Mexico’s economy grew by 4.7% in the second quarter of the year, taking first-half growth to 5.1%, the strongest result for the period since 2000. The second-quarter expansion, driven by car and oil exports, was higher than expected by most economists. Last month the central bank raised its growth forecasts for the year to 4.5%. Last year, the economy grew by 3%. Meanwhile, industrial production in the second quarter was up 3.9%, largely due to increased output in construction and manufacturing. And consumer demand is also on the rise as consumer’s take advantage of cheaper credit available as a result of falling interest rates. Mexico’s outgoing president, Vicente Fox, looks set to hand over an economy in good health in December when his terms ends.
Category: Regions
Peru Issues $121 Million Local-currency Bonds
Peru has issued $120.7 million worth of bonds in the local market. The government issued two local-currency bonds: one maturing May 2015 to yield 6.9% for $46.5 million and another maturing August 2026 with an interest rate of 7.55% for $74.4 million. Both issues were oversubscribed with demand reaching $113 million and $124.7 million respectively. The bond issues are part of the Sovereign’s plan to raise $660 million this year to meet its financing needs
Peru Looks To Debt Profile
Peru’s newly installed government has said it is looking at ways to pay down some of its more expensive debt to multilaterals and extend the maturity on other debt to lower the country’s debt-servicing costs. By improving the debt profile of its external debt, Peru will be following a move made by several other Latin American countries recently. It will also be continuing a strategy begun under the previous administration of Alejandro Toledo which prepaid around $2.4 billion of its external debt, paying down $1.5 billion of its debt to the Paris Club group of creditors and settling an $830 million debt with Japan Peru Oil Co (Japeco) taken out in the 1970s. The debt payments were financed by selling global bonds into the international and local markets.
Mexico Achieves 8.08% Yield On 10-Year Benchmark Bond
Mexico achieved a yield of 8.08% on its 10-year benchmark peso bond issue when it sold a further $286 million of the securities at auction yesterday, Tuesday. The yield achieved by the Sovereign on the fixed-rate peso bonds, which mature in December 2015, is lower than that achieved last month when it sold the bond to yield 8.69% and the lowest yield since the end of February. The lower cost of the debt reflects investors’ confidence in the country’s stability and the almost certain presidential win by Felipe Calderón of the ruling PAN party.
Venezuela Ups Oil Supply To Jamaica
Venezuela is to increase the amount of oil it supplies at preferential rates to Jamaica by around 12%. It will now supply 23,500 barrels of crude per day as part of its regional energy plan agreed under the Petrocaribe agreement. Venezuela’s president, Hugo Chávez, visited Jamaica earlier this week to discuss the increase in supply. Venezuela is also working with Jamaican state-run oil company Petrojam to increase the production capacity at a local refinery from 36,000 barrels of oil per day up to 50,000 bpd.
Su Casita Secures IFC Revolving Credit
Mexico’s largest home finance company, Hipotecaria Su Casita, has secured a revolving credit line from the International Finance Corporation (IFC), the private-sector arm of the World Bank. The local currency credit line, worth $72 million, is part of a larger financing program with the IFC worth $248 million. The credit line will help fund Su Casita’s expansion plans. The company’s main function is to extend mortgage loans to low-income individuals and to provide construction financing to developers of low-income housing. However, the company is also planning to expand into the middle-income section of the Mexican housing market.
Colombia Sets Date For Bancafé Sale, Phase Two
Colombia has set a date of October 12 to begin the second phase of its privatization of 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. The government opened up the initial phase of the sale of the bank in July, due to end on September 17, during which the bank’s assets are being offered to the country’s pension funds, unions, cooperatives and other sectors of the so-called “solidarity” public sector. Local firms expected to bid for the government’s last financial asset include Grupo Colpatria, Grupo Bolívar (the mayor shareholder of Davivienda), and Bancolombia. Foreign bidders are likely to include Santander, Citibank and HSBC.
Bolivia Starts To Debate Constitutional Reform
Bolivia’s Constituent Assembly, whose 255 members were elected on July 2, will open the debate today, Tuesday, on the future of the country’s Constitution. The Assembly is tasked with reworking the Constitution, despite a lack of consensus between the government and the opposition on how much of a majority is needed to vote through the constitutional reforms. Bolivia’s president, Evo Morales, the country’s first indigenous president, has called for radical reform and a “refounding of Bolivia” on behalf of the Indian majority of the population.
América Movil To Tap Latin American Markets
Mexican wireless communications company América Movil, the region’s largest cellular phone operator, says it is planning to issue debt in several local Latin American markets this year. The money raised will be used to fund its expansion plans to raise total users by 12%, up to 122 million, by the end of year. The company will issue securities in Peru and Chile as part of the first stage of its plan. This week, the company began an aggressive marketing campaign aimed at grabbing a larger share of the Chilean market. On Thursday it is due to relaunch the newly rebranded Claro (formerly Smartcom), the number three domestic operator which it bought last year, and its new GSM network.
Calderón Claims Recount Confirms Victory
Felipe Calderón, the candidate of Mexico’s ruling PAN party, has claimed that a partial recount of the July 2 voting will confirm him as the winner of the presidential elections. There has been no official declaration of the recount from the country’s Federal Electoral Court charged with overseeing the review and publishing the results. The review of ballots from 9% of the country’s polling stations was authorized August 5 following a request for a full recount by opposition candidate Andrés Manuel López Obrador (AMLO). The PRI candidate has refused to accept defeat in the elections and has urged his supporters to continue with their protests which have disrupted the center of Mexico City for the past two weeks.