Category: Peru

Peru’s banking superintendency has given the nod to UK and Hong Kong-based financial giant HSBC to set up operations in the local market. The Bank will operate under the name HSBC Bank Peru and is due to start operations on October 9. HSBC applied in March to the superintendency as part of a strategy to expand in the region. The Bank, the third-largest in the world, also heard from Colombia’s financial regulator this week that it could open a representative office in that country. HSBC already operates in Argentina, Brazil and Mexico. Earlier this year it agreed to buy the assets of Lloyds TSB in Paraguay for $15 million.

Peru recorded inflation of 0.03% in September, lower than the 0.14% seen in August – according to the national institute of statistics (INEI). Inflation for the nine months through September was 1.35% and for the 12 months through September rose to 1.99%. The slowdown in prices was led by a drop in fuel prices cutting transport costs. Telephone tariffs also dropped.

Peru’s private investment promotion agency ProInversion has sold around 41 million shares, representing 39.95% of the share capital, in Empresa Eléctrica de Piura, an electricity company controlled by Endesa of Spain. The sale raised almost $15 million.

Peru Monday launched the tender of copper mine Michiquillay. The government, via private investment promotion agency ProInversión, is looking for investment of between $300 million and $700 million. Michiquillay, located in Cajamarca, close to South America’s largest gold mine Yanacocha, has reserves of copper, gold and silver estimated at 544 million metric tonnes. Those expected to participate in the tender process include Southern Copper Corp and Compañía de Minas Antamina. The results of the tender are due to be announced in mid-December.

Peru is to due to launch the tender for its Michiquillay mine later this week. Private investment promotion agency ProInversión, on behalf of the government, is looking for investment of at least $700 million. Michiquillay, located in Cajamarca, close to South America’s largest gold mine Yanacocha, has reserves of copper, gold and silver.

Peru’s economy expanded 9.04% in July, year-on-year, beating analysts’ forecasts and recording the second-highest monthly growth of the year. July’s expansion takes growth for the first seven months of the year to 6.97%, according to the national institute of statistics (INEI). Last year, Peru recorded growth of 6.5%; the target for economic expansion this year is 6.6%.

Peru is planning to save around $1.5 billion in debt servicing costs on debt owed to the Paris Club group of lenders by extending out debt due in 2010 by another three to five years. The country owes around $5.75 billion to the Paris Club in total. Last year, Peru paid down $1.5 billion of its debt to the creditors. The government also says it aims to reduce the ratio of its foreign public debt from 78% of the total to 69%, converting it into domestic debt by the end of next year. The move will help protect Peru from external shocks say economists. Next week the government will make its eighth local-currency bond issue, this time worth $70.7 million. It last sold local-currency sovereign bonds in August, worth $121 million.

Peru’s President Alan Garcia has picked the former chief economic advisor to opposition leader Lourdes Flores, to take control of the country’s central bank. Julio Velarde, currently head of the Latin American Reserve Fund in Colombia and considered an orthodox economist, will become president of the Banco Central De Reserva for the next five years. He replaces acting bank chief Oscar Dancourt.

Ernesto Zavala, formerly Peru’s economy minister under Alejandro Toledo, has joined brewer Backus and Johnston, as corporate affairs director. Robert Priday, managing director of the Peruvian subsidiary of Anglo-South African SABMiller, welcomed Zavala as one of Peru’s brightest young men.

Peru recorded a fiscal surplus in the first half of the year of 4.8% of GDP, compared with a surplus of 2.5% of GDP for the same period last year. The increase in the surplus, which reached $2.16 billion, was a result of a rise of 24% in revenues during the period against a rise of only 9.8% in expenses. Meanwhile, July figures showed a surplus of $48.9 million, versus a deficit of $184 million in July last year, and takes the fiscal surplus for the year through July to $2.42 billion.