Peru: rolling back on indigenous rights?
One day Ollanta Humala, Peru’s president, is unnerving investors with a hankering for state-run enterprise, the next he is making it easier for miners to push through projects despite community opposition.
According to Reuters, Humala is on the verge of reneging on his key election pledge to give Andean indigenous communities the right to better consultation over mining projects near their homes. Continue reading »
Peru: minting new millionaires
Source: Jockey Plaza
Millionaires might seem like chump change in this age of trillion-dollar deficits and billion-dollar bailouts.
But in Peru, new millionaires are just another indicator of the kind of strong economic growth that prompted the International Monetary Fund to brand the Andean economy shock-resistant. A reverse canary-down-the-mine, if you will. Continue reading »
BB interview: Peru’s central banker warns of consumers’ foreign currency loan risks
Photo: Bloomberg
The golden pre-Incan and Incan relics on display at the lobby of the Banco Central de la Reserva del Peru, the central bank, seem like good imagery of abundance for an economy that is currently one of the region’s darlings.
“We are doing very well,” Julio Velarde, Peru’s central bank chief, told beyondbrics in his windowless office, with mahogany-covered walls. Continue reading »
Peru: curbing the sol
Like many emerging markets, Peru has been fighting a war – a currency war to be precise.
The country’s currency, the sol, jumped to a 15 year high last week after the US Federal Reserve said it would launch a third round of quantitative easing. And it looks like Lima has decided enough was enough.
The Andean country’s central bank changed its intervention strategy on Friday to increase volatility in the currency. Continue reading »
Peru cement: consolidation time
Unity makes strength. That, at least, appears to be the logic behind Cemento Andino’s move to merge into Peru’s biggest cement maker, Cementos Lima, to create the strongest player in the local market, the Andean Cement Union.
The merger is timely. The new company will create the scale needed to fend off competition from Mexico’s cement titan, Cemex, which is already importing and building a greenfield plant in Peru. Continue reading »
Peru deficit: a warning sign?
Will Peru have to start taking advantage of its international reserves and counter-cycle fund sometime in the not-so-very-distant future?
A gloomy April suggests yes. The world’s second biggest silver, copper and zinc producer and sixth biggest gold producer has logged its first monthly trade deficit since April 2008, as well as a steep drop in gold production. Continue reading »
Peru: cooking up social change
Ceviche and pisco sours are right up there with llamas, Incas and Machu Picchu when it comes to Peruvian stereotypes these days.
That’s in large part down to Gastón Acurio, the Peruvian chef who brought his Astrid and Gaston restaurant to Manhattan last year after first finding success in Spain, Brazil, Colombia, Chile and Mexico. Continue reading »
Peru: LatAm’s latest currency warrior
Has Peru replaced Brazil as Latin America’s currency warrior?
Less than two months after it said it would not impose capital controls to stem the rise of its currency against the US dollar, Peru has gone ahead and done just that.
On Monday, the Andean country said it was raising deposit requirements on bank accounts to curb credit expansion and weaken the sol. Continue reading »
Who’s afraid of a slowdown in China? Not Peru
For a country that counts China as its biggest trade partner, Peru is surprisingly sanguine about the impact that a Chinese slowdown could have on its economy.
Even as Brazil – another country that has prospered on the back of the Chinese-led commodities boom – this week revealed a sharp pull back in GDP growth for 2011 and Beijing surprised the market by reducing its annual GDP growth forecast for the first time in eight years, Peru is going the other way, revising upward its growth forecast from 5.4 per cent to 5.7 per cent. Continue reading »
Humala: investors warming up
What a difference six months can make. When Ollanta Humala was elected as Peru’s president, markets crashed and business confidence plummeted.
The onetime close ally of Venezuela’s radical leftist president Hugo Chávez had pledged a new, centrist and business friendly agenda to improve social inclusion.
Scepticism ran deep. But having sold a smidge over half of the Peruvian electorate on his “investment = social inclusion” formula, Humala also appears to be winning over investors six months on. Continue reading »
Peru’s banks are safe, for now
Hot on the heels of Blackrock rating Peruvian bonds a better bet than British sovereign debt, Moody’s has given Peru’s banking system the thumbs-up.
Thanks to dynamic, investment-led economic growth, strong earning prospects and good asset quality, the outlook for Peruvian banks is stable, even “robust”, according to Moody’s. Continue reading »
Colombia, Peru bourse fusion fizzles
Latin America’s first full cross-border merger of stock markets has ended with more of a whimper than a bang.
Colombia and Peru announced quietly over the weekend the cancellation of their plans for a corporate merger that would have created a company with market capitalisation of $378bn and trading volumes of $33bn. Continue reading »
Peru: return of the bond vigilantes
Fickle but powerful things, markets. Investors know that. So too do struggling western governments. Now it’s the turn of Peruvian president Ollanta Humala – the former coup leader and Hugo Chávez admirer who has now turned (apparently) into a middle of the road centrist in the mould of Brazil’s former president, Luiz Inácio Lula da Silva.
It was only a handful of months ago that markets were freaking out at the prospect he might become president. Yet now that Humala is installed in the presidential palace, they’re not so worried and have decided that they’re open for business after all. On Tuesday, the government returned to local debt markets for the first time in five months with a PEN300m (US$110m) 2-year bond. The issue had six times more bidders than was available. Continue reading »
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