Attracting Chinese tourists to visit Chile

The growth of stock markets in Latin America

The Latin Business Chronicle published a story today which technically, was supposed to focus on the growth of Colombia’s stock exchange and explain why it was the regions best performer last year.

In addition to Colombia, the article also shares data complied by Economatica on the growth of the other major stock exchanges in the region, which is what CSA will be sharing with you today.  To read the full article from the Latin Business Chronicle click here.

Colombia – Best performer in Latam last year, IGBC (Colombia’s benchmark) stock index has grown in value by 927.9% during the past 10 years, and average decline in value of transactions in 2008 was 2.3%—lower than all other countries in the region

Brazil – Latin America’s largest stock market, Ibovespa (Brazil’s benchmark) stock index has grown 301.3% during the past 10 years, and the average decline of transitions in 2008 compared with 2009 was 13.6%.

Mexico – IPC (major benchmark index in Mexico) has grown 250.5% during the past 10 years, and the average decline in transactions last year was 13.9%

Venezuela – The Caracas stock index has grown by 916.5% during the past 10 years, and the average decline in transactions was 29.5% last year—the second worst in Latin America.

Argentina – The Merval inces has grown by 321.3% during the past ten years, and had the worst average decline in transactions last year, suffering a decline of 54.4%.

Peru – The Lima stock index (IGBVL) has been one of the regions best performing in the past few years.  Seeing growth of 671.1% during the past 10 years, and a decline in average transactions last year of 21%.

Chile – Last but not least, Chile’s IPSA index has grown by 218.8% over the past 10 years, and the average decline in transactions last year was a mere 3.6%-second best next to Colombia.

China’s private sector ventures into Latin America

A private Guangdong based firm by the name of Rixin Development, has reached an agreement to buy a majority stack in the ownership of a Chilean iron ore mine.

Rixin Development will acquire a 70% stake in the Chilean property.  Such a deal shows the power of China’s up and coming company’s.  For starters,  Rixin Development is listed only on a local provincial enterprise information website,  sdwin.com.  The company does not have its own home page.  Officially it is a “trader for home appliances, textiles, auto parts and so on, and importer and exporter of various products and technologies.” However, I wish any readers the best of luck if they undertake the challenge to find any further information from a official company medium.

If you follow Alibaba.com’s 101 on how to avoid being scammed in China, such a deal should probably send alarm bells off.   Perhaps in the post, economic-recession world of 2010, the traditional elements which define a professional entity are no longer necessary.  Especially when your a developing Latin American country hungry for investment… or a private investor in China, STARVING for investment opportunities in a very over-saturated market with little options on where to park your capital and have it grow at the same time.  It is clear, the deal is going through and that the company is legitimate.

Li Zihao, president of Rixin was recently quotes saying, “privately-owned companies are in a better position to invest in overseas natural resources.” Time will tell if this is actually true, or if the central government is content with allowing such a dynamic to emerge.

Read a more comprehensive article on the facts (which are known) surrounding this deal via this article over at ChinaMining.org.

Chile stands up for fellow developing nations

South-South Cooperation politics at their finest according to CSA.   Chile made headlines on various news sites this afternoon when president, Michelle Bachelet announced she wants to see China, Brazil and India have a greater role in the International Monetary Fund and the World Bank.

President of Chile - Michelle Bachelet

Today, with a few choice words, Bachelet propelled her country into global headlines on sites like Bloomberg– which usually prefer to focus on Brazil & Mexico’s stock markets, how Argentina’s political system is a mess, or when miners go on strike in Chile or Peru… Or when Huge or Evo do something which is worthy to flash on major cable news.

Click here to read a Bloomberg article which touches upon a few different elements of Bachelet’s trip to Asia, not covered here in this post.  Instead, CSA has focused on what Bachelet said in regard to China, Brazil and India’s.  Summed up with the following excerpt (taken from the same Bloomberg article linked above).

Before the recent global slump, the Washington-based bodies “were not representative of global realities,” she said. “There are countries like Brazil, India and China that are world powers and economic powers and that have very little representation.”

Bachelet also questioned the custom that the president of the World Bank always comes from the U.S. while leadership of the IMF goes to a European.

The lack of representation from developing countries at global institutions has contributed to several crises, Bachelet said, such as the record high prices of wheat, corn last year.

South American Stock Markets; weekly roundup

South America: An Analysis of Arms Races and Regional Geopolitics

A insightful analysis on the ongoing arms build up occurring in South America was released on Tuesday, October 20 by Council on Hemispheric Affairs (COHA). You can access the full analysis, written by research fellow Alex Sanchez if you sign up to be a (free) member of MercoPress.

Img: MercoPress

MercoPress is an independent news agency based in Montevideo, Uruguay focused on delivering news related to South America, Mercosur-member countries and covering an area of influence which includes the South Atlantic and insular territories.

