Economics &
Finance
Minister says FOREX allocations delays down 70-75%, business says only
12% of pending requests served
Finance Minister Nelson Merentes says information is
being shared by the Foreign Exchange Board (CADIVI) and the nation's tax
authority (SENIAT) to avoid foreign exchange going to "fake
companies". He says delays in FOREX allocations have been reduced by
70-75%, and deliveries will be speeded up to areas such as food, health, the
automotive industry and airlines. In turn, FEDECÁMARAS President Jorge Botti,
speaking for the business community says there is a backlog of around U$D 8
billion and some 10-12% has been served. He added that "it will take
90-120 days to restore supplies". More in Spanish: (El Mundo, 05-31-2013; http://www.elmundo.com.ve/noticias/economia/politicas-publicas/entre-70--y-75---ha-disminuido-el-retraso-en-la-en.aspx#ixzz2Urphg0dB; El Universal, http://www.eluniversal.com/economia/130531/senalan-que-cadivi-ha-liquidado-12-de-las-divisas-pendientes)
"We do have
sufficient reserves" says Central Bank President
Edmée Betancourt, President of the Central Bank says the
nation has sufficient international reserves to meet economic needs. "We
do have foreign exchange. We must rationalize our foreign exchange; we will not
allow them to continue to be wasted". More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/si-tenemos-divisas-asegura-presidenta-del-bcv.aspx)
Merentes to meet investment bankers
Finance Minister Nelson
Merentes will travel in June to Europe and the United States for a round of
meetings with investment centers and international organizations, in order to
"explain first hand and clarify
investor doubts" on Venezuela's economy and its potential. He says:
"we have made changes here and some
people do not understand, the best way is to tell it in person. We have no
problem going to these centers, we will go where we must, we will take part in
international organizations no matter what their position. We have a model
which is being developed and in any case we will go to the markets."
More in Spanish: (El Universal,
05-31-2013; http://www.eluniversal.com/economia/130531/merentes-viajara-a-reunirse-con-bancas-de-inversion)
Local industry running at half
capacity
The Venezuelan Confederation of Industries (CONINDUSTRIA)
reports that the nation's domestic industries are working at 52.82% of their installed
capacity, according to a poll conducted by the institution. This is down from
59.5% in the last quarter of 2012 and the lowest first quarter since 2010. Data
from the Central Bank (BCV) indicates the slowdown is due to cuts in the sale
of foreign currency to the private sector, lack of raw material,
customs-related bottlenecks, and delays in the granting of permits. Official
statistics indicate food production rose by 2.62% in January. Similar rises in
production in January were reported in paper (13%), tires (38%), and common
metals (5.7%). (El Universal, 05-30-2013; http://www.eluniversal.com/economia/130530/venezuelan-industries-running-at-half-capacity and http://www.eluniversal.com/economia/130530/official-data-shows-setback-in-venezuelan-manufacturing-sector)
Venezuelans blame Government for
widespread shortages
The Government is accountable for shortage in the
country, said 93.52% of respondents in a poll conducted by the daily newspaper
El Universal. Based on the results of the poll conducted among 2,270 people,
some 4.1% blamed shortage on industries, and 2.11% blamed it on shopkeepers. Another
0.26% of respondents attributed shortage to transport companies. According to
the latest data disclosed by the Central Bank shortage hit 21.3% in April, the
highest level in recent months. In other words, two out of 10 products were not
in stock in grocery stores and supermarkets. (El Universal, 05-30-2013; http://www.eluniversal.com/economia/130529/venezuelans-blame-government-for-widespread-shortage)
Stock market up 71%
The local stock market continued its torrid pace as it increased by 5.6%
during the week ending May 24, closing at 806,050. Banco Provincial continued
rising, up 8.3% this week to close at Bs. 260. At this level, its dividend has
dropped to nearly 8%, down from near 30% two years ago. But somehow investors
with Bolivars trapped by currency controls continue chasing dividends in all
stocks. The biggest gainer for the week was container-maker Envases
Venezolanos, up 14.2% at Bs. 120, followed by Mercantil Servicios Financieros,
up 2% at Bs. 230 and nationalized telephone company CANTV, up 2% at Bs. 23.
Steelmaker SIVENSA lost 33.3% at Bs. 10.02, while paper and property company
MANPA dropped 8.7% at Bs. 6.3. (Latin American Herald Tribune, 05-30-2013; http://www.laht.com/article.asp?ArticleId=791039&CategoryId=10717)
Commodities
RPT-Fitch: ROSNEFT'S Venezuela deal
important for long-term outlook
ROSNEFT's new joint venture in Venezuela is a
step towards strengthening its international upstream operations, which could
help improve the company's operating profile in the long-term, Fitch Ratings
says. International growth will be important if the group is to offset falling
production at its principal brownfield sites in Western Siberia and Central Russia.
