Brazil Bull Market Luring Bears as Short-Sale Gauge Doubles ’08 Peak Level

Stock investors are showing little faith in Brazil’s bull market.

Global economic difficulties could ripple to Latin America

Speakers at Friday’s Latin Trade Symposium were optimistic about the region’s prospects but said the difficult global economy could cloud the outlook

Steak Price Jump Sparking Demand for Inflation Protection: Mexico Credit

Rising beef prices and a slumping peso are prompting bond investors to boost their inflation forecasts for Mexico by the most in four months.

Bovespa Index Approaches Bull Market as Valuations, Rates Spur Rebound

Brazilian stocks approached a bull market as the cheapest valuations in more than two years and declining interest rates helped spark a rebound from the worst equity slump since the 2008-2009 financial crisis.

Brazil's sports minister leaving

 Brazilian media reported Wednesday that the nation's sports minister will be replaced soon because of corruption allegations.

Tough term ahead for Argentina's Cristina Fernandez

Argentina does not often experience such a one-sided election.

Under pressure, Bolivian president scraps highway plan

(CNN) -- Bowing to months of pressure and demonstrations from indigenous communities, Bolivian President Evo Morales has scrapped a plan for the construction of an international highway through a national park that is their ancestral homeland.

Bolivia's Evo Morales scraps Amazon road project

Bolivia's President Evo Morales has scrapped plans for a road project in the Amazon that had triggered protests by indigenous people.

Mr Morales said the road would no longer go through a rainforest reserve. 


He made the announcement two days after protesters arrived in La Paz following a two-month march from the Amazon lowlands to voice their opposition.
It is not yet clear what the demonstrators' response will be.

The president said he would send a measure to Congress that would accommodate the protesters' demands.
"The matter is resolved," Mr Morales said.

An indigenous leader, Rafael Quispe, said the president's proposal was a "good sign" but said they had 15 other demands that needed to be discussed, the Spanish news agency Efe reported.

President Morales had been under fire ever since he announced his government's plan to build the road, no matter what, says the BBC's Mattia Cabitza in La Paz.

This is the second time in less than a year that Mr Morales has backtracked under popular pressure, our correspondent adds.

The last time, just after Christmas, was dubbed the "Gasolinazo", when he tried to almost double petrol prices but was forced to drop the plan. Then, like today, he said he was "governing by obeying the people".
Development - or disaster?
 
Thousands of residents were on the streets of La Paz this week as some 1,000 protesters arrived to call for the project to be stopped.

The government had argued that the road would boost economic development and regional integration.
The protesters said the project - funded by Brazil and built by a Brazilian company - would encourage illegal settlement and deforestation in their rainforest homeland.

The plans were for a highway through the Isiboro Secure Indigenous Territory and National Park - known by its Spanish acronym Tipnis.

President Morales, Bolivia's first indigenous president, had already suspended the project and offered talks with the protesters.

However, there were also demonstrations in support of the road project from indigenous groups that are loyal to the president.

Source: www.bbc.co.uk

Fla businesses see bright future with free trade

Florida businesses are celebrating the approval of the free-trade agreements with Colombia, Panama and South Korea, hoping they boost both the state's exports and its image as the gateway to Latin American business opportunities.

The agreements approved last week will eliminate tariffs on U.S. products, help protect intellectual property and improve access for American investors in those countries. Experts say they could boost the nation's exports by $13 billion and the Obama administration says it will add at least 70,000 new jobs for Americans. Working out the final details with the other countries could still take several months.

US says strong economic relationship with region a 'strategic necessity'

WASHINGTON, USA  — A top United States official says that strong economic relationships with the Caribbean and Latin America are "a strategic necessity".

Deputy Secretary for Management and Resources at the State Department Thomas Nides told the Chamber of Commerce that "sustainable, inclusive economic growth in Latin America and the Caribbean will benefit all of us".

Brazil Retreat From Inflation-Taming Plan Makes Investors Hedge

Oct. 19 (Bloomberg) -- Brazilian officials are turning away from a 15-year old formula for success as worldwide financial storms erode faith in three core policies that ended decades of economic crisis, according to former policy makers and analysts who lived through the turmoil.

The so-called tripod of inflation targeting, low budget deficits and a floating exchange rate has supported the longest period of growth in Latin America’s biggest economy since the 1970s, helping to lift millions out of poverty and winning Brazil its first-ever investment grade rating.

Global Insider: China-Mexico Trade Relations

Mexico's economy minister sent China a formal letter last month expressing concern over unfair trade practices used by certain Chinese firms to avoid customs duties. In an email interview, Rhys Jenkins, a specialist in China's trade relations with Latin America at the University of East Anglia, discussed the trade relationship between China and Mexico.


WPR: What is the history of China-Mexico trade ties?

Rhys Jenkins: Trade between Mexico and China has grown spectacularly over the past decade from a little more than $3 billion in 2000 to almost $50 billion in 2010. The trade balance, however, has been massively in favor of China, with the value of Mexican imports running at 10 times that of exports to China, according to Mexican figures. China reports a much smaller trade surplus with Mexico, and the picture is confused by "triangulation," where goods pass through third countries, particularly the U.S. There is no doubt, though, that Mexico does register a large trade deficit with China since it has not developed significant exports to China, unlike some of the major South American countries.

WPR: What is the source of the current trade dispute between Mexico and China?

