Venezuela has signed a series of agreements with China, with the latter committing to invest billions of dollars in the Latin American nation. President Hugo Chávez, currently on an official visit to the Asian country, announced that China had pledged at least $11 billion in Venezuela’s infrastructure and oil sectors. Venezuela will increase its oil exports to China threefold over the next five years, according to the President. In addition, state-run PDVSA has signed an agreement with China’s National Petroleum Corporation to operate a joint-venture in the country’s oil-rich Orinoco belt.
Category: Regions
Posted inDaily Brief
ECLAC Report Blasts Mexican Banking Sector
ECLAC, the UN’s Economic Commission for Latin America, has published a damning report on Mexico’s banking sector, concluding that the lack of competition in the market provides conditions for “implicit collusion” by banks to keep consumer charges high. Market regulation has kept out competition in certain areas such as credit cards and checks, leading to banks focusing on profitable consumer lending at the expense of financing business. The market is currently dominated by foreign players such as Santander, BBVA, Citigroup, Scotiabank and HSBC, but the report concludes that this foreign presence in the banking sector has not resulted in increased productivity or efficiency in the local banking system.
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Bolivian Hydrocarbons Nationalization Dealt Further Blow
The nationalization of Bolivia’s hydrocarbons sector has been dealt another blow, this time by the opposition-controlled Senate, which has censored the hydrocarbons minister Andrés Soliz for his handling of the process. Soliz, who was obliged by law to hand in his resignation following the vote by opposition senators in favor of the censure, was offered the full support of President Evo Morales, who refused to let him step down. The nationalization process has been hampered by a lack of funds and also by charges of corruption and mismanagement made against the state-run oil company YFPB. The company was put in charge of oil production in May when the nationalization was announced.
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Five Bidders Battle It Out For El Dorado
Three bidding groups that were originally excluded from the race to win the operating concession for Bogotá’s international airport, El Dorado, will now be included, according to Aerocivil, Colombia’s civil aviation authority. The Authority recently delayed the date of selecting a winner from August 18 to August 28 to reevaluate documentation presented by Corporación América, Siemens together with Colpatria, and Stratis. The three groups, together with ASA and Opaín will be considered for the 20-year concession to run the airport, with the winner expected to invest around $650 million to modernize the country’s largest airport.
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Mexico Nominal GDP Rises To Record Levels
Mexico’s nominal GDP rose to record levels in the second quarter of the year, according to the national institute of statistics and data (INEGI). Nominal GDP rose 13.7%, year on year, to $875.1 billion as at the end of June. In real terms, GDP grew by 4.7% when adjusted for inflation of 8.6% for the period. Services contributed almost half of nominal GDP (49.5%), followed by industry 26.6% and then retail, restaurants and hotels 21.2% and agriculture 3.9%.
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Telmex Buys Colombia’s Superview
Mexico’s largest fixed-line telecoms operator, Telmex, has bought Colombian cable TV company Superview for around $40 million. Superview, which has 150,000 registered users in Colombia, offers cable television, internet access and remote residential security. Telmex said the deal was completed about 10 days ago. The announcement of the acquisition in Colombia follows news on Tuesday that it has agreed to buy Argentine wireless solutions company Ertach for $22.5 million.
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Éxito Raises The Stake
Colombia’s leading retailer, Almacenes Éxito, which announced just days ago it had agreed to buy a 19.8% stake in rival Vivero Carulla for $110.5 million, may buy up to 77.5% of the company. Éxito says it will finance the acquisition via a bank loan for up to $300 million, a share offering of 24.7 million common shares at $4.44 per share, and its own funds. Éxito is owned by local conglomerate Grupo Empresarial Antioqueño (GEA) and French company Casino.
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Argos Plans New $320 Million Plant
Colombian cement-producer Cementos Argos, part of GEA, is to invest $320 million in constructing a cement plant in Cartagena. The plant, which will produce up to 1.6 million tonnes of grey cement a year, is due to be on line in 2009 and will help to supply the company’s newly acquired concrete factories in North America. Argos is currently constructing three coal-fired plants in the country, at a cost of $33 million, to become self-sufficient in energy by next year.
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Ochoa Steps Down At Suraminv
Juan Camilo Ochoa Restrepo, president of Medellín-based Suramericana de Inversiones, Suraminv, has resigned from his post. Ochoa was appointed president of Suraminv in April 2004 but had worked for Colombia’s largest conglomerate Grupo Empresarial Antioqueño (GEA), which owns Suraminv, for the past 16 years. Ochoa will be replaced by David Bojanini García from October 1. Bojanini is currently president of Medellín-based pension fund administrator Protección.
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Bolivia FDI Outflows $107 Million
Bolivia saw net foreign direct investment (FDI) in the first half of the year of $103 million, compared with gross FDI of $210 million. According to figures released by Bolivia’s Central Bank, foreign investors withdrew capital to the tune of $107 million between January and June this year. The area of greatest inward investment was mining, which attracted $118 million, followed by hydrocarbons, which pulled in $46.9 million. Before outflows, FDI was up slightly when compared with gross investment of $206 million for the same period last year.