has been a lot of trading money coming into the space by longer-term investors who have wanted to buy the mining space, but haven`t had the clarity because of China, falling commodity prices,” Chris Weston, senior investment strategist at IG Markets told CNBC.

“But the easy money has been made. The question now is how much more upside do we think there`s going to be,” he said.

According to Weston, further gains are likely in the near term given improving sentiment around the global economy. But beyond that, he says the outlook for mining stocks remains unclear, pointing to the risk of a selloff in commodities once the US Federal Reserve begins to taper monetary stimulus and potential oversupply in resources such as iron ore in 2014.

Nicholas Ferres, investment director of global asset allocation at Eastspring Investments, doesn`t believe this is the start of a multi-quarter uptrend in mining equities and recommends investors sell amid rallies.

“In the medium term, looming supply and weaker secular demand could be quite bearish for the sector. While this has been well documented over the past few months, it is not clear to me that it is priced into the valuation of all mining related assets,” Ferres said.

“This is not a multi-quarter rally or a new bull market,” he added.

Iron ore at USD 140 per metric ton and current levels in commodity currencies such as the Australian dollar are inconsistent with the prospect for weaker supply-demand fundamentals in the commodities space, he added.

Ferres thinks the Aussie dollar which is down 12 percent against the U.S. dollar so far this year, is still too strong relative to the health of the mining sector. The currency staged a turnaround in the recent weeks, rising around 2 percent versus the greenback since the beginning of August, driven by positive economic data out of China – the country`s top trading partner.

While improved economic indicators out of the world`s second largest economy have helped lift commodity prices and mining equities, Ferres has doubts over whether demand out of the mainland will improve substantially.

“If the new Chinese leadership is committed to structural reform, this implies that industrial demand for commodities is likely to be considerably lower than in the recent phase of China`s development,” he said.

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Is this the only way out of EM’s rut?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Since the 1980s, emerging markets have opened up to investment from the rest of the world. The combination of China`s reforms under Deng, the collapse of the Soviet Union, and the end of dictatorships in Latin America, meant a raft of enactments of new investment-friendly legislation.

Yet in the past decade, momentum has slowed.

With strong economic growth, and concerns over foreign firms repatriating profits away from domestic economies, emerging markets` zeal for foreign direct investment (FDI) reform fell away. According to the UN, at the turn of the millennium, just 6 percent of new investment-related policies increased restrictions and regulations. This has since risen to 25 percent.

With bulging emerging market current account surpluses for much of the decade, there was little need for external funding. Even those countries that required foreign investment, such as India, were attracting plenty of portfolio flows in any case.

A combination of superior emerging market growth, and ultra-low developed market interest rates sent investors on a `hunt for yield,` which has pushed more than USD 200 billion in portfolio flows to emerging markets since 2005.

But this has now changed, and emerging markets will now need to unlock the playing field for FDI.

The first reason for this is that emerging markets now need the funding more than at any point in the past decade. Growing levels of domestic debt have caused current accounts to deteriorate, meaning large surpluses have evaporated. Some, such as Indonesia and Brazil have rising deficits.

The second reason is that foreign portfolio flows are becoming increasingly unreliable. The prospect of incrementally tighter US monetary policy has put an end to the `hunt for yield.` Some USD 16 billion have been pulled from emerging market debt funds, and USD 24 billion from equity funds since May.

This has resulted in leading to tighter financial conditions for emerging market corporations and sovereigns alike.

A host of countries, including India, Indonesia, Turkey, and Brazil have been forced to raise interest rates to try and stem capital outflows and prevent inflation. These measures are necessary but higher rates will negatively impact growth.

And the latest IIF emerging market lending survey shows financial conditions for corporations are the tightest since the euro zone crisis in mid-2012.

Emerging markets are now in a difficult position of needing more funding at the same time that less of it is available.

As an interim step, emerging markets can use foreign exchange reserves to stabilize their currencies while keeping interest rates low. But, in the face of potentially tighter U.S. monetary policy, this is a risky strategy that most are unwilling to undertake.

Even Brazil, with its USD 370 billion war chest, has preferred to primarily deal with capital outflows by raising interest rates rather than aggressively spending reserves.

In the long run, the only sustainable solution is to make renewed efforts to reform FDI. Such measures will likely prove politically contentious, but will be necessary if emerging markets want to keep stable currencies, low funding costs, and consequentially maintain their economic growth trajectories.

India has made steps to embark down this path already, with the government announcing this month it will open up FDI in a dozen sectors of its economy, but regulations remain overly complex, and it is telling that despite a huge domestic consumer base, no retailer has applied for a license since the sector opened up to FDI in 2012.

Elsewhere in Asia, FDI into Indonesia grew at the slowest pace in three years in the second quarter, and regulatory uncertainties ahead of the 2014 elections could mean this slows further still.

To prevent a major drop-off in FDI, which created 62 percent of the country`s new jobs in the second quarter, politicians will need to provide more clarity on the future investment climate. Meanwhile, to ensure sustainable and efficient growth in the future, China will need to open up further to FDI in its domestic and service economy, and not just in trade-related sectors that have spurred its economy so far.

Continental neighbors such as Korea, Hong Kong, Singapore, and Taiwan all offer examples of economies that have become developed markets while remaining open to trade. It is time for other emerging markets to follow this path. From here, it is the only way forward.

Previously, Alex was the former Chief Financial Officer of the Bill and Melinda Gates Foundation and a member of the foundation`s management committee. Friedman joined the foundation following Warren Buffett`s historic gift in late 2006 and served as CFO during a period when the foundation more than doubled in size. Friedman also managed a private investment vehicle, Asymmetry, served as a senior advisor to Lazard, the international investment firm, and on the Supervisory Board of Actis, the global emerging market private equity firm. In his current role, Alex has been regularly interviewed by international media such as Financial Times, Bloomberg, CNBC, The Economist etc and contributes byline articles to the Financial Times.

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow