Japan’s Daiwa Securities and Itau Securities plan to set up two new mutual funds aimed at LatAm. Itau will advise and manage the funds, each expected to be at least $500m in size, say executives at the Brazilian firm. One fund will be geared towards LatAm equities and the other will be specifically for Brazil fixed income. Itau, which has had an office in Tokyo since 2004, already manages a Brazil fund for Nikko Asset Management, also in Japan, which could reach up to $500m by year-end. Daiwa says it is increasing its reach into global markets with a focus on growth areas. In Korea, Itau manages two equity funds alongside Daewoo Securities and KDB Asset Management. Itau and its subsidiaries also have offices in Hong Kong and Shanghai, and the Brazilian shop is preparing to open in Singapore. The firm also just recently set up shop in Dubai, where it will service Middle Eastern investors interested in Brazil. Fellow Brazilian financial institution Unibanco has also set up funds in Asia and elsewhere in LatAm.
Category: Regions
Inversiones Argos Takes Colinversiones Stake
Colombian investment holding company Inversiones Argos has purchased 19.98% of Colinversiones for COP400bn ($230m), Argos says in a filing with the local regulator. The transaction involves a share swap with investment companies Inversiones e Industria and Antioquena de Inversiones, owners of the stake in Colinversiones, Argos adds. The purchase is part of Argos’ push into the Colombia energy market, where Colinversiones has significant presence. With this investment, Argos increases its stake to 24.3% in Colinversiones, an investment firm focused on the financial, hospitality and energy sectors in Colombia.
PDVSA, Petroecuador Ink New Refining JV
PDVSA and Petroecuador have signed an agreement to build a new oil refining facility in the coastal town of El Aromo, Ecuador, to be operational by 2013. Petroecuador will control 51% of the project, while PDVSA will hold the other 49%, the Venezuelan company says. The Refineria del Pacifico is expected to cost $9bn and will process 300,000 barrels per day, as well as fertilizers, PDVSA says. A PDVSA spokesman declined to disclose financing terms.
Petroholland Signs $1bn Gas Pipeline Deal
Dutch oil company Petroholland has signed an agreement with Bolivian state owned oil conglomerate Yacimientos Petroliferos Fiscales Bolivianos (YPFB) for a $1bn gas pipeline in the Andean nation, the Bolivian state owned agency ABI says. The pipeline will be financed with resources from the Netherlands government, ABI adds. The first phase of the project is expected to start in August. Funding covers research, development and construction.
Moody’s Ponders Bolivia’s Gravetal Upgrade
Moody has put Bolivian soy processor Gravetal on review for possible upgrade. Ratings affected include Gravetal ‘s Caa1 senior unsecured rating on $46m in notes issued in Bolivia’s domestic debt market. Moody’s action follows the announcement that 99% of the shares in Gravetal have been acquired by Sociedad Inversiones de Capital Inversoja, a company controlled by Monomeros Colombo Venezolanos, a fertilizer and chemicals firm owned by Venezuelan state-owned Pequiven. “The review will focus on the impact the acquisition will likely have on Gravetal’s credit profile including potential support that its parent company might provide to Gravetal,” Moody’s says. In June, Monomeros purchased 77.5% of Gravetal for an undisclosed amount. Prior to the acquisition, Gravetal was a small family-owned company, Moody’s says. Santa Cruz-based Gravetal produces crude soybean oil and other soy-based products.
Peru’s Internal Market Boosts GDP Growth
Peru’s robust 7.3% GDP growth in May exemplifies the country’s strong internal growth despite harsh external conditions and monetary restrictions, says Alfredo Coutino, senior economist with Moody’s Economy.com. “The internal market is expected to be the growth driver this year, which will compensate for the deceleration in exports,” Coutino adds. GS is also optimistic on Peru’s outlook. “The economy continues growing at a remarkably robust pace,” says the shop. “We remain comfortable with our 8.3% real GDP growth forecast for full year 2008,” it adds. On Monday, Peru received its second investment grade nod, this time from S&P, at the same time that new finance minister Luis Valdivieso was sworn in.
