Telefonos de Mexico (Telmex) sold its 13.4 pct stake in US communications company MCI to Verizon Communication for some $1.1 billion. Under the sales contract Telmex is entitled to further cash payments if Verizon’s share price exceeds $35.52. Telmex owner Carlos Slim reached an agreement with Verizon last month to support it in its battle with US firm Qwest Communications International for the MCI stake.
Category: Regions
Posted inDaily Brief
Mexico Issues Debt
Mexico raised SFr 250 million ($204 million) with its first bond sale in Switzerland in 17 years. The seven-year bonds were sold to yield 3 percent annually at a spread of 97 basis points over the seven-year swap rate in Swiss francs. Mexico turned to Switzerland’s bond market as part of an effort to diversify its financing sources. CSFB managed the sale.
Posted inDaily Brief
Mexico: Growth Slows
Mexico’s economy grew 2.4 percent year-on-year in the first quarter, down from 4.9 percent in the previous quarter as demand in the US for Mexican exports declined. The US took 83 percent of Mexico’s $47 billion in exports in the quarter. Most Mexican sales in the US are manufactured goods, which faced weakened demand in March as US factory production fell for the first time in six months.
Posted inDaily Brief
Bolivia Enacts Hydrocarbons Law
Bolivia’s Congress enacted legislation that increases royalties on oil and gas production, requiring companies to renegotiate existing contracts. The law will add a 32 percent tax to existing 18 percent royalties. Foreign companies say the law will reduce investment and Britain’s BG Group threatened to take legal action if its contract is rescinded. Bolivian protestors are pressing for full nationalization of oil and gas deposits and others want a 50 percent royalty and the imposition of state-controlled prices.
Posted inDaily Brief
Peru: Growth Slows
Peru’s economy grew 4.0 percent year-on-year in March, the slowest pace in five months and down from 6.8 percent in February, as copper output fell at the country’s two largest mines. The Central Bank estimates the economy will expand 4.5 percent in 2005.
Posted inDaily Brief
Gil Diaz Anticipates Rate Cuts
Mexico’s central bank will begin cutting interest rates before yearend as inflation slows, Finance Minister Francisco Gil Diaz said. A reduction would end more than a year of rate increases by Banco de Mexico, which pushed up the overnight loan rate to 9.9 percent from 5.5 percent in the past 15 months. Annual inflation slowed to 4.6 percent in April after peaking at 5.4 percent in November. Mexico’s yearend inflation target is 3 percent.
Posted inDaily Brief
Vale Sees Growth from China
Companhia Vale do Rio Doce, the world’s largest iron-ore producer, expects China to import 250 million metric tons of iron ore this year, 15 percent more than in 2004, as the growing Chinese economy boosts demand for steel. The company says it is boosting output, seeking to take advantage of record iron ore prices to finance investments in areas such as aluminum and coal that will help stabilize earnings when iron-ore prices decline.
Posted inDaily Brief
Colombia: WB Approves Loan
The World Bank has approved a $260 million loan to support Colombia’s Natural Disaster Vulnerability Reduction Project, a 10-year governmental program that seeks to reduce the fiscal vulnerability of the state when reacting to natural disasters. The loan is repayable in 14 years and will have a grace period of eight and a half years. The World Bank estimates floods and earthquakes cost Colombia over $1 billion annually.
Posted inDaily Brief
Bancomer’s Profit Rises
Mexican banking group BBVA Bancomer posted a consolidated first quarter net profit of $233 million, up 28 percent year-on-year. The group’s core banking business generated a net profit of $198 million. Bancomer’s mortgage credit portfolio expanded 51 percent to $4.15 billion, thanks largely to the acquisition of Mexican mortgage lender Hipotecaria Nacional in late 2004. Bancomer is the Mexican unit of Banco Bilbao Vizcaya Argentaria (BBVA), Spain’s largest bank.
Posted inDaily Brief
Guatemala Given Grant
The World Bank’s board of directors has said it will provide grants worth $780 million to Guatemala over the next three years. Guatemala, one of the poorest countries in the world, needs to increase growth by approximately 5 percent annually and raise public spending on human development and infrastructure investments to meet the World Bank’s Millennium Development Goals and halve poverty by 2015.