IGAF Latin America & Caribbean

Asociación Interamericana de Contabilidad - Federación de Colegios de Contadores Públicos de Venezuela

2008-11-08T19:58:00.000-02:00

Deseo agradecer muy sinceramente al Sr. Presidente Lic. Rafael Rodríguez Ramos y al Sr. Secretario de Estudios e Investigaciones, Lic. Rafael J. Dugarte Rivas, de la Federación de Colegios de Contadores Públicos de Venezuela, la invitación que me han cursado para brindar una conferencia sobre:

Control de Calidad de las Firmas Auditoras

en oportunidad de celebrarse el Seminario Interamericano sobre la Estandarización de la Información Financiera, en Isla Margarita, Estado de Nueva Esparta, organizado por la Asociación Interamericana de Contabilidad (AIC) y la precitada Federacíón.

Información sobre la AIC

La Asociación Interamericana de Contabilidad (AIC) se constituyó en 1949 con el objetivo principal de unir a los Contadores Públicos del continente americano, asumir el compromiso de su representación en el hemisferio y promover la elevación constante de su calidad profesional, de sus conocimientos y de sus deberes sociales. Se incorporó en 1974 bajo las leyes del estado Libre Asociado de Puerto Rico. Desde 1949 hasta esa fecha, la AIC existió con el nombre de Conferencia Interamericana de Contabilidad.

En el transcurso de su medio siglo de trabajo institucional, la AIC ha contribuido a fortalecer las organizaciones profesionales de Contadores Públicos en los países americanos que la patrocinan y participan activamente en desenvolvimiento armónico de sus conceptualizaciones y de su práctica.

A la fecha ha cumplido con su misión de ser la entidad de carácter profesional que une a los Contadores Públicos del continente americano, representados en cada país por organismos profesionales de libre agremiación.

La profesión contable debe sentirse orgullosa por haber logrado organizarse a nivel internacional y trabajado a un nivel de efectividad que es igualado por muy pocas organizaciones profesionales.

Argentina: Pension Fund Fallout

2008-11-03T21:24:00.001-02:00

BY LATIN AMERICA ADVISOR
Inter-American Dialogue

Argentine President Cristina Fernandez [recently] announced a plan for the government to take over the country's approximately $26 billion in pension funds. Fernandez has said she wants to protect the funds from turmoil in the global financial markets. What other factors are motivating the government’s action? What would be the impact of the pension takeover on Argentina's economy? How would it affect government spending and Argentina's credibility among investors?

José Octavio Bordón, former Ambassador of Argentina to the United States: In 1994, the state pension system, which had reached a point of crisis, was privatized at the peak of the Washington Consensus. Many of us who believed in the necessity of democratizing both society and the economy objected to the 'anticompetitive, statist, and compulsory' design of this privatization. The high costs of administration, interferences of a number of governments, and the crisis in the international financial system have generated a significant drop in total amount of capitalized funds. The state had to back them up with budgetary resources. In Argentina, the Pension Fund Administrators (AFJPs) have earned more than $12 billion in profits. There is a broad consensus on the need to transform the Argentine pension system. However, the government should avoid passing legislation too quickly. There are many technical and political concerns, especially regarding the future use of $30 billion in stock. In addition to avoiding the errors of the past, it is necessary to act now with greater prudence and institutional quality. In play are the millions of current and future retirees, the rights of Argentines who opted for the private capitalization and legal safeguards for the companies who acted within the current legal framework. During times of crisis, it is both a necessity and a right to assure that changes guarantee the well-being of citizens, but it shouldn't be an excuse to disregard people's rights and endanger the credibility of the country. A broad debate, both respectful and transparent, needs to happen in the Argentine Congress, similar to that which occurred over the taxes on the rural sector. This is the best road toward change, with legitimacy and legality both in the international and domestic context.

Milko Matijascic, Head of the Institute for Applied Economic Research at the UN Development Program's International Poverty Center in Brasilia: Pension reform is a complex problem in South America. First, local financial markets were small and couldn't easily absorb such a large volume of funds; second, with large informal sectors and low contribution densities, large numbers of workers are not generating sufficient savings to fund their retirements; third, with defined contribution schemes, market risks fall upon the shoulders of individual workers. As one considers the current crisis, these factors are critical. By October 20, the average pension fund fell 16 percent compared to the average value in 2007. A steep market decline and a precarious labor market would lead to poor returns for the pension system. Ironically, the debate in Argentina did not touch upon these three factors. The government appears motivated by fiscal concerns. If the pension funds' resources are taken over by the government, it may provide short-term relief, but at the expense of significant problems in the long term (including loss of credibility). Such drastic reforms should be preceded by extensive public debate and deliberation. This is the approach that Chile took as the Bachelet Administration achieved consensus prior to its landmark reform earlier this year.

Claudio Loser, Senior Fellow at the Inter-American Dialogue and former Head of the Western Hemisphere Department at the International Monetary Fund: The announced nationalization/expropriation of the Argentine pension funds constitutes one of the most blatant acts of financial piracy in the country's recent history. In terms of its gravity, it stands on par with the freeze on deposits of the banking system introduced at the time of the collapse of convertibility (the relation of one to one between the local currency and the US dollar). Contrary to the alleged claim that, once approved by Congress, it will protect the pension money saved by many Argentines, the action is intended to provide the government with fresh resources to solve its mounting fiscal problems. The proposed expropriation would eliminate individual savings, and convert them into a pay-as-you go system, with large funds that could be spent almost freely by the Argentine government. The transfer is equivalent to 10 percent of GDP, plus an annual flow of pension contributions equivalent to about $5 billion (1.5 to 2 percent of GDP). The unexpected and ill-designed plan has brought the financial system into crisis, with a precipitous decline in the stock market, pressures on the exchange rate, and a sustained loss of reserves at a time when Argentina is facing a drastic decline in export prices. Argentina was being shunned by foreign creditors and investors before this measure but it is now considered in virtual default, with grave and possibly unintended consequences on the country's economy.

Robert C. Helander, Managing Partner at InterConsult LLP in New York: Where to start on Argentina? After repeated demonstrations of fiscal sinverguenceria, one wonders how any government in Argentina will ever be able to convince its own citizens that their elected leaders can be trusted. Years ago, in an effort to attract foreign capital, the government guaranteed national treatment for foreign investors. Some invested on that premise, and they surely got the 'national treatment,' pesification, phony statistics, pressure to invest in government paper, etc. If Peronist government after Peronist government has mismanaged the economy and maltreated its own citizens, it is hard to think that any foreigner, save for the politically-motivated Venezuelan leader, might invest. As for lenders, there is no way to quantify the moral hazard. Absent a multinational bailout, another devaluation and default will be hard to avoid. The proposed 'protective measure' of nationalizing the private pension funds would only delay the deluge and make it that much harder for a future president to regain internal balance and respect. Do cry for Argentina; it is a sad story without a visible good ending.

Mexican Miner Takes IPO to London

2008-04-14T01:27:00.000-03:00

Penoles, the Mexican mining giant, plans to carve out its precious metals unit, to be called Fresnillo, and list it on the London Stock Exchange. The total offering, slated for May, is estimated at roughly $2bn and will include $900m worth of primary shares, say executives close to the process. JPMorgan Cazenove is the lead on what the issuer says will create the world’s largest primary silver producer. The decision to list in London is an unfortunate one for LatAm exchanges like the Mexican Bolsa, or the Bovespa-BM&F, which would have benefited from such a high profile and sizable deal. The latter has made no secret of plans to consolidate LatAm liquidity on a single platform. “The decision to list in London was made a while ago, and based on the fact that other big mining names such as BHP Billiton, Rio Tinto and Anglo American are listed there,” says a banker familiar with the deal. Peru’s Hochschild Mining listed itself on the LSE in 2006, also via JPMorgan. The deal is timed to coincide with record highs for gold and silver, the company’s main metals. “They’re carving it out to realize untapped value in the company,” says a banker close to process. He notes that within Penoles, the operation has a lower multiple than it would on a standalone basis. Citi, Canacord Adams and UBS will be co-managers on the equity deal. Peñoles intends to retain at least 75% of the ordinary shares of Fresnillo plc on completion of the offer.

