Peru is becoming center of South America, President Garcia says

Today in Peru

Peru is growing, developing and becoming the center of South America, said President Alan Garcia at the signing of the concession contract for the Yurimaguas-Nueva Reforma fluvial port.

“We may not be the largest country, we may not be the most advanced one, but we’re becoming the center of the continent.”

According to the head of state, this is possible thanks to Callao, the largest port of the south Pacific Coast, as well as to Jorge Chavez international airport, which reports thousands of arrivals and is to start an expansion process in the next two years.

In addition, the construction of the new fluvial port will also turn the Alto Amazonas region into the center of the continent.

The port is part of the Amazonas Norte Interoceanic Highway which links the Pacific coast to the Amazon basin and the Atlantic coast. It will handle both passengers and cargo. (Andina)

Today in Peru

Monday, May 30, 2011 Andean Nations Overtaking Mexican Stock Exchange Lures ING, Global X Funds

Today in Peru

The integration of stock trading in Chile, Colombia and Peru is prompting ING Groep NV (INGA) to create a mutual fund that invests in the three countries, Global X Funds to start a regional exchange-traded fund and Colombia’s Helm Bank SA (PFBHELMB) to form an alliance with Chile’s Empresas Penta SA.

Trading on the new exchange, known as MILA, began today, more than six months after the exchanges in the three countries agreed to allow cross-border transactions and create Latin America’s second-biggest stock market after Brazil.

The combined size is luring financial-services firms looking to take advantage of an increase in trading volume as companies such as Chile’s Lan Airlines SA (LAN), Colombia’s Interconexion Electrica SA and Peru’s Grana y Montero SA are stepping up their regional operations.

“There’s significant capital market integration and we see more companies like Lan becoming regional players and acquiring assets across borders,” said Bruno del Ama, chief executive officer of Global X Funds, an exchange-traded fund company that manages $1.8 billion.

The integration initially will allow trading across the three exchanges before creating a single platform in a second stage. Mexico and Panama may join the MILA as part of a regional agreement signed last month. Bogota and Lima plan to take the arrangement a step further by completing Latin America’s first merger of exchanges.

‘Larger Flows’

Integration gives the Andean region a leg up with U.S. funds that look to Brazil for larger trading volume, said Fernando Carrera, a fund manager in Peru for ING, the largest Dutch financial-services company. “Our first requisite is liquidity, we must gain larger flows,” Carrera said by telephone from Lima.

ING received approval from Peruvian regulators this month for its ING Mercados Integrados FMIV mutual fund. Global X Funds launched in February the Andean 40 ETF that invests in the 40 largest MILA companies. Bogota-based Helm’s alliance with Santiago-based Penta will allow clients to buy Chilean stocks with Colombian pesos, according to a May 24 statement.

Combined MILA stocks have a value of $655 billion, surpassing Mexico’s $468 billion, according to data compiled by Bloomberg. Average daily traded volume in the past year was $216 million in Chile, $93 million in Colombia and $29.3 million in Peru. That compares with Mexico’s $639 million and Brazil’s $3.79 billion.

Chile’s benchmark index, the IPSA, has outperformed its MILA peers so far this year with a 1.6 percent retreat. Peru’s IGBVL has declined 7.2 percent in the same period while Colombia’s IGBC has slumped 6.7 percent. The main indexes in Brazil and Mexico have both fallen 7.5 percent.

Lure IPOs

MILA will attract more initial public offerings on the three exchanges from companies looking to tap the region’s combined savings pool, said Andres Gomez, chief of operations at Bogota-based brokerage Serfinco SA, which manages about $1.5 billion in assets.

“A market with more depth and volume will attract more IPOs; that’s one of the reasons this was created,” said Gomez.

Brokers in the region are seeking cross-border alliances so they can place orders in other countries. Beginning as soon as next year, they will standardize platforms to trade directly in all three markets as regulators sync clearing and settlement rules, according to a report by Santiago-based Larrain Vial SA.

Delays, Politics

MILA’s launch was pushed back three months after Peru’s congress delayed passage of a law standardizing capital gains taxes. Larrain Vial said tax codes vary: the dividend tax, for instance, ranges from 4.1 percent in Peru to 33 percent in Colombia to as much as 40 percent in Chile.

