Category: Peru

Canadian Scotiabank has bought Peru’s third-largest bank, Banco Wiese Sudameris, from controlling shareholder — Italy’s Intesa in a private deal. The sale ends months of speculation regarding prospective investors. It is not yet known what Scotiabank paid for the Peruvian entity. Scotiabank is the third-largest in Canada in terms of assets. It also holds a minority stake in local Banco Sudamericano and controls Scotiabank Inverlat in Mexico.

Peru has raised its benchmark interest rate from 3.00% to 3.25%. This is the first time it has raised the rate since October last year. The currency, the sol, rose as a result from 15-month low of 3.4185 against the US dollar on Thursday. Peru’s inflation was running at 1.1% in the 12 months to November.

Meanwhile, Peru is planning to tap the domestic and international debt markets before Christmas to raise up to $832 million. The bonds are expected to have maturities of between 15 and 20 years. The money will be used to settle its debt with Japan Peru Oil Corporation (Japeco) arranged in the 1970s to build an oil pipeline for state-owned PetroPeru. The international tranche of the sovereign issue will be arranged by Citigroup Global Market Inc.

Peru and Thailand have signed a free trade agreement at the Asia Pacific Economic Cooperation Forum in Busan, South Korea. Peru hopes the accord will add $500 million in annual exports and help create 300,000 new jobs.

Peru’s fiscal deficit in the third quarter dropped to 0.8% of GDP compared with 2.1% in the same period in 2004. The government has been targeting a deficit of 1% of GDP. The government’s primary surplus was 1.3% of GDP up from an even balance in 2004.

Peru’s year-on-year growth in September registered 5.72%, slightly ahead of government forecasts of 5.5%, driven by increased activity in all sectors of the economy as well as healthy commodity exports. Economic growth for the year to September stands at 5.91%.

Lourdes Flores has strengthened her lead in the polls to win next April’s presidential elections in Peru. Her lead of 27% last month was up one percentage point in the most recent survey of voters, followed by former presidents Alan Garcia and Valentin Paniagua, now both at 17%.

Peruvian electricity producer EnerSur, owned by French group Suez, plans to float between 5% and 28% of its stock on the local stock exchange before the end of the month. EnerSur is Peru’s fourth-largest energy provider, representing 8% of the market. It provides electricity under a long-term contract to Southern Peru Copper Corporation.

Peru’s largest bank, Banco de Crédito, plans to make an international debt offering, issuing in London and New York. It will offer $280 million of four- to six-year floating-rate notes with an interest rate of Libor plus 1%.

Peru has decided to offer another fixed-line telecoms license to open up the market to competition. Currently there is only one operator – an affiliate of Spanish company Telefónica, which has dominated the market since 1994. The license will be up for public auction, with the sale organized by state investment agency ProInversión.