LatAm Equity Funds Make Decent Return

2008-04-14T01:23:00.000-03:00

LatAm equity funds returned 1.28% in the week ended April 10, according to Lipper. China region funds sank 0.46%, while EM funds rose 1.26%. The biggest gains were made by gold oriented funds with 2.08%, while Japanese funds dropped the most, with a loss of 3.11%. LatAm outperformed the world equity funds group, which overall sank 0.30%. They are up 3.11% year-to-date.

UK Manager Readies New LatAm Funds

2008-04-08T05:54:00.000-03:00

BlueCrest Capital Management, a London-based asset manager with $14bn under management – $2bn of which is in EM – is preparing to raise two new funds to take advantage of the opportunities it sees in EM. "Its a combination of market technicals, driven by balance sheet repair in the global financial system, as well as solid fundamentals in EM," Robert Enserro, portfolio manager at BlueCrest, tells LatinFinance, explaining the timing for the two new funds. Bluecrest which invests in multiple asset classes, is raising $150m for a 5-year targeted opportunity in LatAm fund and $250m for a 3-year opportunities investment pool focused on LatAm and EEMEA. They will invest in private debt and equity. BlueCrest has invested in a number of pre-IPO companies in LatAm.

IIF Sees Moderate Growth Deceleration

2008-04-07T15:42:00.000-03:00

New data from the Institute of International Finance (IIF) predicts a moderate slowdown in growth across the board in LatAm through 2009. Regional expansion is forecast to ease to 4.4% in 4.1%, respectively, in 2008 and 2009, from 5.3% last year. This includes a decline this year to 2.7% in Mexico (versus 3.2% in 2007) and 4.6% Brazilian growth, from 5.4% last year. However, the IIF foresees a pickup in Mexico to 3.5% next year. Peru is set to fall from 8.5% in 2007 to 6.5% and 6.0% in the next few years, while the corresponding figures for Argentina are 8.7%, 6.8% and 4.2%, and for Colombia 7.1%, 5.1% and 4.5%. Inflation is meanwhile set to hit 6.4% this year, up from 6.0% in 2007 and 4.8% in 2006, says the IIF. It expects monetary policy to hold or tighten in coming months in Brazil, Chile, Colombia and Peru. Mexico meanwhile looks set to ease in the second half. “Most of the countries have shown solid growth in their economic activities and most of it comes from the domestic demand. Investors are optimistic,” says Carola Sandy, analyst at Credit Suisse.

Equity Markets Face Challenging Months

2008-04-05T18:02:00.000-03:00

LatAm equity has outperformed other EM in the past month and quarter, but the next two quarters may be more challenging. “The short term outlook is more uncertain for LatAm equities,” says Geoff Dennis, head of equity strategy at Citi, referring to a 3-4 month timeframe. “If the global market continues to be weak, LatAm stands a chance of underperforming because it’s done so well until now,” adds the strategist. Bearish and volatile trading would keep the roughly 20 equity issuer hopefuls – mostly from Brazil – stuck in the pipeline. In the longer run, however, Citi maintains a bullish call on the region. It is constructive on EM and global equities if the US economy manages to turn around in the second half. The outlook for a continued up trend in commodities is still very positive, says Dennis. He notes that despite strong improvements in the region’s fundamentals, LatAm strength is largely supported by firm commodities, with oil, iron ore, copper, gold and pulp among the chief benefactors. LatAm stocks outperformed global EM in March for a seventh consecutive month, according to Citi, which points out the last time that happened was 1997. Brazil’s main equity index, the Bovespa, underperformed LatAm in March, falling 7.8% on the heels of an 11.9% surge in February. Peru dropped 5.1%, while Chile was the region’s strongest riser, gaining 7.7%, says Citi. Argentina and Mexico also had a positive March, rising 5.8% and 5.7% respectively.

DLJ Raises $300m for South America PE

2008-04-02T17:21:00.000-03:00

DLJ South American Partners has started allocating from a new $300m private equity fund. The firm’s main principals, Buenos Aires-based Carlos Garcia and Marcelo Medeiros in Sao Paulo, are heading the effort and have already spent $82m across three deals. “Capital markets liquidity has dried up recently in Latin America and we believe that enhances our opportunities to identify investments going forward,” Garcia tells LatinFinance. The firm will employ various strategies, including buyout and growth capital, across all sectors. It will look to take controlling stakes in companies in order to gain greater influence over management and the exit strategy, says Garcia. The executive declines to specify by when he expects the $300m to be spent, though he speculates that given the number of opportunities, it may be a lot sooner than the fund’s mandated 5-year horizon. DLJ has invested in LatAm for several years from its global fund, but this is its first dedicated vehicle. DLJ South America Partners is a joint venture between Credit Suisse and the management team that was set up in late 2006 to target deals in South America. Since then, the entity’s three deals have been: Arcos Dorados, the LatAm McDonald’s business; Fispal, a food and beverage trade show promoter, of which it acquired 100%; and EBEC, an educational company in Brazil. DLJ joins a number of other PE shops raising new funds for the region, including Advent International and the Carlyle Group.

UMS Brings $1.25 in Exchange Warrants

2008-03-28T04:18:00.000-03:00

Mexico plans to sell warrants with a notional value of $1.25bn that will allow investors to exchange foreign currency debt for peso debt. On April 2 and 3, investors will be able to purchase two types of warrant that allows them to trade in 21 series of dollar, euro, deutschemark and Italian lira-denominated bonds with maturities between 2009 and 2034 for local bonds. The first warrant has a notional value of about $1bn and offers peso-denominated bonds due 2014, 2017 and 2036. The second is worth roughly $250m and offers 2017 and 2035 debt denominated in UDIs. Holders of the warrants will be able to receive their new bonds on October 9. This is the first Mexican warrant transaction to allow swapping into UDIs, as well as the first time the liquid global 2034s will be involved, according to a banker on the deal. This is the fourth sale of warrants since 2005. The government has exchanged more than $4bn in foreign-currency debt for peso bonds in the last two years. Barclays and Merrill Lynch are managing the transaction.

Peru to Prepay IDB, World Bank Debt

2008-03-25T00:05:00.002-03:00

Peru plans to prepay about $1.1bn of its debt to the World Bank and IDB by mid-year, according to local news and wire reports citing finance ministry official Jose Miguel Ugarte. It will use treasury funds to finance the repurchase of $620m in debt from the World Bank and $497m from the IDB, and is also considering the sale of new PES-denominated debt. Peru repurchased $838m in outstanding Brady bonds March 7. The planned buyback will be Peru's biggest since a $1.8bn repurchase of Paris Club debt in July.

Cresud Raises $288m in Rights Offering

2008-03-23T17:18:00.001-03:00

Cresud, the Argentine holding company for IRSA and a number of agricultural assets in Brazil and the Southern Cone, completed a rights offering with existing investors Tuesday that grossed it $288m through the sale of 180m shares. The deal saw strong demand from existing shareholders, which meant new investors could not participate in the offering, Alejandro Elsztain, CEO, tells LatinFinance. Of the total shares offered, 60% were distributed in the form of ADS at $16, while the remainder was sold in the form of locally listed stock, at ARP5.04. Both the ADS, which represents 10 local shares, and each local share also carry a warrant that permits holders to buy an additional share at a 5% premium. “People are very interested in our track record with commodities. There are a lot of funds talking about investing in agriculture and commodities now, but we have the experience to show for it,” says Elsztain. The CEO says the proceeds are being used push into new markets, including Bolivia, Paraguay and Urugay. Cresud, which owns a 24% stake in Cactus Argentina, a feedlot whose co-investors include Tyson Foods, says Elsztain. That business is also set to grow and might draw some of proceeds he says. Citi, Deutsche and Raymond James led the offering.