“The tax issue causes skepticism,” said Santiago Abugarade, Latin American equities market manager at Celfin Capital. “It’s a point to be resolved.”

Politics pose other obstacles. It isn’t clear who will fill the shoes of outgoing Peruvian President Alan Garcia as the “driver” of MILA and regional economic integration, said Michael Shifter, president of the Inter American Dialogue in Washington, a policy research organization.

“We’ve seen comparable initiatives, and frustrations usually stem from distrust and political problems,” he said. “I don’t think those problems have completely disappeared.”

Blake Schmidt and Eduardo Thomson - Bloomberg

To contact the reporters on this story: Blake Schmidt in Bogota bschmidt16@bloomberg.net Eduardo Thomson in Santiago at ethomson1@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

Westin Lima Hotel opens in financial district

Today in Peru

Peruvian President Alan Garcia Perez participated on Friday in the opening ceremony of the Westin Lima Hotel and Convention Center, located in the San Isidro financial district.

The ribbon-cutting ceremony, held at 12:00 (17:00 GMT), was also attended by First Vice-President Luis Giampietri, Production Minister Luis Nava, Westin Lima Hotel Chairman Mario Brescia and San Isidro's Mayor Raul Cantela.

The hotel is the country's tallest building with a height of 118.55 meters and includes 301 rooms in 30 floors. It has 700 parking spaces on its 4 basements, which have an auxiliary access in order to avoid congestion.

The conference center has the country’s largest auditorium inside a hotel (about 1700 square meters) which will enable to hold congresses and events of great magnitude.

The Westin Hotel Lima also has restaurants in ideal locations for business people where several culinary creations of the Peruvian and international cuisine will be offered. (Andina)

Today in Peru

The Peruvian Dream

Citizens of the United States and European Union arrive in Lima like illegal inmigrants to realize their "Peruvian Dream"

video:   http://www.youtube.com/user/LivinginPeruTV



video:   http://www.youtube.com/user/LivinginPeruTV

Westin Hotels makes landmark debut in South America

Today in Peru

Accelerating its global portfolio growth, Starwood Hotels & Resorts Worldwide, Inc. on Tuesday announced the opening of its first Westin hotel in South America – The Westin Lima Hotel & Convention Center in Peru.

Ideally located in the heart of San Isidro, the financial and shopping hub of Lima, Peru, The Westin Lima Hotel & Convention Center features 301 rooms and the largest meeting and convention facilities in Peru.

“We are delighted to make our landmark entry in South America, where we expect to aggressively grow the Westin brand over the next decade,” said Brian Povinelli, global brand leader for Westin Hotels & Resorts. “The Westin Lima Hotel & Convention Center is a superb representation of the Westin brand. Our distinctive positioning resonates well with international travelers and we are excited to bring the Westin experience to another new market.”

The debut of Westin in Peru comes on the heels of the brand’s recent entry in Costa Rica, with the opening of its first all-inclusive resort – The Westin Resort & Spa, Playa Conchal. Westin is also poised to make its debut in Panama with the upcoming openings of The Playa Bonita followed by The Westin Panama, and increase its presence in Mexico with the upcoming opening of The Westin Guadalajara this September.

“Starwood’s growth leader in Latin America is Westin Hotels, which is set to double its portfolio in the region by 2012,” said Osvaldo Librizzi, President of Starwood Hotels & Resorts Latin America. “Fueled by the success of Westin, we are experiencing strong demand from owners and developers for all of our world-class brands across Latin America, strengthening Starwood’s position as the largest four and five star hotel operator in the region.”

The Westin Lima Hotel & Convention Center is opening under a franchise agreement between Grupo Libertador and Starwood. The two companies previously partnered to open two Luxury Collection properties: Hotel Paracas Resort in 2009 and Tambo del Inka Resort & Spa in 2010, located in Valle Sagrado, near Machu Picchu.