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In mid-September, Secretary of State Hillary Clinton critiqued Venezuela’s leader Hugo Chavez for his ongoing purchases of mostly Russian military equipment, arguing that this could trigger an arms race in South America. The statement has added fuel to the ongoing discussions about what form South America’s rearmament is taking and what this could come to mean for the security of the region.

The aim of this paper is to discuss the major arms purchases now going on in South America and the likelihood of inter-state war breaking out as the result. Ongoing reports about major purchases by Venezuela, Brazil and Chile tend to blur the actual geo-security situation in the region, as several countries, with Argentina as the most prominent example, have carried out only limited military acquisitions. The common perception is that an arms race raises the possibility of inter-state war; however, the reality in South America (and Central America as well) is that inter-state warfare has seldom occurred since World War II. Additionally, regarding the arms race in South America, it is misleading to assume that all South American countries are carrying out their arm purchases with the same gusto as Brazil, Chile and Venezuela.

It is generally assumed that South America is either already engaged in an arms race or is about to enter one. This is somewhat inconsistent because the start of an arms race is not easily defined. It could also be argued that what is occurring is not so much a general arms race as it is a product of certain militaries capitalizing on weak civilian governments (an updated version of former Uruguayan President Bordaberry in 1973) to increase their defense budgets. Furthermore, in spite of domestic security issues in several South American countries, most notably the insurgent movements in Colombia and Peru as well as occasional inter-state tensions, the reality is that inter-state wars in the region have been notably scarce in the past few decades, which raises the question: is interstate warfare necessarily the future of South America? The final section of this article will discuss whether an arms race could lead to general warfare.

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Click here to access the full analysis from MercoPress

Chile, Copper and BHP Billiton

Newswire / CSA Commentary –

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Chile copper output rises 7.8%

Copper output in Chile, the world’s biggest producer, rose 7.8% in August from a year earlier after state-owned Codelco and BHP Billiton boosted production, the government said.

Output increased to 459,823t from 426,689t a year earlier, the country’s national statistics agency said in a statement distributed in Santiago today.

Click here to access the complete article

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Likewise, as this next article exhibits, BHP’s full year profit forecast may be substantially larger than previously thought…

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BHPB profit forecast raised 22% on copper, RBS says

BHPB’s profit after tax may be US$10.68 billion in the year ending June 30, analysts led by Warren Edney said in a report dated yesterday. Profit may be US$14.9 billion in the year ending June 30, 2011, up 11% on an earlier forecast, he said.

Click here to access the complete article

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However, we’ll see how this all plays out when BHP’s workers meet next week to vote a potential strike

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BHPB Chile copper workers to vote on strike next week

BHP Billiton workers at the Spence copper mine in Chile will vote whether to go on strike next week after rejecting the company’s latest pay offer, a union official said…

Workers may start a strike on October 3 for an indefinite period if they fail to get more of a pay increase, Mr Ramirez said yesterday…

Click here to access the complete article

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All while yet another big player in the copper sector ups their 2010 forecast of avg copper prices

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Chile’s Sonami sees 2010 avg copper price $2.50/lb

Chile’s second biggest mining association, Sonami, expects the average price of copper to rise by up to 19 percent next year, which might encourage the continuation of more copper projects in the South American nation, its president told Reuters on Monday.

The average copper price may rise to $2.50 per lb in 2010 from an average of $2.10 to $2.30 this year, Sonami’s Alfredo Ovalle said in an interview at a forum in Santiago.

Click here to access the complete article

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Chile cuts interest rate to record low; Peso falls

Chile’s central bank lowered interest rates to record lows today. This
is the country’s latest effort to stimulate a slowing economy which is
heavily dependent on global prices and demand for its commodity
exports.

Not good news for a country like Chile. Copper demand (its primary
commodity export) looks set to slow in the upcoming months as demand
from China wanes, which until recently had been stockpiling resources.
This seems to be over and now one of Chile’s primary buyers is
sitting on mountains of unused copper. Once again, not good for
Chile, Peru or any other countries that sell their metals to China.

Bloomberg reports:

The currency slipped 1.1 percent to 552.65 per U.S. dollar at 9:15
a.m. New York time, from 546.85 yesterday.

The central bank said in May and June that traders were overestimating
the future path of interest rates. Now it will offer banks six-month
loans that match the new overnight rate of 0.5 percent and cut sales
of its own debt to push yields lower.

“It is necessary to increase monetary stimulus,” the bank said in
yesterday’s statement. “The policy rate will be held at this minimum
level for a prolonged period of time.”

To access the entire article from Bloomberg please visit:
http://www.bloomberg.com/apps/news?pid=20601086&sid=alxLFHEdnThQ

–
Sent from my mobile device

Benito
International Trade Consultant
Mir Global Marketing LLC
http://www.mirglobalmarketing.com
http://www.chinasouthamerica.com

Newswire: Latin America

Latinamerica foreign trade forecasted to contract 9 to 11% in 2009
The main impact for Latinamerica of the global financial crisis and economic slowdown has been the contraction of trade, so far in the range of 9 to 11%, revealed Alicia Bárcena, Executive Secretary of the UN Economic Commission for Latinamerica and the Caribbean, Cepal.

