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Showing posts from July, 2009

Chile Economy Showing Signs of Recovery, Finance Minister Velasco Says

By Nathan Gill and Sebastian Boyd July 23 (Bloomberg) -- Chile’s economy may be starting to recover from its slump as extra government spending spurs growth, Finance Minister Andres Velasco said today.
Velasco has spent more than $4 billion this year on tax cuts and extra outlays. He will pull $8 billion from Chile’s offshore savings funds in 2009 to help pay for the stimulus as well as to plug the budget deficit caused by slowing growth and lower receipts from mining.
Chile is facing the deepest recession since 1999 after revenue from exports declined and a virus ravaged its salmon farming industry. The economy shrank faster than forecast in the first half and probably contracted in the second quarter from the first, the central bank said on July 8.
“These policies have effects, but they don’t occur overnight, they don’t happen in one month or one quarter,” Velasco said. “We have to continue working, we have to keep a cool head and at the same time be prudently optimistic.”
The gove…

Zell’s Fund Chases Brazil Assets as Economy Recovers

By James Attwood and Nathan Gill July 23 (Bloomberg) -- Sam Zell’s Equity International is seeking new real estate-related investments in Brazil as record low interest rates accelerate growth in Latin America’s biggest economy. Equity International is looking to tap Brazil’s “relatively immature” commercial real estate finance business after selling assets in Mexico and Chile, Chief Strategic Officer Thomas McDonald said.
“Right now some of the most interesting investments in the world are in Brazil,” McDonald said today in a telephone interview from Chicago. “We see ourselves making investments in a couple more companies.”

Falling interest rates, political stability and a “solid” currency make Brazil stand out among large emerging markets, McDonald said. His firm’s five investments in the country were worth $718 million as of July 6, or about 56 percent of its global portfolio.

“I am very bullish on real estate,” said Alexander Kazan, vice president for Latin America equities at Auerb…

Salmon Prices May Rise 20%, Chile’s Multiexport Says

By Nathan Gill and James Attwood      July 22 (Bloomberg) -- Salmon prices, which gained as much as a third in the U.S. this year, may extend the rally as a virus hurts output in Chile, the nation’s biggest publicly traded producer said.      Prices may rise a further 20 percent this year amid tumbling output in Chile, the world’s second-largest supplier of the fish, said Jason Paine, head of the U.S. unit of Puerto Montt, Chile-based Multiexport Foods SA. Exports to the U.S. could fall as much 60 percent by year’s end, he said.      “Realistically we could see a 10 to 20 percent price increase globally,” he said. “In the next six months we are going to see the impact of this disease in the U.S. market.”      An outbreak of Infectious Salmon Anemia, or ISA virus, has swept through farms off southern Chile’s Chiloe Island, forcing early harvests and emptying once-teeming cages. That’s driving up global prices as U.S. grocers and restaurants turn to alternative salmon suppliers in Nort…

Chile's CMPC Rallies on Speculation Pulp Outlook Is Improving

By James Attwood and Nathan Gill      July 20 (Bloomberg) -- Empresas CMPC SA, Chile’s second-biggest pulp producer, rose the most in 10 weeks on speculation that recovering demand and prices will boost earnings.      CMPC, controlled by Chile’s Matte family, climbed 6.7 percent to 15,591 pesos in Santiago trading. It was the biggest jump since May 8.      The global market for pulp products is beginning to show signs of recovery as demand from China increases, Santiago-based newspaper Diario Financiero reported today, citing CMPC General Secretary Gonzalo Garcia. The BHKP index of pulp prices has risen 7.8 percent since a late April low, while the weekly NBSK price has rallied 10 percent since March.      “Pulp prices are rising in international markets,” Cesar Perez-Novoa, an analyst with Celfin Capital, said in a telephone interview from Santiago. “That may be being priced into the stock.” The newspaper article is “driving the price of the stock as well,” he said.      Empresas Co…

Chile's La Polar Rises Most in 2 Weeks on Demand Speculation

By Nathan Gill      July 13 (Bloomberg) -- Empresas La Polar SA, a Chilean retail company that targets middle-income earners, climbed the most in two weeks on speculation that central bank measures to reduce credit costs will boost consumer demand.      The department-store owner rose 2.6 percent to 1,940 pesos in Santiago trading, extending a three-day advance to 6 percent. Today’s gain was the biggest since June 25.      Chile’s central bank cut its benchmark interest rate to a record 0.5 percent last week and offered banks that same rate for loans of up to six months in a bid to pull South America’s fifth-biggest economy out of its deepest slump in a decade. Central bank President Jose De Gregorio said July 10 that policy makers’ steps should lead to less expensive consumer loans.      “With the new measures it means that the lowering of the central bank’s interest rate will have a faster effect on consumer credit,” Trinidad Bone, an analyst at BCI Corredor de Bolsa, said in a tel…

Enjoy Raises $42 Million in First Chile IPO This Year

By Nathan Gill      July 8 (Bloomberg) -- Enjoy SA, a Chilean casino operator, raised 23.1 billion pesos ($42 million) in the Santiago stock exchange’s first initial public offering this year.      Enjoy sold 462 million shares for 50 pesos each, the Santiago-based company said in a statement today. The stock fell 1 percent to 49.48 pesos in trading.      Enjoy sold shares after shelving plans last year amid a plunge in the equity market that sent Chile’s Ipsa index down 22 percent, the most in a decade. The Ipsa has rallied 29 percent so far in 2009 after the central bank cut its benchmark lending rate to a record low and the government started spending savings from copper exports to bolster the economy.      “The market was ready for this now,” Chief Executive Officer Francisco Javier Martinez said in a ceremony at the stock exchange. “Demand was much more than I expected.”      The IPO is the country’s first since Azul Azul SA, owner of soccer club Universidad de Chile, went publi…