LatAm, Brazil Equities Among Favorites: ML

2008-03-20T09:24:00.001-03:00

LatAm is the preferred emerging market of choice for global equity investors in the next 12 months, according the most recent Merrill Lynch investor survey. And Brazil, along with Russia, is the top rated BRIC country, says the report, which polled 193 managers representing $676bn in AUM between March 7 and March 13. While managers were very underweight in LatAm in January, their average position changed over February and in March the region enjoys the only overweight position. Meanwhile they are neutral in EMEA and underweight in Asia. Within the BRICs, Brazil’s overweight rating has increased since January, while Russia’s has decreased from a dominant position. India and China have seen underweight positions all year so far. Brazil and Russia also enjoy the highest country allocations within all EM, followed by Thailand, Indonesia and Malaysia.

Merrill Launches Local Debt Indices

2008-03-18T05:48:00.001-03:00

Merrill Lynch is launching new local EM sovereign debt indices to track the performance of EM sovereigns debt denominated in the issuer’s local currency. “The fact that we are launching this is a reflection of the growing importance of the local debt markets to institutional investors outside of the issuer’s domestic markets,” Phil Galdi, head of Merrill’s global bond index group in New York, tells LatinFinance. “These markets have grown in size and now represent an important asset class that has offered strong historical returns with low correlation to other asset classes,” he adds. The series includes three new indices: The Merrill local debt markets plus index is a broad composite index designed to track local currency sovereign debt at A1 or lower on average; the Merrill net cap-weighted liquid local debt markets index represents a liquid basket of fixed rate bonds with country allocations based on relative capitalization weights in corresponding broad country indices. The Merrill net equal-weighted liquid local debt markets index meanwhile represents a liquid basket of fixed rate bonds with equally weighted country exposure. They are aimed at institutional investors.

Repsol YPF Argentina Offering Shares

2007-02-05T08:55:00.000-03:00

Oil company Repsol YPF is to sell 874,586 class ‘D’ shares belonging to a workers group this week, according to a filing with CNV, Argentina’s securities commission. The shares will be offered via Dutch auction on the Buenos Aires Stock Exchange and will be sold via MBA Sociedad de Bolsa. The share price will be set at not less than 90% of the average share price during the last six months, nor below 90% of the share’s closing price on February 6.

Pampa Holding Raises $180 Million

2007-02-05T08:54:00.000-03:00

Argentine energy holding company Pampa Holdings, part of Dolphin Group, priced its share offering at 2.23 pesos per share ($0.714) and its GDS at $18, the company said on Friday. The company is selling 600 million of new shares via the Buenos Aires Stock Exchange. The subscription period for the new shares will close on February 9. UBS Securities and Raymond James & Associates are arranging the transactions. In October last year Pampa issued 300 million shares worth $112 million via the Stock Exchange as part of a structural reorganization and move to increase its share capital.

TGS Sends Out Feelers For Refinance

2007-02-05T08:52:00.000-03:00

Transportadora de Gas del Sur (TGS), the Argentine gas transmission company, is evaluating proposals from up to six investment banks for a dollar-denominated offering expected to come to market by the end of Q1. In December, TGS filed a $650 million bond program locally. Bankers say given current favorable conditions, TGS could sell the entire amount in one go, but much will depend on pricing. Proceeds will go towards taking out bonds that have restrictive covenants.

Argentina Breaks 8%

2007-01-26T07:40:00.000-03:00

Argentina took advantage of market conditions to place the third tranche of its dollar-denominated Bonar VII bond issue, Thursday, achieving a yield of 7.71% - at the low end of market expectations. The sovereign sold $500 million of the seven-year paper, which matures December 2013. The Republic last issued the securities in November when it achieved a yield of 8.03%. The government has $500 million left of the $2 billion program. Argentina’s external financing needs in the first quarter of this year total $3.76 billion.

Argentina Takes Bids For Bonar VII

2007-01-25T06:39:00.000-03:00

Argentina will auction the third tranche of its dollar-denominated Bonar VII bond issue today, Thursday, according to the economy ministry. The sovereign is offering $500 million of the seven-year paper, which matures December 2013. The Republic last issued the securities, which carry a coupon of 7%, in November when it achieved a yield of 8.03%. This time around, Argentina will be looking for a yield of around 7.8%, say analysts. The government has so far issued $1 billion of a total $2 billion approved. Argentina’s external financing needs in the first quarter of this year total $3.76 billion. On Wednesday, Argentina’s country risk hit another record low, dropping to 190 basis points, as measured by JPMorgan’s EMBI+ index.

Banco Macro Returns For More

2007-01-24T07:53:00.000-03:00

Argentina’s Banco Macro priced Tuesday a $150 million 10-year at par to yield 8.5%. The price was tightened from 8.625% area and the deal was heard trading up marginally on the break. Sole bookrunner was Credit Suisse and orders were heard in excess of $400 million. The deal was rated B2/B+ and highlighted the continued thirst for yield from investors. Proceeds are for general funding. Macro was last in the market in December with a $150 million 30NC5 at 9.75%. Macro started its capital markets comeback in March 2006 with an impressive $300 million IPO.

Argentina: Record Exports In 2006

2007-01-23T07:26:00.000-03:00

Argentina achieved record exports of $46.6 billion last year, according to figures released by the economy ministry. The 15% annual increase in sales led to an increase in the trade surplus to $12.4 billion, despite the 19% rise in imports to $34.2 billion. GDP growth of around 9% helped drive up the demand for capital goods imports, said the ministry.

S&P Lowers Ecuador Rating To CCC

2007-01-22T07:47:00.000-03:00

Ratings agency Standard & Poor’s has lowered Ecuador’s long-term sovereign credit rating to CCC from CCC+ and revised its outlook on the rating to negative from stable. The short-term sovereign credit rating remains C. S&P said its rating action reflected “repeated policy signals by the new administration that indicate significant downside risk to timely debt service on its US$3.86 billion of outstanding global bonds”. Ecuador is due to pay a $135 million coupon on its global 2030s on February 15 (with a 30-day grace period). S&P added that the rating could be downgraded further should the coupon payment be missed and should the government suggest the coupon will not be paid “during the grace period or if an exchange offer is put to investors”.

Argentina Economy Expands 8.5%

2007-01-19T04:14:00.000-03:00

Argentina’s economy grew by 8.5% between January and November last year, according to the government. Year on year, the economy expanded by 8.6% in November, driven by construction and industrial production and rose 0.6% on a monthly basis.

Bolivia Seeks Full Mercosur Membership

2007-01-19T04:12:00.000-03:00

Bolivia has requested full membership of regional trade bloc Mercosur. However, President Evo Morales, speaking at a press conference in Rio de Janeiro, made it clear that Bolivia would push for changes to ensure that such trading blocs benefit the ordinary people, and not just the business community, in member countries. Bolivia’s application to join, sent to the member countries, currently meeting at a Mercosur summit in Brazil - if approved - will make Bolivia the bloc’s sixth member. Venezuela joined last year. Mercosur member countries comprise Argentina, Brazil, Paraguay, Uruguay, Venezuela; associate members are Bolivia, Chile, Colombia and Ecuador.

Moody’s Improves Ratings Outlook For Argentina Local Government

2007-01-18T03:12:00.000-03:00

Moody's Investors Service has changed the rating outlook to positive, from stable, for two local governments in Argentina. The agency said the action was prompted by a similar, recent, outlook change for Argentina’s B2 foreign currency country ceiling for bonds. The governments and ratings affected are: City of Buenos Aires foreign currency bonds rated B2 (global scale) and Aa3.ar (Argentina national scale). Both were assigned a positive outlook; these ratings are constrained by Argentina's foreign currency country ceiling. The outlook for domestic currency bonds rated B1 and Aa2.ar remains stable, said the agency. Meanwhile, Province of Mendoza foreign currency bonds due September 2018 rated B2 (global scale) were assigned a positive outlook; this rating is constrained by Argentina's foreign currency country ceiling. The outlook for the province's domestic currency issuer ratings of B1 (global scale) and Aa3.ar (Argentina national scale), as well as for its foreign currency bonds due September 2018 rated Aa3.ar (Argentina national scale), remains stable.