Telefonica Colombia Seeks EUR Loan
The Colombian unit of Telefonica has asked the European Investment Bank (EIB) for a EUR100m loan to expand its GSM mobile network and implement third generation Universal Mobile Telecommunications System technology in Colombia. Telefonica obtained a $600m A/B loan from the IDB, Citi, BNP, ABN and Santander in December and borrowed EUR100m from the EIB in 2006.
Iberdrola Downsizes Innovative MXP Bond
Spanish utility Iberdola had to significantly reduce the size of its innovative Mexican peso-denominated bonds to MXP1.5bn, owing to limited interest in a deal the leads claim is the first locally-registered MXP placement by a foreign corporate. The 2018 notes pay a fixed 10.23% coupon, 94bp wide to comparable Mbonos and just inside initial guidance of 95bp. The issuer had been targeting both fixed and floating-rate tranches totaling about MXP3.5bn, but it was heard forced to scale back due to choppy market conditions. Iberdrola plans to swap the interest rate as part of the transaction, and was heard to have found a floating-rate Euribor swap unattractive in the current market. Demand reached 1.6x the reduced size, according to a banker managing the sale, which was rated AAA on the national scale. Iberdrola, which has a considerable asset base in Mexico, plans to use proceeds for general corporate purposes. Banamex and Bancomer managed the transaction, which was delayed by a week. Iberdrola registered to sell up to MXP5bn in Mexican bonds and did a roadshow in June.
Peru Gets Second I-Grade Nod
S&P has raised Peru’s debt to BBB minus from BB+, the second investment grade endorsement for the sovereign following Fitch’s April promotion. The shop’s decision was based on a “significant decline in Peru’s fiscal and external vulnerabilities within a context of high and diversifying sources of growth with low inflation and strengthening macroeconomic fundamentals.” S&P expects GDP growth of 6.5% and investment reaching 25% of GDP in the medium term. Peru’s growth has also diversified, it notes, relying more on domestically driven demand and private consumption. “Peru’s political and social stability will continue to constitute a credit weakness compared with peers,” S&P cautions. The outlook is stable, with continued improvement in debt management within a stable political context supporting the case for moving further up the ratings ladder. Increased political polarization that weakens support for sound macroeconomic policy, however, would add downward pressure to the rating. Goldman Sachs says the upgrade is well deserved, citing strong macro fundamentals, large fiscal surpluses, low inflation, strong real GDP growth, and low and declining levels of public and external debt. “The current economic policies are likely to be maintained over the next few years, on the back of which we believe the ongoing virtuous economic growth cycle is poised to continue,” it says. The two-out-of-three status allows Peru’s inclusion in Lehman’s Global Aggregate Index, opening it up to investors limited to trading there. Peru’s benchmark Global 2037 bond traded at 101.00-101.50 late Monday, after opening at 100.25-101.00. Lima’s Bolsa gained 2%, outpacing Brazil’s Bovespa, up 0.95%.
Peru Seen Unchanged by New FinMin
No change is expected to Peru’s economic policy following the appointment of former IMF economist Luis Valdivieso to lead the finance ministry. “The Garcia administration continues to resist wage pressures and has used the commodity windfall to invest in infrastructure, pay down public debt and increase assets, a strategy which Fitch believes the new finance minister will maintain,” says Theresa Paiz Fredel, a senior analyst at Fitch. Others agree. “We believe that in Peru there is a consensus around an economic policy that favors growth without neglecting the social component. In that regard, we believe that the change of Luis Carranza for Luis Valdivieso represents a continuation of this economic policy,” says Alejandro Grisanti, LatAm analyst at Barclays. Valdivieso was sworn in yesterday by Peruvian president Alan Garcia, hours after S&P raised the Andean nation to investment grade. Fitch also rates Peru high grade.