“The strongest impact we are seeing in the region is the fall in trade volumes. I believe that the “shock” of the contraction of global demand for our goods and services is our most relevant issue”, said Bárcena in an interview with the Cuban daily Granma.

She recalled that when the last big crisis Latinamerica’s foreign debt was equivalent to 24% of GDP, while in 2008 it had dropped to 8%.

Latinamerican Liberals hold congress in “Bolivarian” Venezuela
Liberal political parties and thinkers from Latinamerica are holding their annual congress this week in the Venezuelan capital Caracas. The event is in the framework of the 25th anniversary of the local branch Cedice-Libertad and will promote debates on liberal policies to address poverty and the current global slowdown.

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The congress is bound to spark some reaction among President Chavez followers since his Bolivarian revolution and XXIst Socialism stand at the opposite end of the political spectrum from the Liberals and the concept of individual freedom.

The two events will be taking place during a particularly sensitive week since President Chavez has ordered the nationalization of oil industry subcontractors, banks, steel industry, food processors and farm land considered idle.

Foreign direct investment to Latam reached 139 billion USD in 2008
Direct foreign investments in Latinamerica and the Caribbean are showing a significant resistance to the global crisis and in 2008 reached a record 139 billion US dollars, up 9.4% from the previous year according the United Nations Conference on Trade and Development.

Latinamerica’s bicentennial independence festivities begin in Bolivia
Bolivia’s commemoration on Monday May 25th of the 200th anniversary of the first uprising in Latinamerica against the Spanish colonial empire will also mark the beginning of similar independence celebrations along the continent which will peak in 2010.

Third re-election running “inappropriate” admits Colombia’s Uribe
Colombia’s President Alvaro Uribe says it would be “inappropriate” for him to seek a third consecutive term. His statement comes two days after the Senate approved a referendum that would ask voters to permit him to run again. Uribe did not, however, clearly rule out a re-election bid.

Newswire: South-South Cooperation

[China - Venezuela] — CNPC, Venezuela Plan to Build Two Oil Refineries in China
China National Petroleum Corp. and Venezuela plan to build two oil refineries in China, Jiang Jiemin, the president of the Chinese company, told reporters in Beijing today.

[China - Trinadad & Tobago] – Alutrint: Chinese labor needed due to lack of local expertise
China’s EXIM bank placed as a condition on its consent to provide a US$400mn loan to the Trinidad & Tobago government to build the Alutrint aluminum smelter – in the La Brea region of Trinidad island – that the project hire Chinese contractor CMEC to provide labor and technology for the plant, Alutrint manager of communications and community relations Josieann Richards told BNamericas.

[China - Russia] – Chinese Envoy to Russia: Oil Pipeline Serves Strategic Goals of Both Sides
The construction of the China-Russia oil pipeline conforms with the strategic goals of China and Russia to diversify the former’s energy imports and latter’s energy exports, Chinese Ambassador to Russia Liu Guchang has said.

[South Korea - Peru] — Peru hopes to complete 70% of FTA talks with Korea this week
Peru hopes to complete 70 percent of free trade negotiations with South Korea this week because of the similarities found between the two negotiating teams, allowing them to progress quickly, Peruvian chief negotiator Nathan Nadramija said Monday.

During the first round of FTA Negotiations in Seoul on March 16, both countries successfully concluded four chapters relating to electronic commerce, border services, as well as two other chapters related to institutional issues.

[India - Argentina - Bolivia] — Jindal Begins Producing Gas in Bolivia for Export to Argentina
India’s Jindal Steel & Power has started producing natural gas in Bolivia that will be exported to Argentina, a company executive told Efe on Monday.

Luis Carlos Kinn, manager of Jindal subsidiary Gas to Liquids Internacional S.A., confirmed the successful completion of the first production test at the well drilled in the El Palmar field, some 50 kilometers (31 miles) from Santa Cruz, the capital of the likenamed eastern province.

[Chile - Bolivia] – Chile Open to Tunnel Proposal Giving Bolivia Access to Sea
The Chilean government is willing to study the proposal by a group of architects that would provide landlocked Bolivia with access to the sea through a tunnel to an artificial island in the Pacific Ocean.

[Venezuela - Angola] — Venezuelan Government Bank BANDES To Open Branch in Angola
Jesus Alberto Garcia, Venezuelan ambassador to Angola, stated in an interview with Radio Nacional de Angola that Banco de Desarrollo Económico y Social de Venezuela (BANDES), the state development bank of Venezuela, will open a branch in Angola. He added, “This is one of the main things President Chavez wants to do with Africa.” Branches of BANDES outside of Latin America and the Caribbean include Syria and the Republic of Mali.

[Latin America - Spain] — Spain Wants Closer Ties with Latin America
Spain’s King Juan Carlos and Prime Minister Jose Luis Rodriguez Zapatero said Monday that the upcoming bicentennials of Latin American independence should be used to promote Spanish and European Union ties to the region.