September 19th, 2011

Economics & Finance

Chavez again threatens to nationalize Venezuela banks

Venezuelan President Hugo Chavez on Saturday again threatened to nationalize the country's private banks, arguing that they are not financing families seeking to buy a house. “We really need to keep an eye on private banks," said Chavez. "I do not have any problem nationalizing them, or expropriating them. We will not accept that banks continue to joke around with people who do not have a home.” (Latin American Herald Tribune, 09-19-2011; http://www.laht.com/article.asp?ArticleId=425910&CategoryId=10717)

Financial controls damage Venezuelan competitiveness

According to overall rankings in The World Economic Forum’s Global Competitiveness Report for 2011-2012, based on World Bank data, Venezuela ranks 124^th in global market sophistication. Its’ low ranking is due to the removal of financial market instruments and obstacles to foreign private investment essential to productivity. (El Universal, 09-19-2011; http://www.eluniversal.com/2011/09/19/financial-inflexibility-hits-venezuelas-competitiveness.shtml)

CAN re-entry considered best deal for Venezuela

Most analysts agree that member countries of the Andean Community have made great strides in tariff and economic integration, whereas Venezuela remains stagnant by applying dated rules. Both Colombian and Venezuelan private sectors, plus the Secretary General of the Andean Community, Adalid Contreras, suggest reinstating Venezuela into the multilateral group in order to promote trade, which has fallen to unprecedented levels. More in Spanish at: (El Mundo, 09-19-2011; http://www.elmundo.com.ve/noticias/economia/politicas-publicas/reingreso-a-la-can--es-el-mejor-negocio--para-vene.aspx)

Local stock market up 53.75% YTD

Caracas stocks rose 0.7% last week on continued low volume with the Caracas Stock Index closing at 100,450 for the week. Banco Provincial rose 2.78% to Bs. 37, with Envases Venezolanos dropping 13% at Bs. 20.88, CANTV losing 3.7% to Bs. 6.5, Mercantil Servicios Financieros A down 0.7% at Bs. 35 and Sivensa lost 0.27% to Bs. 7.3. All other stocks in the Caracas Stock Index did not change in price. The Venezuela Stock Market Index is now up 53.75% for the year to date. (Latin American Herald Tribune, 09-19-2011; http://www.laht.com/article.asp?ArticleId=426138&CategoryId=10717)

Commodities

Oil Minister says PDVSA will import 138 Chinese rigs

Venezuelan Energy and Petroleum Minister Rafael Ramírez says PDVSA will import 138 rigs from China, and that another 20 rigs are being built in Venezuela. The Minister also said the state owned oil holding will continue to use its agreements with the People's Republic of China. (El Universal, 09-19-2011; http://www.eluniversal.com/2011/09/19/oil-minister-pdvsa-is-to-import-138-chinese-rigs.shtml)

Chavez orders new state gold grab

A new law regulating gold mining in Venezuela took effect Monday and will require mining companies to sell all the gold they extract to the government. The decree, which was signed by President Hugo Chavez is aimed at boosting government control of gold mining operations. Private companies will still be allowed to participate in mining, but as minority partners in joint ventures with the government. There was no immediate reaction from Rusoro Mining Ltd., the one company with significant mining operations under way in Venezuela. Chavez said last month that officials had contacted the company, based in Vancouver, British Columbia, to continue mining as a joint venture. (Washington Post, 09-19-2011; http://www.washingtonpost.com/business/industries/mining-companies-will-have-to-sell-all-gold-extracted-to-venezuelan-government-under-new-law/2011/09/19/gIQAFEMTgK_story.html)

Gold prices picked up Monday after European officials failed to calm fears over a Greek default and a spread to other countries in the Euro Zone. Gold in cash was trading at U$D 1,817.99 the troy ounce at 10:33 GMT. It posted a record at U$D 1,920.30 on September 6. (Veneconomy, 09-19-2011; http://www.veneconomy.com/site/index.asp?ids=44&idt=27653&idc=2)

Venezuela oil basket rises to U$D104.47

Venezuela’s oil export basket gained U$D 1.19 to U$D 104.47 a barrel for the week of September 12-16, edging the annual average closer to U$D 100 a barrel, the Energy and Oil Ministry said. According to the Ministry, the average price so far in 2011 for Venezuela's mix of heavy and medium crude is now U$D 99.54 -- higher than 2010's U$D 72.43, and much higher than 2009’s average price of U$D 57.01, and above the previous high set by 2008's U$D 86.49 average. (Latin American Herald Tribune, 09-17-2011; http://www.laht.com/article.asp?ArticleId=425779&CategoryId=10717)

Logistics & Transport

Venezuela’s port authority (BOLIPUERTOS) signs new contracts with China and Portugal

Elsa Graff, President of BOLIPUERTOS announced that plans are underway to strengthen port operations, including contracts signed with Chinese and Portuguese companies to purchase machinery that will streamline operations at both Puerto Cabello and La Guaira. More in Spanish at: (Notitarde, 09-19-2011; http://www.notitarde.com/notitarde/plantillas/nota.aspx?idart=1432205&idcat=9849&tipo=2)

Politics

Chavez heads to Cuba for 4th round of chemotherapy

Venezuela's cancer-stricken leader Hugo Chavez returned to Cuba on Saturday for a fourth and probably last round of chemotherapy, vowing to be recovered and fit for a tough re-election campaign next year. The charismatic leftist has led Latin America's top oil exporting country since 1999 and wants to stay in office until at least 2025 to consolidate his self-styled "revolution." But his hopes for a lengthy rule were put in doubt by a cancer diagnosis this year. (Reuters, 09-17-2011; http://www.reuters.com/article/2011/09/17/venezuela-chavez-idUSS1E78G05720110917)

Chavez calls IACHR Court worthless after it ruled to reinstate Leopoldo López’ political rights

In less than five minutes, Venezuela's President Hugo Chavez went from saying that it was not up to him to comment on the ruling of the Inter-American Court of Human Rights (IACHR Court) in the case of former Chacao municipality mayor Leopoldo López to state that the hemispheric court has no value for his government and is “worthless”. At the same time, Venezuelan Solicitor General Carlos Escarrá said that the ruling – which orders the Venezuelan government to reinstate the political rights of López, and enable him to run for elected office, violates all universal legal principles. (El Universal, 09-19-2011; http://www.eluniversal.com/2011/09/19/chavez-the-iachr-court-has-no-value-it-is-worthless.shtml and http://www.eluniversal.com/2011/09/19/solicitor-general-iachr-court-ruling-disregards-the-constitution.shtml)

Electoral Council says it will wait for a Supreme Court decision on the López case

Socorro Hernández, a director of the National Electoral Council (CNE) has said that the CNE will wait for a decision by the Supreme Court in the case of ex mayor and political leader Leopoldo López before it takes a formal stance on the issue. "The CNE cannot make a decision on its own on the situation of Leopoldo (López). The CNE will take steps as soon as it receives an official decision from the TSJ or the Comptroller General Office. We have to wait for the decision of the TSJ. When it decides, the CNE will do what it has to do in such cases," said Hernández. (El Universal, 09-19-2011; http://www.eluniversal.com/2011/09/19/electoral-body-waits-for-top-court-decision-on-leopoldo-lopezs-case.shtml)

The following brief is a synthesis of the news as reported by a variety of media sources. As such, the views and opinions expressed do not necessarily reflect those of Duarte Vivas & Asociados and The Selinger Group.