Colombian president, Alvaro Uribe, made history Sunday by becoming the first Colombian leader to be re-elected to serve two consecutive terms. Uribe was returned with 62% of the votes, beating nearest rival, Carlos Gaviria, who gained the backing of only 22% of Colombians. The president earned widespread voter approval as a result of his hard line on security issues and his successful management of the country’s economy. He persuaded Congress to make constitutional amendments to allow him to stand for re-election, arguing that he needed more time to complete his work. Meanwhile, in line with many other markets in the region, Colombian stocks bounced back after the dramatic slide of recent weeks. The benchmark stock index, the IGBC, rose 8% on Friday with a record number of transactions for the month. And the country’s Central Bank surprised economists by keeping interest rates unchanged; the benchmark overnight lending rate remains at 6.25%, confounding expectations of a 25 basis points rise.
Category: Regions
Chávez Embraces Bolivia
Venezuela President Hugo Chávez’s visit to Bolivia has concluded with the signing of 16 cooperation agreements which will further cement the close relationship between Chávez and Bolivian counterpart Evo Morales and heighten the nervousness of some foreign investors. Venezuela has announced, presumably much to the chagrin of Brazilian oil operator Petrobras, that it will invest $1.5 billion into the Bolivian energy sector via its state-owned oil entity PDVSA. In addition, it has said it is committed to buy $100 million of Bolivian debt. This would certainly help Morales’ government with its budget shortfall this year, and is in line with Chávez’s goal to promote a regional capital market.
Paraguay Slapped With Old Debt
Paraguay is being sued by nine European banks who are demanding the payment of a $85 million debt dating back to 1986-1987. A Swiss court has ruled that the debt, a result of fraudulent loans taken out in the name of Paraguay and allegedly involving the complicit knowledge of then president of Paraguay, Alfredo Stroessner, must be settled by the present government of the country. Paraguay says it will not comply and will take the case to the International Court of Justice in the Hague. The banks involved include: Banca di Roma International, Banca Popolare di Milano, Banque Buxelles Lambert, Cassa di Risparmio di Torino and DG Bank.
Alsea Raises $68 Million
Mexican fast-food operator Alsea has raised $68 million via a secondary share offering, less than the $85.5 million it had expected to sell. The sale, which was postponed from May 25 following the slide in the Mexican bolsa which reflected the worldwide slump in emerging markets, comprised 18 million shares at a price of 42 pesos per share ($3.78). The sale was managed by the Mexican unit of Banco Santander Central Hispano.
América Móvil To Close Deal On Verizon Dominicana
Mexican wireless phone operator América Móvil hopes to close a deal to buy Verizon Dominicana (ex-Codetel), part of the Latin American assets being sold off by the US telecoms giant. América Móvil offered $2.06 billion to buy the Dominican unit in April, along with Verizon’s 28.5% stake in Venezuela’s CANTV for $676.6 million.
Peru May Go Long In Local Market
Peru is contemplating placing 30-year bonds in the local market, making them the longest maturing local-currency bonds issued by the sovereign to date. (Peru sold 20-year sol-denominated bonds on May 2, raising $40 million.) The government is considering issuing the longer-term paper to cover debt incurred from agrarian reform in the 1960s. Almost $1.5 billion of debt is still owed to landowners whose land was expropriated by the state. The bonds would be denominated in local currency and carry a fixed interest rate. No possible date was revealed for the offering.
Uribe Set For Re-election
Colombia’s president, Alvaro Uribe, looks set to be returned to office for another four-year term this Sunday. His record on national security, as well as economic management, have ensured approval ratings recently of around 60% and have seen investor confidence in the country boosted. His pro-free trade stance, as well as his program of privatization, are rare in the region. If returned to power, he will become the first Colombian president to serve two consecutive terms after Congress last year approved constitutional amendments allowing the president to stand for re-election.
Ecuador Foreign Trade Minister Resigns
Ecuador’s foreign trade minister, Jorge Illingworth, resigned yesterday, Wednesday, after only eight months in the job. He has been replaced, temporarily, by Manuel Chiriboga, Ecuador’s chief negotiator in the free trade talks with the US. A new minister will be named within the next few days.
Ecuador Will Not Seize Oxy Pipeline Shares
Ecuador has said it will not seize the shares held by the US oil company Occidental Petroleum (Oxy) in the heavy oil pipeline Oleoducto de Crudos Pesados (OCP) Ecuador. Last week the government cancelled Oxy’s oil production agreement and took control of its assets in the country. Oxy has a 14.15% stake in OCP, the only private pipeline in operation in Ecuador, which has the capacity to transport up to 450,000 barrels of oil per day.
Colombian Energy Firms Invest In Peru
Colombia’s state-owned electricity company Interconexión Eléctrica (ISA) and state-run Empresa de Energía de Bogotá (EEB) have bought a stake in Hydro-Quebec’s Peruvian subsidiary Consorcio TransMantaro. The companies paid $67 million for the 57% share in the Canadian company’s subsidiary. ISA is Colombia’s largest energy provider.