Moody’s Improves Argentina Outlook

2007-01-17T04:43:00.000-03:00

Moody’s Investors Service has raised the outlook on its B3 foreign- and local-currency rating of Argentina’s sovereign bonds from stable to positive. The change was due to “continued improvement in the fiscal accounts that, combined with robust economic growth and substantial accumulation of international reserves, has contributed to strengthening the government's overall credit profile and to reducing external vulnerabilities”, according to Moody’s. An outlook change to positive from stable was also made to Argentina’s B2 foreign currency country ceiling for bonds and to the Caa1 ceiling for foreign currency bank deposits. Unaffected by the rating action is Argentina’s Ba1 local currency bond ceiling, the highest possible rating that could be assigned to obligors and obligations denominated in local currency within the country remains stable, as well as the Ba1 local currency deposit ceiling.

EDC To Be “Nationalized”

2007-01-16T07:24:00.000-03:00

Venezuela’s largest energy company, privately owned Electricidad de Caracas (EDC), is to be “nationalized” as part of a wider program affecting the entire energy sector, according to comments made by the country’s energy minister Rafael Ramírez on Monday. Reuters reported that Ramírez revealed the government is aiming to take control of 86% of the utility controlled by AES of the United States. The state hopes to take over the stake by the end of the first half of this year. AES took control of EDC in 2000 via a hostile takeover amid against a background of falling share prices and political uncertainty. The new government of Hugo Chávez did nothing at the time to block the sale.

Mexico Swaps Dollar Debt

2007-01-15T07:40:00.000-03:00

Mexico said it succeeded in buying back $2.8 billion of its dollar debt last week, exchanging it for longer-term debt and cash. The sovereign used $2.39 billion of its reopened global 2034 dollar issue as well as $405 million in cash to buy back less liquid dollar paper from five issues maturing 2019 to 2033. Mexico achieved a yield of 6.27% on the newly issued 2034s, the lowest yet for such a maturity, and takes those globals outstanding in the market from $1.5 billion to $2.8 billion. Barclays Capital and Morgan Stanley managed the sale. According to the government, the swap reduces Mexico’s foreign debt by around $500 million.

Venezuela’s Markets Plunge

2007-01-10T07:12:00.000-03:00

Venezuela’s markets tanked on Tuesday following the announcement by president Hugo Chávez of further radical plans ahead of his new six-year term in office, which begins Wednesday. Chávez’s comments, which included nationalization plans for the country’s power and telecoms sector, led to tumbling stock and bond prices, Tuesday. The Caracas share index fell almost 19% and the yield on Venezuela’s internationally traded benchmark dollar-denominated 2027 global bond rose to 7.079%. Venezuela’s news was felt in other regional exchanges, such as those in Argentina, Mexico and Brazil, where companies with large investments wait and see what might happen to their holdings. Nevertheless, foreign investors in Latin American equities were urged not to panic. Citigroup, for example, issued a note explaining that the broader implications for foreign investors would be “tiny” given the fact that Venezuela is essentially “non-investible”. Apart from those investors holding ADRs in CANTV, Venezuelan stocks did not make up the broad Latin American investible equity universe after being expelled from MSCI GEMS in 2006, said the Bank. It did, however, caution that Argentina might follow Venezuela’s lead and said it reiterated its “Underweight recommendation on both Venezuela and Argentina within a Latin American equity portfolio”. However, the Bank concluded that its forecast “that regional equities rise by 10-15% in U.S. dollar terms this year is unchanged”.

Bancolombia Scandal Rumbles On

2007-01-08T08:38:00.000-03:00

Colombia’s largest financial institution, Bancolombia, has issued a statement following the arrest last week of its president and vicepresident - Jorge Londoño Saldarriaga and Federico Guillermo Ochoa - in which it says it finds “major flaws” in the resolution issued by the General Attorney’s Office on January 4, which authorizes the prosecution of the two men. The Bank emphasized that the decision by the prosecutor “does not affect the equity of Bancolombia or its solvency, its business and operations, or its obligations with its customers and clients”. It also denied any wrongdoing by its officers, as alleged, during the merger of Banco de Colombia and Banco Industrial Colombiano, over 10 years ago. The case has been brought by the Gilinski family, the former majority owners of Banco de Colombia, who sold their shareholding to BIC, for whom Londoño and Ochoa worked, and who claim they were defrauded. Bancolombia’s shares and its ADRs were hit by a sell-off last week after news of the arrests but prices had recovered somewhat by close of trading Friday.

Lula Sworn In; Kawall Resigns

2007-01-02T19:45:00.000-03:00

Brazil’s president, Luiz Inácio Lula da Silva was sworn in Monday for his second term in office. Lula was re-elected in October in a second-round victory against rival Geraldo Alckmin. The president has promised to prioritize growth and job creation during this second four-year term but has also pledged to keep public spending under control. However, the news last week that treasury secretary Carlos Kawall – an advocate of fiscal restraint and market favorite - had resigned gave little comfort to investors. Although Kawall resigned citing personal reasons, it has been rumored for some time that he was unhappy with the uptick in public spending. Kawall, who took over in March from Joaquim Levy, is replaced by his deputy Tarcisio José Massote de Godoy as interim secretary.

Happy New Year - 1957 - 50 Years - 2007

2007-01-01T14:33:00.000-03:00

Bravo & Bravo Losada celebrating 50 Years of innovative professional services.

Castro Hospitalized

2006-08-02T07:53:00.000-03:00

Cuba’s leader, Fidel Castro, was rushed to hospital Tuesday for emergency surgery, handing temporary control of the country to his brother Raúl, the first time he has ceded power in 47 years. The Cuban leader also handed over responsibility for energy, health and education to four members of the country’s Politburo. Castro issued a statement saying he would be away from his duties recuperating for “several weeks”. He also postponed his 80th birthday celebrations, due to take place later this month. Last month Castro traveled to Argentina to attend a Mercosur summit. It is believed the trip contributed to his health problems.

Venezuela Debuts As Full Mercosur Member

2006-07-24T05:19:00.000-03:00

Venezuela made its debut appearance as a full Mercosur member Friday at the 30th summit of the trade bloc, held in Córdoba, Argentina. Regional energy integration was one of the much discussed topics, as was the proposed establishment of a regional development bank, the so-called Banco del Sur, which would be set up to fund infrastructure and development projects in the southern cone. Argentina’s president, Nestor Kirchner, urged Mercosur to consider opening up membership to Bolivia and Mexico, provoking criticism from some quarters that the regional trade bloc is becoming less about free trade and more about politics. The event was lent some added glamour by the visit of Cuba’s veteran leader, Fidel Castro, who kept his address to the delegates brief at three hours. He also took the opportunity to visit the childhood home of his former comrade in arms and iconic revolutionary, Ernesto“Che” Guevara.

Mercosur or Mercosul (Spanish: Mercado Común del Sur, Portuguese: Mercado Comum do Sul, English: Southern Common Market) is a customs union between Brazil, Argentina, Uruguay, Paraguay and Venezuela, founded in 1991 by the Treaty of Asunción, which was later amended and updated by the 1994 Treaty of Ouro Preto. Its purpose is to promote free trade and the fluid movement of goods, peoples, and currency.

Bolivia, Chile, Colombia, Ecuador and Peru have associate member status. On 30 December 2005 it was announced that Bolivia would be invited to join as an associate member. Venezuela signed its membership agreement on 17 June 2006, and became a full member on 4 July of the same year.

Official Languages: Spanish and Portuguese.

Official website

Colombia Tax Reform Bill Heads To Congress

2006-07-24T05:15:00.000-03:00

Colombia’s government will send its tax bill to Congress this week, seeking to reform and streamline taxes and promote investment. One of the main pillars of the bill is the reduction of Colombia’s corporate income tax rate – currently one of the highest in South America – from 38.5% down to 32% by 2009. It also seeks changes to value-added tax (VAT) by introducing an additional level of VAT, rated at 10%, on staple foods. The VAT change is likely to meet resistance in Congress as it will affect all levels of society. The financial transaction tax of 0.04% looks set to remain, despite talk of it being reduced or even scrapped. There is also likely to be a new assets tax, perhaps at around 0.3%, for assets above the $0.5 million mark. The tax reforms, which overall will help to simplify and streamline the tax system in Colombia, is seen as a positive step forward by the markets.