An ideal venue for weddings, social galas and business functions, The Westin Lima Hotel & Convention Center boasts more than 28,000 square feet of space, including 10 meeting rooms and a grand ballroom. Additional facilities include a three meal restaurant and a fine dining restaurant headed by chef Rafael Piqueras. The hotel also features an In Site Bar to enjoy international cocktails, lobby lounge, and an additional lounge on the 29th floor. Designed by Miami-based Arquitectonica and renowned New York designer Tony Chi, The Westin Lima Hotel & Convention is a notable addition to the Lima skyline.

“We’re delighted to celebrate the grand opening of this world-class hotel which now stands as an iconic landmark in this city,” said Jorge Melero CEO of Grupo Libertador.

In their rooms, hotel guests will awaken their senses with the Westin Heavenly Bath® experience and restore in the Heavenly Bed®, a 10-layer ensemble of luxurious comfort featuring a pillow-top mattress set, a cozy down blanket, three crisp sheets, a comforter, duvet and five plush pillows. Rooms are also equipped with high-speed Internet access and an ergonomic work space to enhance guest productivity and creativity in a tranquil setting.

As part of the Westin brand’s commitment to preserving wellness on the road, The Westin Lima Hotel & Convention Center features a 24-hour WestinWORKOUT® gym, an indoor pool and the SuperfoodsRX menu designed by experts to keep guests on top of their game with incredible food combinations rich in nutrients, antioxidants and flavor. Located on the second floor of the hotel, the Heavenly Spa by Westin features 14 treatment rooms and a choice of signature Heavenly treatments created by Comfort Zone, the luxurious Italian spa brand.

With the addition of the new Westin Lima Hotel & Convention Center, Starwood now has nine Westin Hotels in Latin America, six Westin hotels in Mexico, one in Guatemala and one in Costa Rica. Overall, Starwood Hotels & Resorts now has 65 hotels and resorts in 13 countries in Latin America. (Andina)

Today in Peru

Peru’s GDP soared 7.87% in March

Peru’s Gross Domestic Product (GDP) soared 7.87 percent in March 2011, capping 19 months of consecutive growth, reported Monday Peru’s National Statistics Institute (INEI).

This way, the growth of the GDP was 8.80 percent during the first three months of the year, while the period between April 2010 and March 2011 rose 9.43 percent.

In February, Peru's GDP expanded 8.53 percent. In this month, the agricultural and livestock activity increased 5.07 percent driven by livestock sector (7.71 percent) and agriculture sub-sector (2.08 percent).

Meanwhile, construction and trade soared 4.90 percent and 10.84 percent, respectively, in the same month. (Andina)

McCartney arrives in Peru for historic concert

Rock royalty Paul McCartney has arrived in Lima, Peru for his first-ever concert in the South American country on Monday, May 9.

Sir Paul McCartney, one of two surviving members of the Beatles, landed in the Peruvian capital just after 10.00 am on Sunday.

The 68-year-old singer-songwriter was welcomed by dozens of journalists, photographers and screaming fans upon arrival at Jorge Chavez International Airport.

The British musician then headed to a hotel in Miraflores, where more eager fans were waiting to catch a glimpse of their idol.

As soon as the music legend stepped out of his vehicle, McCartney unfurled and waved a Peruvian flag, much to the delight of the crowd.

The Monday gig, part of his Up and Coming tour, will take place at Lima’s Monumental Stadium before a 45,000-strong audience. While in Lima, the ‘Hey Jude’ hitmaker will be awarded with Peru's Order of the Cinchona Tree for his environmental work.

Expo Peru Canada kicks off today in Toronto

Expo Peru Canada trade show opens Monday in Toronto with the participation of 21 Peruvian companies in the food (12), textile (3), jewelry (1), craftwork (3), metal (1) and marble (1) sectors.

Most of these companies, which come from different regions of the country such as Cusco, Arequipa, Ayacucho, Piura, Tumbes and Lima, are small and medium enterprises (SME).

The Ministry of Foreign Trade and Tourism (Mincetur) carries out the Expo Peru fairs in order to encourage non traditional exports, boost the solution of existing obstacles to trade, attract foreign investments, strengthen Peru’s presence in the main markets and promote the image of the country.

In addition, Peru’s Tourism and Export Promotion Board (Promperu) will present some of Peru’s Top Products such as coffee, pisco and cocoa.