Enjoy to Sell Shares for 50 Pesos Each in Chile IPO

By Nathan Gill      July 8 (Bloomberg) -- Enjoy SA, a Chilean casino operator, said it will sell shares for 50 pesos each in the Santiago stock exchange’s first initial public offering this year.      The company will announce the full amount raised at a ceremony at the exchange today, according to a statement posted on the Web site of the country’s securities regulator last night. The Santiago-based entertainment and hospitality chain with operations in Chile, Argentina and Croatia planned to sell 462 million shares, or a 30 percent stake in the company. The stock is scheduled to begin trading today.      Enjoy is selling shares after shelving plans last year amid a plunge in the equity market that sent Chile’s main stock index down the most in a decade. The IPO, the country’s first since soccer club owner Azul Azul SA went public in November, may spur more new listings as the market recovers, said Raul Barros, an analyst at FIT Corredores de Bolsa in Santiago.      “Enjoy’s IPO rep…

Chile's Soquimich Falls Most in Two Weeks on Demand Outlook

By Nathan Gill      July 6 (Bloomberg) -- Sociedad Quimica y Minera de Chile SA, Chile’s biggest fertilizer producer, dropped the most in two weeks on concern that a slump in grain prices may limit demand for the company’s products.      The Santiago-based company known as Soquimich fell 1.3 percent to 19,674 pesos in Santiago trading, the steepest decline since June 22.      Corn futures fell to the lowest in four months in Chicago as favorable weather in the U.S., the world’s biggest grower and exporter of the crop, improved the outlook for yields. Soybean and wheat prices also fell as U.S. economic concerns spur a shift by investors away from commodities to the dollar.      Falling grain prices may signal agricultural producers will spend less on the fertilizers the company markets, Juan Carlos Parra, an analyst at CorpResearch SA, said today in a telephone interview from Santiago.      “If grain prices fall, agricultural producers have less margin to absorb the costs of their sup…

Latin America Ministers Urge More Money for Lenders

By Sebastian Boyd and Nathan Gill      July 3 (Bloomberg) -- Finance ministers from North and South America meeting in Chile agreed to push for more financing for multilateral lenders such as the World Bank and the Inter-American Development Bank, Chile’s Andres Velasco said.      The IDB’s board may agree to vote for a capital increase at its meeting in March, Velasco said today in Vina del Mar.      The biggest risk facing Latin America is the inability to refinance debt because of tight credit conditions, the World Bank said in a report published today. Companies and governments in Latin America may need to borrow as much as $180 billion this year, World Bank President Robert Zoellick said yesterday.      “There are a group of countries, which doesn’t include Chile, that face significant financing needs in 2009,” Velasco said. “There was consensus at today’s meeting to ask for a more active role for multilateral credit institutions.”      Chile will forward Latin America’s request…

Carstens Sees No Reason for Mexico Credit Rating Cut

By Nathan Gill and Jens Erik Gould      July 3 (Bloomberg) -- Mexican Finance Minister Agustin Carstens said the country doesn’t have debt problems and there’s no reason for rating companies to cut its credit rating.      “We have a strong economy. We don’t have any external payment problems,” Carstens told reporters today at a meeting of finance ministers in Vina del Mar, Chile. “We are going to accomplish our fiscal objective.”      Mexico may propose tax increases as part of a bill aimed at strengthening public finances that the government plans to submit in September, Carstens said. The government may also include “spending adjustments” and debt increases as part of the proposal, he said.      Fitch Ratings and Standard & Poor’s have placed Mexico’s BBB+ credit-rating, the third-lowest investment grade level, on negative outlook because of concern the recession and a dependence on oil revenue are swelling the government’s budget deficit. The government and central bank have u…

Bachelet Says Chile Supports Recapitalization of IDB

By Sebastian Boyd and Nathan Gill      July 3 (Bloomberg) -- Chilean President Michelle Bachelet said her government supports the recapitalization of the Inter-American Development Bank to help developing countries cope with declining capital flows.      Bachelet, speaking today to finance ministers from North and South America, urged member governments to help raise additional funding for the multilateral lender.      “It can’t be that a region of healthy economies, of entrepreneurs and investors with a desire to move ahead, misses the opportunity because of a lack of adequate financing conditions,” Bachelet said in Vina del Mar, Chile. “It is more necessary than ever to support the process of recovery and development of our economies.”      Companies and governments in Latin America may need as much as $180 billion this year, World Bank President Robert Zoellick said yesterday. Canada yesterday offered $4 billion of temporary callable capital, Finance Minister Jim Flaherty said.   …

Chile's La Polar Falls as Jobless Data Signals Consumer Slump

By Nathan Gill      July 2 (Bloomberg) -- Empresas La Polar SA, a Chilean department store operator, fell to the lowest in a month on concern higher-than-expected unemployment in the U.S. and Chile may crimp consumer spending at the company’s stores. La Polar slid 2.6 percent to 1,910 pesos in Santiago trading, the lowest since May 27.      Employers in the U.S. cut more jobs than forecast in June and the unemployment rate rose to the highest in almost 26 years, according to U.S. Labor Department figures released today in Washington, adding to concern that a prolonged global recession will force Chilean companies to fire more workers as demand for the nation’s exports shrinks. Chile’s jobless rate rose 4.1 percent to 10.2 percent in May, the National Statistics Institute said June 30, higher than the 10.1 percent median forecast of 13 economists in a Bloomberg survey.      U.S. jobless data “signals that the recovery is going to be slower than what many thought,” Patricio Hernandez, …