Argentina’s Growth Trends Up Again

2006-07-21T05:07:00.000-03:00

After a slight slowdown in April, Argentina’s economic growth rate is accelerating once more, up 8% - year on year - in May, according to official figures. In April, the economy registered year-on-year growth of 6.3% after GDP expanded by 8.6% between January and March, compared with the same period in 2005.

Mercosur And Cuba To Sign Agreement

2006-07-20T06:09:00.000-03:00

Almost a quarter of all products traded between Mercosur countries and Cuba will soon be free of all duty, following an agreement between the trading bloc and the Caribbean country. The accord, due to be signed today, July 20, at the Mercosur meeting in Córdoba, Argentina, doubles the number of goods currently exchanged, tariff free, between the trading partners. This week, Argentina will be handing the Mercosur chair for the next six months to Brazil.

Brazil Lowers Interest Rate To 20-Year Low

2006-07-20T06:05:00.000-03:00

Brazil’s Central Bank has lowered the benchmark interest rate to its lowest level in 20 years as it moves to spur growth. The Bank cut the overnight interbank (Selic) rate 50 basis points from 15.25% to 14.75% reflecting the current benign inflationary environment. Last month, inflation fell to a seven-year low of 4%. This is the ninth consecutive reduction in the rates since September and the low rates have prompted a boom in consumer lending as Brazilians begin to tap accessible financing.

Argentina’s June Output Exceeds Expectations

2006-07-19T08:05:00.000-03:00

Argentina’s industrial output in June was higher than expected at 8.9%, compared with the same month the previous year. Overall output was driven by automotive production and cement sales, the latter reflecting a booming construction sector.

Argentina Attracts Biodiesel Investors

2006-07-19T08:04:00.000-03:00

Argentina’s abundant supply of vegetable-based oils – such as that from soybeans – is attracting foreign investors, in particular from Europe, in search of the increasingly scarce and expensive biodiesel energy to comply with EU norms. Biodiesel is a renewable energy derived from vegetable oils. After several months of negotiations, German investor Neckermann-Gate has agreed with Argentina’s Oil Fox to invest $27 million in a biodiesel plant in San Nicolás, which will supply 25 million litres a month. If the project is successful, Neckermann-Gate is reportedly interested in investing in further plants in Argentina and perhaps beyond into other parts of Latin America.

Colombia Starts Final Bank Privatization

2006-07-18T04:47:00.001-03:00

The Colombian government has started the privatization of its last remaining financial asset, Granbanco-Bancafé. The bank, the country’s seventh-largest in terms of assets, is expected to bring to the country’s coffers around $450 million and will give the successful buyer around 6% of the country’s banking assets. In this initial phase of privatization, and according to national law, the assets of the bank will be offered to the country’s pension funds, unions, cooperatives and other sectors of the so-called “solidarity” public sector. After this initial two-month phase, the bank will be offered up to other buyers. Of the local bidders, Grupo Colpatria, Grupo Bolívar, the mayor shareholder of Davivienda, and Bancolombia are all expected to participate in the sale. Foreign bidders may well include Spain’s Grupo Santander, Citibank and HSBC.

Ecuador Presidential Campaigning Begins

2006-07-18T04:47:00.000-03:00

Campaigning in Ecuador’s presidential elections, slated for October 15, has begun amongst uncertainty and continuing political upheaval. Left-of-center lawyer León Roldós is thought to be the early frontrunner facing right-of-center Cinthya Viteriand also, perhaps, former president Lucio Gutiérrez. The latter has registered his candidacy to run despite a ruling last month by Ecuador’s electoral court that Gutiérrez would not be able to hold public office for at least two years because of campaign irregularities in 2002. If no candidate wins more than 50% of the vote in October, a second round is scheduled for November 26. Ecuador has had seven presidents in the past 10 years, with the most recent change of leader in April 2005 when former president Lucio Gutiérrez was ousted from government by Congress and replaced by an interim leader, the incumbent Alfredo Palacio.

IADB Approves $200 Million For Colombia

2006-07-17T08:19:00.000-03:00

The Inter-American Development Bank (IADB) has approved a $200 million loan for Colombia to help improve its competitiveness. The 20-year loan is to be spent improving the business environment and help break down legal, regulatory and institutional barriers to foreign trade.

Chile Raises Benchmark Rate To 5.25%

2006-07-17T08:15:00.000-03:00

Chile’s Central Bank has raised the benchmark overnight lending rate a quarter of a percentage point to 5.25%. Economic growth of 6.1% and inflation ending June at 3.9% prompted the Bank to raise the rate, in line with market expectations. This is the first time the Bank has raised the rate since April, when it was lifted by 25 basis points to 5%.

Mexico To Launch 30-Year Peso Bond

2006-07-14T06:27:00.000-03:00

Mexico is to launch a 30-year local-currency denominated bond before the end of the year as part of a strategy to move more of the country’s debt into the domestic market. Borrowing in local currency rather than foreign currencies will lower the country’s costs. Since 1995 Mexico has reduced its foreign-currency debt as a ratio of GDP from 32% to its current low of 8%. The sovereign is likely to issue around $90 million worth of the bond each year, according to deputy finance minister Alonso Garcia Tames, and will target Asian investors in particular.

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Bolivia: Best Economic Performance Since 1998

2006-07-14T06:24:00.000-03:00

Bolivia’s GDP expanded 4.3% in the first quarter of 2006, compared with the 3.9% expansion seen in the same period last year and the best rate of first-quarter growth seen since 1998. Growth was driven by the mining sector, which expanded by 18% and hydrocarbons, which were up 12%. Inflation for the first half of the year stood at 2.05%, compared with 3.45% for the same period last year. The new government of Evo Morales took office at the end of January and has moved to increase revenues from abroad by nationalizing the hydrocarbons industry and renegotiating the price of exported energy.

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Court Rules In Uruguay’s Favor

2006-07-14T06:19:00.000-03:00

The International Court of Justice in the Hague yesterday, Thursday, ruled in favor of Uruguay in a dispute with neighboring Argentina over planned pulp and paper mills on the border region. The court rejected Argentina’s claims that the mills were an imminent threat to Argentina’s environment and will not act to stop construction of the plants. The $1.7 billion project along the River Uruguay, which separates the two countries, represents the largest ever single foreign investment in Uruguay. Presiding judge, Rosalyn Higgins, said however that the Court would look further into the dispute and that, by not ordering a suspension of work: “Uruguay necessarily bears all risks relating to any finding on the merits that the court might later make”.

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Argentina Debates Presidential Superpowers

2006-07-13T06:18:00.000-03:00

Argentina’s Senate was due to vote yesterday, Wednesday, whether to approve the proposal by president Nestór Kirchner to be granted the power to allocate around $4.5 billion of budgetary funds without approval from the nation’s lawmakers. Greater flexibility in budgetary allocation is not a new concept for Argentina’s governments but Kirchner’s critics are worried about the increasing control being exerted by the president over the country’s institutions and his tendency to govern“by decree”. The president has countered that greater control is needed if anything is to be done and has accused some lawmakers of holding him to ransom and stopping him from governing effectively.

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Venezuelan Banks Downgraded

2006-07-12T08:39:00.000-03:00

Ratings agency Fitch has lowered the credit rating of several Venezuelan banks, citing “the sustained decrease in capital ratios, due to the significant increase in assets, lower expected profitability and growing government intervention over the system”. The agency said it believes the current minimum capital requirements could prove insufficient to cope with the historic volatility of the Venezuelan market. The agency downgraded the ratings of Banco Mercantil, Banco Exterior, Banco Provincial and Banco de Venezuela from C/D to D. And the rating of Banesco Banco Universal was lowered from D to D/E.

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Argentina Lowers Debt Limits

2006-07-11T07:34:00.000-03:00

Argentina’s Central Bank has said that banks will have to lower the amount of government paper they hold from 40% to 35% of assets by July of next year. The move is aimed at encouraging banks to increase their private loans portfolios. The increase in lending to the private sector and consumers will, in theory, help to stimulate economic growth.

