Three groups have presented bids to take part in Mexico’s tender for its hydroelectric plant La Yesca: one led by China’s Sino Hydro; another led by Mexican constructor ICA and a third headed up by Argentina’s Techint. A consortium comprising local company Ideal and Brazil’s Andrade Gutierrez failed to present an offer. More than 20 companies initially acquired the terms and conditions of the bidding process for the $840 million project, the most important hydroelectric construction project of the outgoing Fox administration. The winner will be announced October 27.
Category: Regions
Posted inDaily Brief
Showdown For UN Seat
The battle between Venezuela and Guatemala for the fifth available non-permanent seat in the United Nations Security Council will continue in New York today, Tuesday. After 10 rounds of voting Monday there was still no clear winner to replace the seat’s current occupant, Argentina, when it steps down on December 31. Although Guatemala managed to beat Venezuela in each round of voting, it failed to secure a two-thirds’ majority needed to win the seat. The battle between the two Latin American nations has been billed by many as a battle against the will of the US, which has been openly backing Guatemala’s bid. Behind the scenes, negotiations are taking place to propose an acceptable compromise candidate from the region – most likely either Uruguay or Dominican Republic. The 10 non-permanent seats on the UN Security Council have a two-year tenure (two seats are allocated for Latin America and the Caribbean region). Only five of the 10 are up for renewal at the end of this year. The permanent members of the Council, who enjoy the power of veto, include the US, Russia, the UK, France and China.
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Former Peru President Dies
Valentín Paniagua, former interim president of Peru, died Monday in Lima following heart problems. He had been in hospital since August. Paniagua, who was 70, ran for president in Peru’s April elections, finishing in fifth place. He served as interim president from November 2000 until July 2001 after the collapse of the government under President Alberto Fujimori.
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Ecuador Run-Off Set To Polarize Nation
Ecuador is set for a run-off election on November 26 after none of the presidential candidates secured the majority necessary for a first-round win. With 63% of the ballots counted, banana magnate Álvaro Naboa surprised most analysts by taking 26.77% of the votes against 22.45% won by populist candidate Rafael Correa. The run-off is likely to highlight the socio-geographic divide in the Latin American nation, with the majority of Naboa’s support coming from middle-class voters on the coast around financial center Guayaquil and those of Correa centered on Quito. The markets were heartened by the showing of business leader Naboa, the third time he has run for president. Correa, a former economy minister, has alluded to a possible debt default should he win power, which recently has led to a sell-off in the country’s debt by some international investors. Ecuador’s voters have professed to being extremely cynical of their politicians. The country 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.
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Mexico Output Slows
Mexico’s industrial output grew in August by 5.8% year on year, according to the national institute of information and data (INEGI), taking increased production for the year through August to 5.5%. Cooling growth in the manufacturing sector, which expanded 5.4%, contributed towards an overall slowdown in growth, with monthly output in August down 0.06% compared with July. Manufacturing looks set to lose steam as the year progresses as a result of a drop-off in auto production; the automotive sector accounts for around 10% of industrial output. Results for auto production in September showed growth had slowed to 12% from 19.5% in August and a high of 52% in June.
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Panama Keeps It Low
Panama’s dollarized economy recorded inflation of 1.6% in September, with housing and utilities prices rising the fastest at 5%. Cumulative inflation for the nine months through September rose to 1.2%. According to IMF forecasts, Panama will post inflation this year of 2.8% and next year of 2.3%, continuing its reputation as the nation with the lowest inflation in the region. The country’s annual inflation over the past 30 years has averaged less than 3.2%, according to the US State Department.
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SABMiller Fails To Make It 100%
Anglo-South African brewer SABMiller, owner of Colombian beermaker Bavaria, has failed to buy up the remaining 2% of the company’s shares outstanding in the market to take 100% control of the company. SABMiller spent around $9 million to increase its stake by 0.21% but was unable to tempt or track down all the company’s shareholders with its offer of $19.48 (46,176 pesos) a share. The brewer will not be able to delist Bavaria from the Colombian Stock Exchange, according to local brokers. SABMiller took control of 71.8% of Bavaria last year in a deal worth $7.8 billion.
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Infonavit Breaks Records
Mexico’s largest, government-run, home-finance agency – Instituto Nacional de Fomento a la Vivienda ( Infonavit) – broke records Thursday when it issued $142 million-worth of Cedevis – its mortgage-backed, exchange-traded securities denominated in UDIs. This was the eighth and largest issuance yet of Cedevis by Infonavit and the issue was twice oversubscribed. The paper has a maximum term of 22 years. It was rated mxAAA/Aaa Mex by Standard & Poor’s and Fitch respectively. Infonavit expects the securities to price at a record low rate of 5.09% when they start trading on the Mexican Securities Exchange today, Friday. So far this year the Agency has placed $344.4 million worth of Cedevis in a program worth up to $551 million (6 billion pesos).
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Colombia Central Banker Upbeat
Colombia’s Central Bank believes the domestic economy may well expand by over 5.5% this year and by 4.5% next year, driven by domestic demand. The Bank’s chief executive, José Darío Uribe, speaking Wednesday at an economic forum in Bogotá, said he believed the confidence of local consumers and businessmen was high and pointed to increased private investment and consumption. In the second quarter of the year, private investment was running at 18%, public investment at 25% and domestic consumption at 5.3%, according to the central banker. Colombia’s GDP grew by 5.96% in the second quarter of the year.
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Peru To Sign New IMF Standby Agreement
Peru is to sign a new standby agreement with the International Monetary Fund (IMF) before the end of the year. The credit line will help the country protect itself against future drops in commodity prices, the government said. The last agreement with the Multilateral expired in July. The announcement follows President Alan García’s whirlwind tour of Washington earlier this week, which began with the first meeting so far between the “Comeback Kid” and President George W. Bush. The last time Alan García was in Washington as head of state, George Bush senior was in the White House. García also spent time in high-level talks with the IMF, the World Bank, and the Inter-American Development Bank (IDB). Peru is keen to push forward US ratification of the free-trade agreement between the two countries and the US is hoping to enlist Peru’s support in the war on drugs.