Peru: Morning News Roundup – Tuesday, June 12

Morning News Roundup
Lima Stock Exchange (BVL) Recap

(LIP-jl) — Lima’s stock exchange (Bolsa de Valores – BVL) began the week’s trading session by snapping a three day losing streaking that started last Wednesday. The BVL closed Monday’s trading session at 21,061 points, an increase of 1.31% from last Friday’s close. The Selective Index -ISEL (index that groups the 15 leading stocks), closed at 36.891 units, an increase of 1.62%. Some of yesterday’s most active stocks included: Southern Copper (+4.05%), Minera el Brocal (+3.77%), Milpo (+2.87%), Cerro Verde (+2.54%), and Volcan (+2.44%).

Southern Copper expects Peru labor agreements soon

Southern Copper Corp., the world’s fifth-largest copper producer, expects to reach a labor agreement with five of its eight unions in Peru this week, Chief Executive Officer Oscar Gonzalez Rocha said today. The company is holding wage talks with unions and government officials in Peru and Mexico after workers at mines in both countries threatened to strike, Gonzalez said in an interview at the company’s Lima headquarters. Strikes at two of Southern’s Mexican mines last year cut the company’s copper output by 12 percent, spurring a rally in prices. Southern’s copper production has risen 7 percent so far this year, Gonzalez said. "We hope to reach an agreement so there is no work stoppage in Peru and Mexico, where workers postponed a strike call until June 15,” Gonzalez said. "Talks involve annual wage increases and productivity bonuses similar to wage agreements at Antamina and Yanacocha in Peru and Codelco and BHP Billiton’s Escondida mine in Chile.” Southern shares rose $2.70, or 3.1 percent, to $90.65 at 3:33 p.m. in New York Stock Exchange composite trading. The shares have gained 68 percent so far this year. (Bloomberg.com)

Fujimori Supporters Lack Mobilization Capacity

Political leaders from the governing party and the opposition in Peru agreed on Monday that former President Alberto Fujimori’s followers lack the capacity to take to the streets and demonstrate in favor of their leader. Political analysts said that although they hold some seats in Congress, Fujimori’s followers are declining, a situation that will worsen after the ex president is extradited from Chile. They do not have the capacity to destabilize the country, said APRA General Secretary Mauricio Mulder, who added that the treats by the ex president’s daughter, Keiko Fujimori, are just a boast. Daniel Abugattas, from the opposition Nationalist Party, also doubts that the followers of the former head of State have the capacity to mobilize the people, unless they can pay them to do so. Carlos Bruce, a lawmaker from Peru Posible, the party of former President Alejandro Toledo, said that an eventual mobilization will have no effect. For his part, political analyst Eduardo Toche ruled out the possibility that Fujimori’s followers may be a danger to the democratic regime. Fujimori’s extradition and trial on charges of crimes against humankind and corruption will contribute to the political annihilation of his followers, as he will be isolated and repudiated by Peru’s public opinion, said commentator Carlos Reyna. (Prensa Latina)

Peru’s Intergroup to IPO

Intergroup Financial Services, the main shareholder of Peru’s Interbank filed to sell 20.9% of Interbank in a local and offshore 144a equity offering Friday. The sale of 19.23m common shares in the global offering and 18.69m common shares in a Peru offering should raise between $230m and $270m based on the indicative price range of $12-$14 a share. Pricing is set for June 20. Selling shareholders are IFH Peru Ltd, Wimsie Investments and Inversionista Golden Hill. Proceeds are for Interbank’s expansion and possible acquisitions. Citi is global coordinator and Citicorp Peru and Centura are handling the local sale (Latin Finance)

Peru Central Bank Sticks on 4.5%

Peru’s central bank held the benchmark interest rate at 4.5% Thursday, despite some analyst expectations that the higher-than-expected May inflation figures would prompt a 25bp hike. The key reference rate has now remained unchanged since May last year. (Latin Finance)