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Costa Rica Rejects Parlacen, Again

2006-07-10T07:03:00.000-03:00

Costa Rica’s government has chosen to keep the country out of the Central American parliament, Parlacen, saying it is a costly institution that brings no benefit. Guatemala, which plays host to Parlacen, had asked the new government of Oscar Ariasto reconsider the country’s decision to remain out of the parliament. Costa Rica has earned criticism from its neighbors and has been accused of isolationism for its stance. Permanent members of the parliament are Dominican Republic, El Salvador, Guatemela, Honduras, Nicaragua, Panama.

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Peru Holds Rate Steady; Growth Cools

2006-07-10T07:01:00.000-03:00

Peru’s Central Bank left the benchmark interest rate unchanged at 4.50% for the second month in a row, in line with market expectations. Meanwhile, preliminary figures showed economic growth for the first half of the year slowed to 6%, down from 6.8% recorded in the first quarter.

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Brazil Records Deflation

2006-07-10T06:57:00.000-03:00

Brazil’s consumer prices fell 0.21% in June, the largest fall in prices in eight years and the first time this year the country has recorded deflationary figures.The drop was a result largely of a decline in energy prices, said the government. Inflation has been easing off since the start of the year and the rate for the first six months was 1.54%, compared with 3.16% for the same period last year. Prices for the first 12 months to June were up 4.03%, suggesting the annual government target of 4.5% will be hit with ease.

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Mexico Inflation Below Forecast

2006-07-10T06:53:00.000-03:00

Mexican consumer prices rose only 0.09% last month, below economists’ forecasts and took annual inflation to 3.18% as at the end of June. However, core inflation rose 0.33%, slightly above average predictions. Continuing election uncertainty may mean the Central Bank may wait to cut interest rates further.

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AMLO Rallies Crowds

2006-07-10T06:50:00.000-03:00

The loser of last Sunday’s Mexican presidential elections, Andrés Manuel López Obrador (AMLO), rallied thousands of supporters in Mexico City at the weekend to demand a manual recount of the votes. AMLO believes a vote-by-vote recount will find him victorious against rival ruling party candidate, Felipe Calderón, who has been declared the winner. AMLO has until July 10 to file a complaint with the electoral court which must then settle all claims by end-August in order to declare the next president by September 6.

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Calderón Scrapes Home

2006-07-07T08:14:00.000-03:00

Felipe Calderón, Mexico’s ruling party candidate, has scraped home to win the presidential election. Following Wednesday’s recount, the pro-business, PAN party leader won the backing of 35.88% of the electorate against 35.31% earned by his nearest rival, left-of-center Andrés Manual López Obrador (AMLO). However, AMLO has said he will challenge the result. The electoral court must settle any challenges by the end of August and must announce a new president by September 6.

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Brazil Presidential Campaigning Starts

2006-07-07T08:10:00.000-03:00

Meanwhile, presidential campaigning has officially kicked off in Brazil, with seven candidates running for office. Frontrunner for the October 1 elections is incumbent president, Luiz Inácio Lula da Silva of the PT party, who has weathered a brutal year of political scandal and corruption to survive unscathed. Lula’s nearest rival is the former governor of São Paulo state, social democrat Geraldo Alckmin of the PSDB.

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Ecuador Records Second Month Of Deflation

2006-07-07T08:09:00.000-03:00

Ecuador has registered its second consecutive month of deflation. Official figures for June just released show deflation of 0.23%, after a decline in prices of 0.14% in May. The fall in consumer prices was attributed in large part to retail promotions; government officials deny it signals a recession. The government has targeted inflation this year of 3.1%. Inflation to May was running at 1.54%.

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Chile Exceeds Growth Forecast

2006-07-07T08:02:00.000-03:00

Chile’s economy expanded faster than expected in May, growing 6.1% year on year. The increase took the accumulated growth figures to 4.8% for the year. May’s rate of expansion followed April’s growth of only 2.8%. Manufacturing and retail activity drove the rise, according to the Central Bank.

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Argentine Investors Continue To Favor Trust Securities

2006-07-07T07:37:00.000-03:00

Domestic investors in Argentina continue to favor financial trusts (fideicomisos financieros) as their instrument of choice. According to financial services company Gainvest, during the first half of the year, $1 billion of the instruments were traded, a year-on-year increase of 100%. Of the total transacted, $712 million corresponded to securitizations with underlying private risk, with most growth seen yet again in the securitization of consumer loans.

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June Inflation Round-up

2006-07-06T02:23:00.000-03:00

Argentina’s inflation for June is expected to be up at around 0.7%, putting the rate for the first half of the year just above 5%. Prices were driven by a rise in the cost of services, such as rents, education and medical cover. Consumer prices in Chile meantime rose 0.6% last month, more than expected, and took annual inflation to 3.9%. Peru’s inflation headed downwards for a second consecutive month, dropping 0.13% on the back of falling food prices. And prices fell too in Uruguay, declining from 0.63% in May to 0.32% in June. Inflation for the year is now running at 3.88%.

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Morales Wins, But Divisions Remain

2006-07-06T02:20:00.000-03:00

Despite being heralded as a great victory for the ruling MAS party, Bolivia’selections Sunday have not gone entirely president Evo Morales’ way. Preliminary results show that MAS failed to gain a two-thirds majority to control the constituent assembly charged with drafting a new constitution for the country. And the issue of autonomy has underscored the social division in Bolivia: the four wealthiest provinces voted “yes” to more autonomy.

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AMLO Demands Thorough Recount

2006-07-06T02:17:00.000-03:00

Presidential candidate Andrés Manuel López Obrador (AMLO), who appears to be trailing in Mexico’s Sunday election, has demanded a thorough recount of the votes. A preliminary count gives AMLO’s rival, ruling party candidate Felipe Calderón, a 0.64% advantage. The Mexican electoral institute, IFE, said it hoped to have a final result by Sunday.

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Chávez And Kirchner Unveil Southern Bond

2006-07-05T01:49:00.000-03:00

Venezuela and Argentina are to launch a bond together, the presidents of both countries announced yesterday, Tuesday, in Caracas. The announcement of the so-called “Bono del Sur” came on the day Venezuela officially joined trade bloc Mercosur as a full member. The bond is due to be launched within the next three months and will reportedly be for $1 billion and is to be the first step towards the creation of a bank of the south to offer regional financing. Some analysts are dubbing the bond a “tropical Brady” as it is effectively a bond guaranteed byVenezuela in the event of default.

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Mexico Awaits Result

2006-07-05T01:46:00.000-03:00

Mexican authorities begin a recount of votes today, Wednesday, in a presidential race that has become too close to call. Felipe Calderón of the ruling PAN party and Andrés Manuel López Obrador (AMLO) of the PRD party are neck and neck, although the preliminary vote count showed Calderón had a 1% advantage over his rival, gathering 36.38% of the votes against AMLO’s 35.34%. Early results also show that Congress will, once again, be divided.

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Mexico Decides

2006-07-03T07:51:00.000-03:00

Mexicans cast their votes yesterday, Sunday, to decide who will succeed Vicente Fox as the country’s next president. The two frontrunners out of the five candidates standing in the hotly contested race are left-of-center former mayor of Mexico City, Andrés Manuel López Obrador, and right-of-center former energy minister, Felipe Calderon of the ruling PAN party. Mexicans also voted for 500 members of the Chamber of Deputies and 128 members of the Senate, as well as governors in the states of Guanajuato, Jalisco and Morelos and the mayor of Mexico City. Mexicans abroad, including an estimated 35,000 based in the US, were eligible to vote in elections for the first time.

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Colombian Pension Funds Offer $285 Mln For Gas Distributor

2006-07-02T04:40:00.000-03:00

A group of Colombian pension funds bid $285 million for the company’s main natural gas distributor, now called Transportadora de Gas del Interior (TCI). The new company springs from the sale of state utility Empresa Colombiana de Gas Natural, which operates 3,644 kilometers of gas pipelines. The sale is part of the Colombian government’s privatization program.

