Category: Funds

Brazil is to allow its exporters to keep up to 30% of their earnings abroad in order to lower their costs and help to weaken a strong real. Previously, companies were obliged to repatriate 100% of their export earnings. The government also announced it was suspending the CPMF financial transactions tax on funds held abroad. The package of exchange-rate measures announced by the finance ministry has been welcomed by the country’s large exporters such as steel-maker Gerdau, but they also say the measures do not go far enough to help domestic industry stay competitive in the global market.

Peruvian pension fund Prima AFP, owned by the country’s largest financial institution Credicorp, is to buy AFP Unión Vida from Spanish bank Santander for $142 million. The acquisition will turn Prima – which was set up only last August – into the sector’s second largest manager, with assets under management of $3.2 billion, representing 28% of total assets in the market. The sale is subject to the approval of financial regulators.

Colombia’s pension funds (AFPs), together with some other minority investors, have bought control of the country’s largest gas distribution company, state-owned Empresa Colombiana de Gas (Ecogas), for just over $300 million. The six pension funds have acquired control of 97.15% of Ecogas, and marks the first foray by the funds into the gas sector. Under Colombian privatization law, state companies to be sold must first be offered to the “solidarity” sector comprising pension funds, cooperatives and unions.

Dutch Insurance company Aegon said it agreed to buy 49 percent of Mexican life insurer Seguros Argos for an undisclosed amount. The deal is likely to close in the third quarter pending approval from the authorities. Argos is the seventh largest life insurance company in Mexico. Aegon left Mexico in 2002, selling its share of a joint venture for $1.24 billion.

Ecuador is considering rejoining the Organization of Exporting Oil Countries (OPEC), although no final decision has been made, according to energy minister, Iván Rodríguez. Ecuador would become one of only two Latin American nations (the other being Venezuela) comprising the group. In fact, the country was an OPEC member between 1973 and 1992, when it left following disagreements regarding oil quotas. Venezuela has said it will support the return of Ecuador to the organization. OPEC members currently include: Venezuela, Saudi Arabia, Algeria, UAE, Indonesia, Iraq, Iran, Kuwait, Libya, Nigeria and Qatar.

Meanwhile, Colombia’s six pensions fund administrators (AFPs) have said they will bid for the country’s state-run gas distribution company Ecogás when the government puts it up for sale next month for $295 million. The privatization of Ecogás has been long awaited and marks the exit of government from the natural gas sector.

Peru’s local pension fund administrators (AFPs) continue to benefit from the liberalization of the rules governing their investment universe. The country’s banking regulator (SBS) has said it is planning to let them invest directly in alternative investments, such as covered funds, later this year. Since March they have been able to invest in these instruments indirectly. This year, for the first time, the country’s five AFPs have also been allowed to invest in sub-investment grade securities (below BBB-).

Mexico’s pension fund regulator, Consar, has approved three new licenses for private pension funds (Afores) to operate in the local market, taking the total number of such funds to 19. The first new fund to be launched will be Afore Ahorra Ahora, run by Monex Grupo Financiero. The two other licenses are for funds being set up by state-owned Bansefi and by retailer Coppel. The private pension fund market, which was launched in Mexico in 1997, is beginning to take off following a series of changes last year allowing more self-employed workers to pay into the funds and for greater transfer possibilities within the private system.

Primero Justicia has become the fourth political party in Venezuela to boycott Sunday’s parliamentary elections. The parties, which also include Acción Democrática, COPEI and Proyecto Venezuela, are protesting against what they say are unfair electoral conditions. The ruling Movimiento V República party of President Hugo Chávez is seeking to increase its seats in Congress on 4 December.