Category: Peru

Meanwhile, Peru’s currency — the sol — continues to slide for the third month in a row and has become the worst performer among Latin American currencies. The sol traded at 3.3785 per dollar as at 31 October, down from 3.2575 on 26 August, a drop of 3.6% Analysts say that low local yields have led large institutional investors to switch from local paper to US-denominated assets in search of higher returns.

Peru’s second-largest bank, BBVA Banco Continental, has issued $50 million worth of bonds in the local market. Most of the bonds were sold to mutual funds, said the bank. The bonds’ maturity is five years and 12 days and offers a rate of 1.4% plus six-month Libor.

Peru’s second-largest bank, BBVA Banco Continental, has announced a profits increase of 103% for the third quarter of 2005, compared with the same period last year. Profits of $39 million in the third quarter take accumulated earnings for the first nine months of the year to $95.2 million.

Peru is preparing to sell a fifth cell phone license to increase competition in the sector. Nextel Perú and Millicom International of the US are both reported to be interested in bidding. The most recent entrant to the Peruvian telecoms market was América Móvil, one of Latin America’s largest telecoms companies, when it bought the local operations of Italy’s Telecom Italia in August beating off rival Spanish Telefónica Móviles.

Peru has signed a hydrocarbon exploration contract with an affiliate of state-owned China National Petroleum Corp, Sapet Development Peru Inc., to operate in the south-eastern region of the country bordering Bolivia, an area with the country’s highest gas reserves.

Hunt Oil of the U.S. has filed with Peru’s securities commission to issue $150 million of bonds in the local market. Hunt has plans for a $2 billion project to export natural gas from Peru to Mexico and is due to start construction of infrastructure at the end of this year. The company also recently signed an oil exploration and production contract with the Peruvian government to operate in the south of the country.

Ex president of Peru Alberto Fujimori has confirmed that he will run for next year’s presidential elections due to take place in April 2006. At a press conference in Tokyo, Fujimori said he intended to run for president and claimed to have 30% support of the voters in Peru. Fujimori has been in Japan since resigning his presidency in 2000 and Peru has unsuccessfully sought his extradition from there to face human rights and corruption charges at home. Last month he received a new Peruvian passport.

Peru’s largest telecoms operator, Telefónica del Perú, has issued its first local currency bonds abroad. The $225 million sol-denominated paper matures in 2016. Telefónica’s issue follows Brazil’s successful first issue on 20 September, when it sold $1.5 million of real-denominated bonds to international investors.

Phelps Dodge Corp, which owns Peru’s third-largest copper mine, Cerro Verde, has said it has secured loans of $450 million to help with its expansion plans for the mine. The US company said it may replace $90 million of the financing with a bond sale in Peru. This follows a decision late last week by Cerro Verde shareholders to approve issuing bonds for up to $250 million. Phelps Dodge expects to triple annual production to 300,000 metric tons following expansion.

Peru experienced 0.09% deflation in September, making it the second month of consecutive deflation in the country after 0.18% recorded in August. This takes cumulative inflation for the nine months to end-September to 0.89%. Brazil also witnessed a fifth deflationary month with a rate of 0.53%, following August’s fall of 0.65%. Meanwhile, Colombia recorded a rise of 0.43% in September’s rate of inflation, pushed up by higher school fees at the start of the academic year, according to official sources. Cumulative inflation was at 4.42% as at end-September. And Venezuela registered 1.5% in September, meaning that cumulative inflation for the first nine months of the year is now 11.6% against 14.7% for the same period last year. Argentina is due to release its figures on Wednesday.