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Brazil’s TAM to Buy 37 Airbus Planes

2006-07-01T12:10:00.000-03:00

TAM, Brazil’s largest domestic airline, announced it will buy 37 planes from Airbus to replace its ageing Fokker fleet and expand operations. The company did not say how much it will spend but press reports estimate the final bill will be $2.4 billion. The company, which operates 40 percent of all domestic flights, is looking to expand its international business with larger planes like the Airbus A330. Its main competitor for the overseas routes, Varig, is close to bankruptcy with $3 billion in debt.

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Brazil Sets 2008 Inflation Target at 4.5%

2006-06-30T07:07:00.000-03:00

Brazil’s National Monetary Council set a generous inflation target of 4.5 percent for 2008, opening the way for lower interest rates and higher growth. It is the same as the target for 2007 and less than the 4.2 percent rate at which prices rose in the 12 months to May. The council, which is made up of the finance and planning ministers together with the governor of the central bank, said it wanted to avoid the mistake of setting the target too low. The council missed its target in 2001 and 2002 and raised the targets in 2003 and 2005 after realizing it could not hit them.

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Mexico May Issue 30-Year Bond After Elections

2006-06-30T07:00:00.000-03:00

Mexico expects market conditions after Sunday’s presidential elections to be calm enough to allow it to sell 30-year government bonds, according to Finance Minister Francisco Gil Diaz.
At a press conference ahead of the weekend he said Mexico’s fiscal and economic conditions are stable and there is no danger of any market wobbles. Up until President Vicente Fox’s win in 2000, the previous three presidential elections were marked by economic crises.

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Peruvian Congress Ratifies U.S. Trade Pact

2006-06-29T16:11:00.000-03:00

Peruvian legislators overwhelmingly approved a free trade agreement with the United States that would boost the economy through increased exports. The government now hopes the U.S. Congress will do the same before the summer recess, although even ministers admit this may not be easy.

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Mexican Economy Grew 1.8 Percent in April

2006-06-28T08:11:00.000-03:00

Preliminary figures show the Mexican economy expanded 1.8 percent in April compared with a year earlier. Growth was weak because Holy Week, when many factories close down, fell in April this year, compared with March in 2005.

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Panama and Chile Sign Free Trade Agreement

2006-06-28T08:05:00.000-03:00

Chile and Panama Tuesday signed a free trade accord, ending a decade of negotiations. The agreement will take at least 10 years to fully open trade between the countries with Panama insisting on protection for farmers.

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Argentina Industrial Output Rises 7.3 Percent in May

2006-06-27T07:16:00.000-03:00

Industrial production in Argentina rose 7.3 percent in May compared with the same month a year earlier. In the first five months of the year industrial output is 7.1 percent higher. The growth was led by automobile production and construction materials.

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Brazil’s Lula Announces He Will Run Again

2006-06-26T08:05:00.000-03:00

Brazilian President Lula Inacio da Silva announced at the weekend he will run for a second term in office this October, promising to maintain economic stability and intensify his battle against poverty. Most polls predict he will handily beat his opponent Geraldo Alckmin, a former governor of Sao Paolo state.

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Mexico’s Central Bank Holds Rates Steady

2006-06-26T07:53:00.000-03:00

Mexico’s central bank held its benchmark interest rate steady at 7 percent Friday, just over a week before the presidential elections. The monetary authority indicated it saw no room for a cut in the foreseeable future as it looks to calm market jitters before the tight contest between Andres Manuel Lopez Obrador and Felipe Calderon on July 2. Concerns over rising U.S. interest rates as well as domestic inflation are preventing the bank from cutting domestic borrowing costs.

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More Millionaires For Latin America

2006-06-21T13:21:00.000-03:00

The number of millionaires in Latin America grew 9.7% last year, above the world average rate of 6.5%, according to the 10th annual World Wealth Report, just published by Merrill Lynch and consultancy firm Cap Gemini. The increase of millionaires – defined as people with more than $1 million in assets – in the region is attributed to the high price of crude oil and other commodities. The 350,000 millionaires in the region control around $4.2 billion of assets.

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Argentine GDP Up 8.6% in Q1, Prices Rise 2.6%

2006-06-19T03:37:00.000-03:00

The Argentine economy grew 8.6 percent in the first quarter of the year, driven by a continuing recovery in manufacturing and construction. The economy has grown 37.5 percent from the trough it fell into in 2002 when the government defaulted on its debt. Meanwhile prices rose 2.6 percent in the first quarter, signaling runaway inflation remains a threat.

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Venezuela Joins Mercosur

2006-06-19T03:29:00.000-03:00

Venezuela signed an agreement to become the fifth member of the Mercosur trading block. Argentina, Brazil, Paraguay and Uruguay are the other countries that belong. Venezuela is attractive to the other members given its huge oil reserves but the current administration has not been in favor of free trade agreements and may see this as more of a political than an economic union.

Together the five countries represent about 75 percent of South American GDP.

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Mexico’s Lopez Obrador to Defy NAFTA

2006-06-19T03:22:00.000-03:00

Andres Manuel Lopez Obrador, the left-wing contender in Mexico’s July presidential elections, said he will ignore parts of the North American Free Trade Agreement, which call for the abolition of agricultural tariffs by 2008. He said Mexican farmers could not compete on even terms against U.S. corn and beans and the effects on the countryside would be disastrous. He also proposed a set of price guarantees, subsidies and cheap credits. Lopez Obrador is running neck and neck in the polls with conservative candidate Felipe Calderon.

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Venezuela Government Eyeing Mines

2006-06-19T03:17:00.000-03:00

Venezuelan President Hugo Chavez has sent a law to Congress aimed at taking control of unused gold and diamond mines in what would be a further blow to private investors. Companies with concessions they have not yet begun to exploit could lose them. Chavez has already increased state control over some oilfields at the expense of private companies. The proposed law would enable the government to take a majority stake in any non-operational mining concession in tandem with a private company.

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Peru Growth Slows

2006-06-16T05:09:00.000-03:00

Peru’s GDP grew by only 3.63% in April, compared with the same period in 2005. This compares with year-on-year growth of 10.7% in March and 4.9% in February. Declining output of manufacturing, fishmeal and natural gas were behind the slowdown. Annual inflation for the four months to April was 5.94%. Growth for the year is forecast at over 5%.

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Chile Holds Benchmark Rate

2006-06-16T05:03:00.000-03:00

Chile’s Central Bank held its benchmark interest rate at 5% at its monthly meeting yesterday, Thursday. Recent figures show that Chile’s economic growth has weakened, prompting a hold on rates rather than an increase. The Bank last raised interest rates in April, when it put up the rate by 25 basis points from 4.75% to 5%.

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IGAF Worldwide - Newsletter

2006-06-15T05:09:00.000-03:00

Click AQUI para ver la newsletter de IGAF Worldwide, The Exchange (Mayo-Junio 2006)

Click HERE to view the IGAF Worldwide newsletter, The Exchange (May-June 2006).

Technorati Tags: IGAF, IGAF Worldwide, IGAFLA, Newsletter, The Exchange, Debra Bailey Helwig, Sara Folk, Kevin Mead, Eduardo Bravo Losada, Bravo & Bravo Losada, Accountants, CPAs, Accounting Firms

Colombian Stocks Lead Region’s Slide

2006-06-14T16:32:00.000-03:00

It was another grim day of trading on the Colombian stock exchange Tuesday with several stocks suspended during the course of the day and some losing more than 17% of their value. Although the IGBC had fallen overall only 8.73% by close of play, trading was on the verge of being suspended throughout the day, as it neared the 10% fall which halted dealing on Monday. Across the region stocks continued to slide: Brazil’s Bovespa fell 2.1%, while Mexico’s BMV dropped 2%.

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Uruguay Economic Growth 7.2%

2006-06-14T16:29:00.000-03:00

Uruguay’s GDP expanded by 7.2% in the first quarter of the year, compared with the same period of 2005, according to figures published by the Central Bank. The growth was driven by the manufacturing sector, which grew 18.1% and construction which rose 16.1%.

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Tenaris To Buy North American Rival Maverick

2006-06-14T13:42:00.000-03:00

Tenaris, the world’s largest steel tube producer, controlled by Argentina’s Techint, is to buy North American rival Maverick Tube for $3.2 billion. The acquisition will allow Tenaris to expand into the North American market. The move by Techint’s Luxembourg-based unit pushed up the company’s share price and saw an improvement in Argentina’s Merval Tuesday – Technit has a 27.7% weighting in the index.

