Financial markets are quiet two days before government change

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Two days before Alejandro Toledo hands the presidential sash over to Alan Garcia, economic indicators, local financial markets (stock market, currency exchange) and international indices (country risk factor) are relatively quiet.

Lima’s stock-market values of Lima (BVL) is showing a postive trend today. The General Index raised by 2.07%.
“The new government has sent a positive signal in choosing Luis Carranza Ugarte as new Minister of Finance and Economy”, one analyst said.

The dollar index is also stable, the current rate of $3.24 at international market has not changed since July 10. 

The country’s risk factor, which measures the capacity of dept payment, lowered by three points from 1,47 to 1,44 percent, according to investment company JP Morgan, which means that international markets believe that Peru will continue fulfilling its obligations.

“The expectations are favorable. The announcements of future cabinet members has calmed economic indicators”, commented Mario Guerrero, senior analyst of Bank Wiese Sudameris (BWS), now owned by Canadian Scotiabank. “Another factor is a solid macroeconomic foundation”, he said.

Investments

Not only the financial markets are optimistic and stable.

– Credicorp Ltd. signed a preliminary agreement to acquire the Peruvian pension fund  Union Vida AFP from the Santander Group for $142 million in cash. The deal to acquire the fund has yet to undergo due-diligence, but is expected to be completed by the end of August.

– Dubai Ports World plans to invest $430 million in Peru’s first modern container port and related infrastructure as the company expands its presence in South America.
Two days ago it signed a 30-year concession agreement with the Peruvian government to build and operate the 1.3-million TEU (twenty-foot equivalent unit) annual capacity terminal adjacent to the port of Callao outside the capital Lima.
The first phase development will cost $256 million, while $217 million will be spent on the second phase expansion.

– The local private bank "Interbank" announced to provide US$ 350 million for granting credits to the agro-industrial sector.

Export

Peru has reached US$ 20 billion in exports. In 2001, the value of exports was US$ 6.5 billion. Back then, international sales represented 12,5% of the GDP, today the percentage is 25%.
4.300 export companies were registered in 2001, now there are 6,000. Hopes are that the new government triples the number.

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