Joint ventures abroad could also provide Rosneft with valuable technical
expertise. ROSNEFT reported a 1.6% quarter-on-quarter fall in oil production in
Q113 to 2.35m barrels per day (bpd), excluding equity affiliates and TNK-BP.
Virtually all of this production came from Russia, with 56% from one
subsidiary in Western Siberia, where output dropped 1.7% on the previous
quarter. We therefore consider ROSNEFT's involvement in the oil-rich Orinoco
Belt projects, with 195bn tons of estimated oil resources, as an important
long-term driver for its upstream operations and expansion abroad. (Reuters,
05-29-2013; http://www.reuters.com/article/2013/05/29/fitch-rosnefts-venezuela-deal-important-idUSFit65963420130529)
Venezuela to sign loan agreement
with China's oil company CNPC
Rafael Ramírez, president of state-owned oil company
PDVSA, is to travel to Beijing next week to initial a loan agreement amounting
to U$D 4,000 with China National Petroleum Corporation (CNPC), a source from
the company said on Wednesday, following talks held in mid-May during a visit
to Venezuela by Chinese Vice-President Li Yuanchao. PDVSA said the credit will help
boost production of heavy and extra-heavy crude oil from 130,000 barrels per
day (bpd) to 330,000 bpd at China-Venezuela joint venture Petrolera SINOVENSA,
operating in the Carabobo 2 block at the Orinoco Oil Belt. (El Universal, 05-30-2013; http://www.eluniversal.com/economia/130529/venezuela-to-sign-loan-agreement-with-china-oil-company-cnpc)
Bolivian oil company weights
proposal to explore in Venezuela
Bolivian state-owned oil company YPFB reported that it is
pondering the proposal made by Argentina and Venezuela to effect its first
international projects of prospection and production of hydrocarbons. Thus far,
YPFB has operated only in Bolivian territory. Now, however, it could start
operations in foreign countries thanks to the political agreements reached by
President Evo Morales and his counterparts Cristina Kirchner, of Argentina and
Nicolás Maduro, of Venezuela. In this way, Argentinean YPF and Venezuelan PDVSA
will return the access given by YPFB to the Bolivian market, where they run oil
and gas exploration and production projects. (El Universal, 05-29-2013; http://www.eluniversal.com/economia/130529/bolivian-oil-company-weights-proposal-to-explore-in-venezuela)
ICSID ruled in favor of PDVSA in lawsuit by OPIC oil
company
The International Center for Settlement of Investment
Disputes, or ICSID, ruled in favor of state oil company PDVSA in a case brought
by the OPIC KARIMUN Corporation, after the company failed to reach an agreement
with the Venezuelan government regarding the request for compensation for the
involvement of the conventions to which they had been working. "The plaintiffs are stuck with Article 22 of
the Law on the Promotion and Protection of Investments, of October 3, 1999,
which provides that disputes arising between an international investor whose
home country holds a Bilateral Investment Treaty with the Venezuelan state, may
be subjected to international arbitration. In this case there was none that
protected them, which is why the judges gave the decision in favor of Venezuela,"
PDVSA said in a press release. (AVN, 05-29-2013; http://www.avn.info.ve/contenido/icsid-ruled-favor-pdvsa-oil-lawsuit-opic;
Latin American Herald Tribune, 05-28-2013; http://www.laht.com/article.asp?ArticleId=789651&CategoryId=10717;
Reuters; http://www.reuters.com/article/2013/05/29/venezuela-arbitration-idUSL2N0EA0I420130529)
Venezuela says U.S. shale won’t hurt OPEC’s heavy oil
The rising supply of U.S. shale oil doesn’t affect
exporters of medium and heavy crudes such as Venezuela, Oil Minister told
reporters before an OPEC meeting tomorrow. “Shale
is a production of light crude and that doesn’t affect us as being big
producers of medium and heavy crudes,” Rafael Ramirez said in
Vienna, where ministers from the Organization of Petroleum Exporting Countries
are gathering. “We have a big capacity to
place our crudes, including the U.S. market.” (Bloomberg, 05-30-2013; http://www.bloomberg.com/news/2013-05-30/venezuela-says-u-s-shale-won-t-hurt-opec-s-heavy-oil.html)
International Trade
Food imports in Colombia could be
suspended
Nutrition Minister Felix Osorio says the government is considering
suspending food imports from Colombia after that nation's President Juan Manuel
Santos met with Venezuelan opposition leader Henrique Capriles. He said
negotiations had begun to bring in certain staples, but added "after
yesterday's situation we can hardly establish any commercial relationship with
Colombia beyond what already exists." More in Spanish: (Notitarde, http://www.notitarde.com/La-Costa/Importacion-de-productos-alimenticios-desde-Colombia-podria-suspenderse/2013/05/30/194555)