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Markets Take A Turn For the Worse

2006-06-13T07:44:00.000-03:00

Latin American stock markets tumbled again yesterday, Monday, in another gloomy day of trading on renewed concerns of hikes in US interest rates. The MSCI Latin American index fell for a sixth day, down 3.4%, as emerging markets worldwide took a big hit. In Argentina, the Merval slid 4.5%, while Mexico and Brazil were both down more than 4% each. And after the Colombian IGBC tumbled by more than 10%, the stock exchange witnessed its first automatic trading suspension since the general price index was created five years ago.

Technorati Tags: Latin America, Latin American Stock Markets, US Interest Rates, MSCI Latin American Index, Merval, IGBC, Argentina, Brazil, Colombia, Mexico, Eduardo Bravo Losada, Bravo & Bravo Losada, IGAF, Accountants, CPAs, Accounting

Edenor Shareholders Approve Proposals

2006-06-12T08:04:00.000-03:00

Shareholders of Argentine electricity distributor Edenor have approved plans to sell its shares in New York and Buenos Aires. A proposal to increase the company’s share capital was also approved as was a scheme to amend Edenor’s statutes to allow the company to enter other markets, such as the telecoms market. The public offering of shares will be used to finance the company’s investment plans to improve services and meet increasing demand over the next five years.

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Mexican Inflation At 3%

2006-06-12T07:59:00.000-03:00

Consumer prices in Mexico fell 0.45% in May, taking annual inflation down to 3%, from 3.2% as at end-April, according to Central Bank figures. Headline inflation was driven down by declines in food and energy prices. However, stripping out food and energy left core inflation up 0.15%.

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MexDer First Foreign Member To Start Trading Soon

2006-06-09T07:55:00.000-03:00

The Mexican Derivatives Exchange’s (MexDer) first foreign member - Timber Hill of the US - is likely to start trading soon on the Mexican exchange following regulatory approval. The company plans to trade futures contracts based on Mexico’s benchmark stock index. Owned by Interactive Brokers, Connecticut-based Timber Hillis the largest equity options market-maker in the US. In March this year Timber Hill became the first foreign company to be granted “remote membership” of the exchange after regulatory changes at MexDer allowed for the entrance of foreign players. MexDer is keen to lure other international firms that trade Mexican derivatives over the counter to become remote members and instead trade via the exchange.

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Gazprom Studies Bolivia Investment

2006-06-09T07:39:00.000-03:00

Russian energy giant Gazprom says it is studying the possibility of investing up to $3 billion in Bolivia to work with state-run YPFB to develop various energy projects. Those on the table include exporting natural gas to Mexico and the US as well as exploration of new fields.

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World Bank Green Lights Argentina Loans

2006-06-08T07:01:00.000-03:00

The World Bank has approved $3.3 billion of loans to Argentina over the next three years to be invested in aiding sustainable development. The loans, part of the global Country Assistance Strategy (CAS), comprise 30 separate credits to support improvements in areas such as infrastructure, health, education and the environment. The approval of the loans is seen as a vote of confidence in the country’s economic recovery after the crisis of 2001-2002.

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Uruguay-Argentina Paper Conflict Reaches The Hague

2006-06-08T06:52:00.000-03:00

The long-running conflict between Uruguay and Argentina regarding the building of two paper mills has reached the International Court of Justice in The Hague. Hearings are due to start today, Thursday, to determine whether Uruguay has violated bilateral treaties, as Argentina claims. Argentina has accused its neighbor of giving the go-ahead to the $1.7 billion project – which represents the largest single foreign investment ever - without sufficient consultation regarding the environmental impact on the Uruguay river, which separates the two countries.

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Argentina Reserves Up $5.6 Billion

2006-06-07T01:33:00.000-03:00

Argentina’s Central Bank has added $5.7 billion of reserves since January, when the government repaid its entire $9.8 billion debt to the International Monetary Fund (IMF). Reserves rose from $18.58 billion, as at January 3, to $24.26 billion as at June 3. The Central Bank claims its policy of accumulating reserves serves to protect the economy against external shocks and aims to reduce exchange rate volatility.

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Markets Upbeat Over García Win

2006-06-06T02:19:00.000-03:00

Lima’s general stock index (IGBVL) rose 4.04% Monday morning, reaching record highs, on the news that former president Alan García had clinched victory from nationalist Ollanta Humala. Meanwhile, the Peruvian currency, the nuevo sol, strengthened 0.82% against the dollar to levels not seen since the beginning of 1999. With 92.5% of the second-round presidential ballot counted, Alan García of Peru’s center-left political party, APRA, had won 53.20% of the votes against 46.79% polled by Humala.The markets were clearly pleased and relieved that the votes of the middle class and business community won out against the populist choice.

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Chile Economic Growth Slows

2006-06-06T02:11:00.000-03:00

Chile’s economic growth slowed in April, with GDP expanding by only 2.8% year on year. Chile’s Central Bank said a slowdown in manufacturing and retail led to the drop in the pace of growth and may lead the Bank to hold back with increases in interest rates. Central bankers are scheduled to review rates on June 15. They last raised the benchmark rate in mid-April when they increased it by 25 basis points to 5%.

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Exit Polls Say García Wins In Peru

2006-06-05T07:14:00.000-03:00

Alan García, former president and unlikely comeback kid, appears to be the winner of Sunday’s voting in Peru’s second-round presidential elections. Exit polls Sunday evening indicated that García had won 52.8% of the vote against 47.2% garnered byHumala. García’s first time in office, between 1985 and 1990, saw Peru default onits debt and annual hyperinflation of 8,000%. However, voters have obviously forgiven or forgotten García’s record of economic management or perhaps are simply voting against the alternative: former coup leader and ex-military man, nationalist Ollanta Humala. García polled 24.3% of the vote against Humala’s 30.6% in the first-round poll on April 9. He narrowly beat off market favorite, conservative Lourdes Flores, who gained 23.8% of the votes.

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Colombia Inflation Slows

2006-06-05T07:09:00.000-03:00

Colombia’s rate of inflation in May slowed to 0.33%, the lowest month-on-month rise for May since 1986. Last year inflation for the month was 0.41%. Inflation for the year so far is running at 2.71%, compared with accumulated inflation of 3.51% for the first five months of 2005.

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Bolivia To Launch Iron And Steel Industry

2006-06-05T07:03:00.000-03:00

The contract to develop Latin America’s largest iron ore deposits – Bolivia’s El Mutún – has been awarded to Indian company Jindal Steel and Power. The government says the deal marks the launch of the country’s iron and steel industry. Jindal has promised to invest $2.3 billion in the project over the next 10 years, the largest foreign investment yet secured by the new government led by Evo Morales. The company will not only extract iron ore but also produce iron and steel. Bolivia, rich in mineral and energy resources, has to date largely exported raw materials rather than processing them. The deal is likely to earn President Morales much political capital, after the government changed the terms of the original tender to ensure more job creation. The changes in the terms were to include a steel production operation and guarantee the site be fueled by natural gas. The project will include the extension of a gas pipeline and investment in local infrastructure to accommodate the terms. Jindal was the only company to remain in the bidding process after Netherlands-based Mittal Steel failed to make the final cut and Argentine Siderar withdrew from the process.

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Peru Central Bank Holds Rate; Growth Continues

2006-06-02T02:26:00.000-03:00

Peru’s Central Bank decided to hold its benchmark interest rate unchanged yesterday,
Thursday, for the first time in six months, keeping it at 4.50%. A rise of 25 basis points had been expected by economists to help cool domestic demand, which is driving Peru’s continued economic growth. GDP expanded by 6.8% in the first quarter of the year, compared with the same period in 2005. Internal demand rose by 9.9%, driven mainly by capital investment. Meantime, the rate of inflation in May declined for the first time since September last year, falling 0.53%. Annual inflation slowed to 2.2%, within the government’s target range of 1.5% to 3.5%.

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