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| Chinese Premier Mr Wen Jiabao in Dubai, near Armani Hotel, Burj Khalifa on Jan 17 2012 |
I consider him to be the MOST powerful man in the world today, even more than US President Obama!
Picture of the Chinese Premier attached while visiting Saudi, Abu Dhabi and Dubai.....
......in search of oil to replace Iranian oil in the event US-Iran crisis escalates any further, since China imports almost 25% of Iranian oil amounting to 500,000 barrels per day from the 2m barrels produced by Iran daily!
Although, I am betting that US is backing off....
1) considering that they have delayed their military exercise with Israel this week in the Gulf due to 'budgetary constraints' until further notice AND
2) they have given 6 months to everyone while sanctioning Iranian Central Bank for oil export embargo which clearly is a sign of weakness. I mean if you wish to sentence somebody you have to do it immediately and not AFTER 6 months!
3) Plus USA is very worried that Iranian sphere of influence is strengthening in Latin America (USA's traditional backyard which until recently was under USA's thumb) since Iranian President visits Venezuela, Cuba, Ecuador and Nicaragua every year and is building stronger ties in the region and enhancing trade while gaining international strength and support since Iran is the only country defying USA openly - despite all the sanctions and he is received extremely warmly in these 4 countries!
4) China and Russia have announced that they will veto any UN resolutions against Iran. While China and Russia have doing more business between each other, but they are tacitly supportive of Iran since they supply major arms and aircrafts to Iran and purchase oil from Iran. For example, China buys more than 25% of Iran's oil.
Meanwhile.....China also saves India!
This is a very good news for India's USD denominated convertible bonds issued by hundreds of corporate issuers, 400 approx, to be more precise, that China has supported Reliance Communication, owned by Indian billionaire, Anil Ambani and provided his company a loan of USD 1.18bn at 5% for 7 years through 3 major Chinese banks.
I was very worried that this USD 1.5bn repayment coming due on Mar 1 2012 may default since this is the LARGEST bond repayment in USD by ANY Corporate issuer from India. Everyone in the institutional category was focused on this maturity being one of the largest corporate houses in India with the largest single bond size in India.
This convertible (FCCB) bond was issued by Reliance Communications during the peak of India in 2007 for 5 years at INR 44.11 (todays INR/USD rate is at INR 51.00, hence a loss of 15.62% plus 27% interest for a total increase of approx 42.62% from a sum of USD 925,300,000 outstanding, approx USD 1bn, hence a payment amount of approx. USD 1.42bn was required on Mar 1, 2012).
With conversion price established at INR 661.23 at issue time in 2007, todays price is at INR 89, which indicates very strongly, that no investor would convert into equity, hence the zero coupon bond issued at USD 100.00 shall redeem at USD 127.69 almost mandatorily, except for a default, which has now been averted. Bond trades at USD 123 level today (since maturity on 1 Mar is at USD 127.69 and has increased steadily from USD 115 levels in Oct.
It is with a huge sigh of relief, that we all rejoice that there is ONE backstop to this world's debt problems called CHINA!
Thank God for China, else, I wonder what would, Europe, Japan, Australia, India, Middle East, Africa and Latin America and of course USA, do!!.... Chuckle..chuckle... but hey, China also has to save itself so that makes it the saviour of the ENTIRE world!
And some people doubt that China will not rise but may collapse...though the facts state that it continues to help almost every single country around the world!
Question is: How could China fail, if it is still helping others with billions of dollars?
The facts are that USA's Secretary of Treasury, was in China last week, probably on a quarterly trip since last few years.
The Spanish and Brazilian Presidents were in China in Apr 2011.
The VP of USA, Joe Biden, visited China in Aug 2011.
The President of France and Romania were in China in Aug 2011.
The President of Pakistan was in China in Aug 2011.
The Sri Lankan PM visited China in Sep 2011.
Chinese PM visited India in Dec 2010 while Indian PM visited China in April 2011 to attend a BRICS meeting.
UK PM David Cameron visited in Nov 2010 and Chinese PM visited UK, Germany and Hungary in Jun 2011.
The Head of EFSF Fund from Europe was in China in Oct 2011.
While Russian President, Putin visited China in Oct 2011 to sign some gas deals.
Japanese PM was in China on 25 Dec 2011 to sign CNY-JPY agreements to avoid USD trade.
As of today, the S. Korean President has just landed in China for a visit. The North Koreans have visited twice after many years in 2011 due to change of leadership and the death of the erstwhile N. Korean President.
And the Canadian PM, Stephen Harper is expected to visit China in Feb 2012.
While guess where the Chinese PM is on Jan 17, 2012..... in UAE, visiting Saudi and UAE!
Stay tuned...
By Anurag Joshi and Mehul Srivastava - Jan 18, 2012 10:29 AM GMT+0400
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