Jenkins: Trade conflicts between Mexico and China go back at least a decade. When China applied to join the World Trade Organization (WTO), Mexico was the last country to give its approval, in 2001. Mexican concerns were twofold: first, that the guaranteed access to the U.S. market that the WTO would give China would have a negative effect on Mexican exports to the north and, second, that Chinese imports would flood the Mexican domestic market. There was little that the Mexican government could do to prevent China's access to the U.S. market, and in 2003 Chinese exports to the U.S. exceeded those of Mexico for the first time. In order to reduce the impact of Chinese competition on the domestic market, Mexico insisted on arrangements that enabled it to maintain tariffs of between 100 percent and 1,100 percent on a range of Chinese imports for seven years as a condition for agreeing to China's WTO accession. When these arrangements were due to expire in 2008, the two countries agreed on a transition period that gave Mexican producers a further three years to adjust before restrictions are finally removed. These are due to end in December of this year.

The Mexican government has serious concerns over the large and growing bilateral trade deficit with China. Mexican manufacturers in a range of industries have long complained of unfair competition from Chinese imports. They claim that Chinese goods enter the market as contraband and that they avoid paying the appropriate import duties by underinvoicing or misclassifying goods, or by shipping them through third countries. China has been the main target for anti-dumping actions taken by Mexico at the WTO, accounting for 29 out of a total of 99 cases initiated since 1995.

WPR: What are the regional implications of Mexico's tough trade stance toward China?

Jenkins: Although other large Latin American countries such as Brazil and Argentina do not have such acute economic tensions with China, since their booming commodity exports have meant that they have not experienced large trade deficits, increased penetration of Chinese goods have nonetheless led to similar calls for protection from industrialists. China has been a principal target for anti-dumping actions in these countries too.

Source: www.worldpoliticsreview.com

Geo Plunge Leads Worst Corporate Slump Since ‘06: Mexico Credit

Oct. 18 (Bloomberg) -- Mexican corporate bonds are posting their longest losing streak in five years as the slowdown in the U.S., the Latin American country’s biggest trade partner, erodes demand for debt sold by companies from Corp. Geo SAB to Financiera Independencia SAB.

The 2.1 percent loss in Mexican corporate dollar debt over the past 30 days is the third straight month of declines, the most since the period ended June 17, 2006, according to JPMorgan Chase & Co. Brazilian companies’ bonds slumped 1.3 percent in the past month, the second consecutive month of losses. Emerging-market corporate debt also fell for a second month, losing 1.9 percent over the past 30 days.

Move Over, China: Why India May Be the Better Partner for Latin America

Bolivia this month is accusing India's Jindal Steel & Power Ltd. of failing to honor its $2.1 billion investment commitment to develop the Mutún iron ore mine and smelting works. Jindal in turn claims Bolivia isn't providing it sufficient gas and electrical power to get the job done. Such disputes between Latin American governments and foreign multinationals, especially in the mining sector, are hardly new. But what's different today is that the tussles as well as the triumphs increasingly involve India – the emerging Asian power whose economic clout in Latin America could soon rival China's.

Industry group lowers Brazil's 2011 growth forecast to 3.4%

BRASILIA, Oct. 11 (Xinhua) -- The Brazilian National Industry Confederation (CNI) on Tuesday revised down its forecast for Brazil's economic growth this year to 3.4 percent from 3.8 percent due to the effects of the world economic crisis.

According to the CNI, Brazil's industry sector will also suffer from the ongoing debt crisis in the United States and Europe.

Brazil inflation hits 6-yr high but rate cut seen

Inflation in Brazil climbed further out of the central bank's comfort zone in September but higher prices are not likely to prevent mor rate cuts for Latin America's biggest economy or the rest of the region.

Brazilian inflation hit an annual rate of 7.31 percent in September, more than double the rates recorded in Mexico and Chile and the highest since May 2005, data showed on Friday.

US Tells Latin America to Help Poor Get Richer Too

Poised to expand its free-trade network in Latin America, the United States on Wednesday pressed governments of the region to ensure that all of their citizens benefit from the increased prosperity that expanded commerce offers. The Obama administration offered $17.5 million in American assistance toward that goal.

Speaking at a regional economic conference in the Dominican Republic, Secretary of State Hillary Rodham Clinton said she expected Congress to approve a set of new trade pacts with South Korea, Colombia and Panama quickly, alongside a program that would help American workers and businesses adjust to the stresses that globalization create.

Brazilian economy set for a slowdown

Brazil’s economy is set for a slowdown, with industrial production contracting in August as domestic manufacturers struggle with rising interest rates, a strong currency and a weakening global economy.
Goldman Sachs said it has revised its forecast for Brazil gross domestic product growth to 3.5 per cent this year from 3.7 per cent, which would be less than half that of 2010, when Latin America’s largest economy expanded at an Asia-like rate of 7.5 per cent.

Default Concern Drives Maxcom Yields to Record: Mexico Credit

Oct. 3 (Bloomberg) -- Maxcom Telecomunicaciones SAB’s borrowing costs are rising at twice the pace of similarly rated global peers on speculation the Mexican phone company may default as slowing economic growth deepens losses.

Yields on Maxcom’s dollar bonds due in 2014 soared 1,004 basis points in the past two months to a record 28.26 percent, while the price of the securities sank to 65.09 cents on the dollar, according to data compiled by Bloomberg. The average yield on debt sold by companies globally that share Maxcom’s CCC rating climbed 446 basis points, or 4.46 percentage points, during the same period to 15.42 percent, Bank of America Corp. data show.