10: 22 Am EDT by Andrea Jaramillo and John Quigley, 06 April 2011
(Updates prices at paragraph 12).
April 6 (Bloomberg)--the debt against default Peru insurance costs are jumping to a maximum of five years from the Colombia colonel neighbours former army concern renegade Ollanta Humala will win the
presidential election and extend the control of the Government of the economy.Peruvian five-year credit default swaps pink 35 basis points since out March 20 polls showed that Humala is gaining popularity, with 154 yesterday, is 49 more than similar on the Colombia contracts, according to CMA. The gap was by 1 basis point on 16 March, the day the Standard & Poor raised credit ratings of the Colombia at the same level BBB as the Peru, citing the policies of
President Juan Manuel Santos reduce crime and attracted investments.Peru and the Colombia have benefited from increased foreign investment in the mining industry and the energy in the last decade as they recovered areas that were under the control of the guerrillas, which resulted in the most rapid economic growth for the two countries in the 1920s. Emergence of Humala in the polls before the vote of this weekend first round caused a borrowing of the Peru costs and sent the ground falling more between the currencies of emerging markets since March 20.You have a clear direction of the policy-mix in Colombia, advance, while in the Peru, you do that ", said Bret Rosen, a strategist of the debt of Latin America with the Standard Chartered Bank in New York." "The fear is that Peru will face a significant change in the investment climate."Gain PollsHumala, 48, received the support of 26 percent in a survey published on 3 April by researcher based at Lima Ipsos Apoyo, up 21 percent a week earlier, he put at the forefront among the candidates to succeed the
President Alan Garcia for a term of five years. Three candidates were virtual equality for the second place, according to the survey, Ipsos Apoyo.Humala, leader of the nationalist party of Peru and an ally of Venezuelan
President Hugo Chavez, was in fourth place in the polls in a month ago. It also consolidated its head in the polls published in the last week by IPC and Datum Internacional.While Humala has promised to renegotiate mining contracts with foreign investors he seeks to make it the sixth largest economy of the South America less dependent of exports and investments outside the chercheursSantos natural gas the Colombia, 59, is committed to avoiding "change the rules of the game" for foreign investors, said in an interview on March 31 that he would not raise taxes mining or oil. "I want foreign investors to see Colombia as a serious country,"he says.Attracted Colombia 6.90 billions of dollars of foreign direct investment in 2010 - 73 per cent of which came in oil and mining - after 7.14 billion in 2009 and a record of $ 10.6 billion in 2008, the Central Bank.Economic GrowthPeru is set to receive $ 50 billion of mining, energy investments and infrastructure over the next five years, according to the Ministry of finance. Foreign direct investment was $ 7.32 billion last year and could climb to 8.17 billion in 2011, the Central Bank estimates.In the 10 years, Colombia has recorded an average economic growth of 4.1%, compared to 5.7% in fresh Peru.The additional to the debt of the Peru instead of the Colombia is the highest since May 2006. The performance of the obligations of the Peru 6.55% dollar March 2037 reaches 27 basis points, or point percentage 0.27, to 6 per cent since March 20, according to prices compiled by Bloomberg. Performance on the % of dollar Colombian bonds scheduled for September 2037 has increased by 10 basis points during the same period to 5.98%.Worst PerformerPeru currency, soil, decreased by 1.4 percent since March 20, the worst performance among 25 emerging markets currencies, followed by Bloomberg. The General Index of Lima has fallen 6.2% in the month, the fourth worst performance among primary index 90 followed by Bloomberg. "" While everyone was expecting this is a non-event election, we have proven wrong, "said Marjorie Hernandez, a strategist at HSBC Holdings Plc in New York currency. "The market was positioned this way." Everyone was long Peru everything. "Keiko Fujimori, a member of the Peruvian Congress and the daughter of the former
President, had the support of 18 percent in the Ipsos Apoyo poll. Former
President Alejandro Toledo had 17 percent, and former Finance Minister Pedro Pablo Kuczynski had 16 percent. The survey of 2,000 people was taken from March 26 to April 1 and had a margin of error of 2.2 percentage points.A runoff between the two leading candidates will take place June 5 If no one WINS more than 50% in the first round of voting April 10 Congress. peaceful RevoltPeru has approved an amnesty for Humala in 2000 after taking control of a mining town and led a Pacific revolt in protest against corruption assailing the Government of
President Alberto Fujimori, who later fled into exile.Cynthya Montes, a spokesman for the nationalist party, did not respond to a request by email for comments.While the popularity of the Humala climbs before the first round of elections, Rosen, Hernandez and Eduardo Suarez, a strategist at RBC markets of capital in Toronto, all predict that Humala will lose in a second round ballot as voters who do not
like Humala will rally around his opponent.Suarez said in a
report on March 29 that the chance to become
President Humala is about 20 percent, and that these recent declines in asset prices are too. "The current liquidation should be seen as an opportunity to purchase, but timing is the key,"he wrote."Venezuelan ModelHumala, who said in his
presidential campaign in 2006 that foreign companies were "looting" the resources of the country, said in a televised debate this week that he supports a "open and market economy" and supports investments that create jobs. He has also distanced Chavez, who nationalized the major part of the cement industry, imposed price controls and devaluation of the currency. Humala said March 31 that "the Venezuelan Government not applicable to the Peru model".A Presidency that Humala would adversely affect investors, said Hernandez. "If Humala came to power we will certainly see a big change in policy,"said Hernandez. "I do not think that anyone who trusts that this change in the strategy of the campaign is really a change in earnest."
-Editors: Brendan Walsh, Laura Zelenko
To contact the reporters on this story: Andrea Jaramillo in Bogota to ajaramillo1@bloomberg.net; John Quigley in the jquigley8@bloomberg.net Lima
To contact the editor responsible for this story: David Papadopoulos to papadopoulos@bloomberg.net
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Opponents fear the project of dam on the River Mekong in Laos could open the way for another 10 dams. (Associated Press)