Category: Peru

Peru’s fiscal surplus rose in April to just over $1 billion, almost double its level at the same time last year, according to the country’s Central Bank. The increase has been driven by the improvement in tax collection, the Bank said.

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.

Swiss mining company Xstrata has agreed to pay $750 million to Anglo-Australian firm BHP Billiton for its Tintaya copper mine in the south of Peru to consolidate its presence in the mining sector in Latin America. Xstrata is already developing a copper project in Peru – Las Bambas – in the south at Apurimac. It also has an important copper and gold operation – Alumbrera – in the northwest of Argentina.

Peru’s economy expanded at the vertiginous rate of 10.65% in March, compared with the same period a year ago, according to the national institute of statistics and information (INEI). This takes year-on-year first-quarter growth to 7.15%. Expansion was driven by an increase of just over 38% in the fishing sector and almost 10% in manufacturing. Annual growth is expected to reach 5% this year.

Former president of Peru Alan García has been officially named run-off candidate to face Ollanta Humala in the second round of Peru’s presidential elections, slated for June 4. With 100% of the votes now counted and confirmed, Ollanta earned 30.62% of the votes, García won 24.33% and Flores 23.80%, only 64,303 votes behind García. Meanwhile, the diplomatic row between Peru and Venezuela escalated with Venezuela recalling its ambassador to Peru. The retaliation came after Peru called home its ambassador to Venezuela on May 1, citing interference by Venezuela’s president, Hugo Chávez, in Peru’s domestic politics.

Peruvian mining companies Barrick Misquichilca and Cerro Verde have both offered bonds in the local market to fund expansion plans. Cerro Verde, one of Peru’s largest copper producers, sold $90 million of bonds with maximum maturities of 9.5 years. The bonds were placed offering Libor plus 1.6%. Cerro Verde is owned by US company Phelps Dodge. Meanwhile, Barrick Misquichilca, one of Peru’s largest gold producers and the subsidiary of Canada’s Barrick, has offered $50 million of local bonds, maturing in 2012. The bonds carry a rate of Libor plus 1.5%. Both offerings were arranged by Citigroup.

Peru’s first-quarter exports rose by 19.7%, reaching $4.44 billion. The year-on-year growth was driven by the mining industry, followed by petroleum and derivatives, and fishing. However, on a worrying note, textile exports grew by only 7.4%. Peru’s main export markets remain the US, China and Chile.

A poll just published in Peru has shown that former president Alan García, who seems the most likely candidate to face nationalist Ollanta Humala in a run-off, will win the presidency in the second-round vote. García, who trailed both Humala and conservative Lourdes Flores throughout the election campaign, is predicted to beat Humala in the run-off, with 54% of the votes against 46%.

Former president of Peru, Alan García, says he is confident that he will beat off rival Lourdes Flores to proceed to the second round of voting to elect Peru’s president. He will face the victor of the first round, nationalist Ollanta Humala, in a run-off slated for May 28 or June 4. García has said he will withdraw his complaints against voting carried out abroad in the US, Italy and Spain, such is his confidence in his victory. However, with 89.5% of the votes counted, the difference in votes between the two second-round contenders had narrowed to just a little over 95,000 votes. Humala had garnered 30.90%; García 24.38% and Flores 23.53%.

The markets in Peru took a dive yesterday, Tuesday, as it became increasingly clear that former president Alan García would be the most likely candidate to face nationalist Ollanta Humala in a second round of voting for Peru’s next president. With almost 85% of the votes counted, Humala had garnered 30.8%, García 24.7% and Flores 23.6%. Throughout the election campaign, market-friendly conservative Lourdes Flores had been the favorite to battle it out with Humala in a run-off but it looks as if García’s platform of spending succeeded in attracting a larger number of the country’s 25% of swing voters, in particular the younger voters who remember little of García’s previous period in charge. García was president of Peru between 1985 and 1990; by the time he left office, the country was suffering from hyperinflation and rebel insurgency. Interestingly, Flores was well ahead of her rivals in the votes cast abroad: she polled 62.2% against 8.5% for García and 8.0% for Humala.