Other events which will be carried out in the framework of Expo Peru Canada are the gastronomic fair Peru Mucho Gusto and the Fashion Show led by designer Sergio Davila.

Furthermore, Deputy Foreign Trade Minister Carlos Posada and Promperu’s Director of Country Image Promotion Isabella Falco will offer a press conference on Peru Brand.

Peru Delays $1.2 Billion Bond Sale After Yields Jump on Election Concern

Peru has shelved plans to sell as much as $1.2 billion of bonds after yields on the nation’s debt jumped to a two-year high on concern former military rebel Ollanta Humala may win next month’s presidential runoff.

Peru’s government will wait until demand for the country’s debt recovers before selling bonds in the domestic or international market, Finance Minister Ismael Benavides said in an interview in Lima yesterday.

Peru’s stocks, bonds and currency plunged after Humala, a one-time ally of Venezuelan President Hugo Chavez, won the first round of presidential elections last month. Humala, who pledges to increase state control over South America’s sixth-largest economy, faces Congresswoman Keiko Fujimori in a June 5 runoff. The outcome of the vote will determine how soon the government can return to the debt market, Benavides said.

“It’s not a good time,” Benavides said. “We have to wait until the noise settles down. It will all depend also on who gets elected.”

Humala, who in 2000 lead a military uprising to protest corruption in Alberto Fujimori’s government, has pledged to raise taxes on miners and renegotiate contracts with foreign companies if he’s elected. His campaign platform also proposes renegotiating free-trade agreements, including one with the U.S., that the government expects will double Peru’s exports to $70 billion within five years.

Pension Concern

Reflecting concern that Humala might tamper with $30 billion managed by private pension funds to finance public spending should he win, Benavides said the government will seek to toughen laws against an Argentina-like asset grab.

Humala’s campaign platform includes proposals to force Peruvians to pay into a state pension. He also pledges introducing a free retirement plan for people 65 or older. Last week he said that the retirement plan will be financed by higher tax revenue and not assets from private pension funds which he vowed not to touch.

The yield on the nation’s benchmark sol-denominated bond due August 2020 rose to 7.4 percent on April 27, its highest since March 2009, according to data compiled by Bloomberg. The yield rose 94 basis points during March and April, the biggest two-month rise since 2008.

The cost of protecting Peru’s debt against non-payment for five years with credit-default swaps rose to the highest since July 2009 last week.

New Polls

Concern that Humala will nationalize the pensions industry probably contributed to the narrowing of his lead in polls ahead of the next month’s vote, former Interior Minister Fernando Rospigliosi said April 29.

Stocks, bonds and the sol rallied today after the results of a poll showed the candidates running neck and neck, said Gonzalo Navarro, head trader at Banco Santander in Lima. The poll by Lima-based Ipsos Apoyo, commissioned by Morgan Stanley, showed Humala favored by 39 percent of those surveyed compared with 38 percent for Fujimori. The nationwide poll from April 23- 30 had a margin of error of 2.2 percentage points.

The yield on Peru’s 8.75 percent dollar bond due 2033 fell 15 basis points to 6.12 percent at 12:04 p.m. New York time, according to JPMorgan Chase & Co. The sol gained 0.2 percent to 2.8207 per U.S. dollar.

‘Volatility’

Peru issued a record $2.5 billion of bonds in the international market in November. Benavides said April 7 that the country was seeking to sell as much as $1.2 billion of bonds to prepay more expensive debt before President Alan Garcia leaves office in July.

The nation’s public debt fell to $33.4 billion last year from $33.8 billion at the end of 2009. Public debt was equivalent to 23 percent of gross domestic product last year, compared with 38 percent of GDP in 2005.

“Obviously we have to hold back because of all this volatility,” Benavides said.

The government will be able to finance 2011 spending plans using proceeds from last year’s issuance and tax revenue that has been boosted by higher prices for Peru’s copper and gold exports, Benavides said.

“Tax revenue has been higher than expected so there’s no problem on that end,” he said.

John Quigley - Bloomberg

To contact the reporter on this story: John Quigley in Lima at jquigley8@bloomberg.net

To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net.