Logistics
& Transport
Talks held on speeding up port processing
Major General Herbert García Plaza, President
of the Port Authority and head of aquatic and air transport has met with
representatives of the various government institutions to speed up dispatching
cargo that arrives in Puerto Cabello. More in Spanish: (Bolipuertos,
05-31-2013; http://www.bolipuertos.gob.ve/noticia.aspx?id=7249)
Politics
Venezuela furious at Colombia's
meeting with opposition leader
Venezuela reacted with fury to Wednesday's talks between
Colombian President Juan Manuel Santos and Venezuelan opposition leader
Henrique Capriles. President Nicolás Maduro said Santos had "stabbed
Venezuela", and pointed out that the late President Hugo Chavez had
unconditionally supported the peace process in Colombia. He added that "as
we work toward peace in Venezuela, we cannot accept a conspiracy from
Bogota", and doubted the sincerity of President Santos "as he stabs
Venezuela in the back and contributes to wash the face of the conspiracy
against Venezuela. I say so with pain". Capriles met Santos in Bogota at
the start of a tour around Latin America to press his case that last month's
presidential poll in Venezuela was fraudulent and President Nicolas Maduro's
government is therefore illegitimate. (Reuters, 05-29-2013; http://www.reuters.com/article/2013/05/29/us-venezuela-colombia-idUSBRE94S1GH20130529;
The Washington Post, http://www.washingtonpost.com/world/the_americas/venezuela-angrily-scolds-colombia-for-having-president-meet-with-opposition-leader-capriles/2013/05/29/965a349e-c8d5-11e2-9cd9-3b9a22a4000a_story.html;
Fox News, http://www.foxnews.com/world/2013/05/29/venezuela-angrily-scolds-colombia-for-having-president-meet-with-opposition/;
Bloomberg, http://www.foxnews.com/world/2013/05/29/venezuela-angrily-scolds-colombia-for-having-president-meet-with-opposition/
and more in Spanish: El Universal, http://www.eluniversal.com/nacional-y-politica/130531/maduro-el-presidente-santos-le-metio-una-punalada-a-venezuela)
Capriles condemns blackmailing
Colombian peace talks, calls for support of UNASUR agreement
Venezuela's opposition leader Henrique Capriles has said
the Venezuelan government's reaction on his visit to Colombia is "unacceptable". "Peace can never be subjected to blackmail.
Either you want peace and work for peace or you do not want peace. There is no
in between", he said. His statements came after Venezuelan Foreign
Minister Elías Jaua said Venezuela would "re-evaluate" Venezuela's role in Colombia's peace process
saying "it is very difficult to work
toward peace in a neighboring country, when that country's highest authorities
support and feed destabilization in Venezuela." Jaua spoke after
Colombian President Juan Manuel Santos met with Capriles in Bogotá. Capriles
says ti is "unacceptable to try to
condition Colombia and tell them who to meet with and who it cannot meet with".
Capriles also met with the heads of Colombia's Senate and House of
Representatives. At a subsequent press conference he said he had asked Santos
to help make Venezuela comply with the UNASUR resolution calling for a full
audit of the April 14th Presidential election. More in Spanish: (Infolatam)
Colombian Vice President says Colombia recognizes
Venezuela's elected government
Colombian Vice President Angelino Garzón says his nation
wants to strengthen bilateral relations with Venezuela and stressed that "we recognize Venezuela's legitimate elected
government headed by President Nicolás Maduro, and the proof is that President
Juan Manuel Santos and Foreign Minister María Ángela Holguín attended his
swearing in ceremony in Caracas."
Garzón also said Santos "is
free to meet with whomever he considers", and said the Colombian
government would reject any plot or conspiracy against a democratically elected
government in Latin America or the Caribbean". More in Spanish: (AVN; http://www.avn.info.ve/contenido/vicepresidente-colombiano-nosotros-reconocemos-al-gobierno-leg%C3%ADtimamente-elegido-venezuela)
Elections Council calls municipal elections for December
8th
The Elections Council has announced that municipal elections will be
held on December 8th, so that voters can elect mayors and other municipal
authorities. Voter registration will be held up to 21 June, and nominations
should take place between August 5-9. 40,000 people are expected to run for
2791 offices, including 335 mayors. More in Spanish: (AVN; http://www.avn.info.ve/contenido/cne-convoca-para-pr%C3%B3ximo-8-diciembre-elecciones-municipales; El Universal, http://www.eluniversal.com/nacional-y-politica/130531/cne-aprobo-realizar-las-municipales-el-8-de-diciembre)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.