Mexico’s Electricity Reform Advances; Another Change of CEO at Petroperú

Bloomberg Línea — The Environment and Natural Resources Commission of Mexico’s Chamber of Deputies has approved the electricity reform initiative of President Andrés Manuel López Obrador, which aims to hand over 54% of the electricity market to state-owned utility Comisión Federal de Electricidad, up from the current 32%, a controversial move that is seen by investors as sidelining the private sector.

This weekend saw more changes at Petroperú, the Peruvian state-owned oil company that is under pressure after two downgrades by Fitch Ratings and S&P Ratings. As of this Monday, Beatriz Cristina Fung takes over as CEO of the flagship company, and who had held the role in 2020, replacing Fernando de la Torre, who held the position for just two weeks.

On the region’s stock markets, Argentina’s Merval (MERVAL) had the best performance during the day, closing with an increase of 0.90%, its fourth consecutive positive session.

Shares of YPF (YPFD), Cablevision Holding (CCVH) and Telecom Argentina (TTECO2) were among the best performers on the Argentine exchange.

Following is a roundup of Monday’s news from Bloomberg Línea and Bloomberg reporters across Latin America.

Argentina:

• Concern in the industrial sector regarding the possibility of gas shortages in the southern hemisphere winter is growing and representatives of the sector are seeking measures from the government, which insists that there will be no difficulties in the supply during the coming months.
• Chilean President Gabriel Boric paid an official visit to the country and met with his Argentine counterpart Alberto Fernández and sent a message to Argentine entrepreneurs that the doors to invest in Chile are open.

Brazil:

• The sharp rise in interest rates in Brazil is making life difficult for fintech companies, including StoneCo (STNE) and PagSeguro Digital (PAGS), which offer cheaper loans and services than the big banks and are growing at breakneck pace.
• Difficulties continue at state-owned oil company Petrobras (PETR3) as President Jair Bolsonaro’s pick for the top job has refused the appointment.

Chile:

• After weeks of bitter debate, Chile’s left-leaning Constituent Convention seems to be heading toward proposing a new political structure for the country, allowing a second consecutive term for the president, reducing the influence of the Upper House and increasing the power of the Lower House.

Colombia:

• Inflation in Colombia has been rising month on month and the board of the Bank of the Republic has raised its interest rates by 100 basis points to bring the CPI to the level the Issuer wants and, according to José Manuel Restrepo, Colombia’s Finance Minister, from May onwards, annual inflation should start to fall.
• While inflation fails to abate, the country continues to wait for the first presidential round between Gustavo Petro and Federico Gutiérrez. According to an analysis by Barclays, the balance of risks before the May 29 presidential elections is “asymmetrically positive”.

Dominican Republic:

• Despite the drop in tourist arrivals from Russia and Ukraine, in March 2022 Dominican Republic tourism arrivals grew by 9.09% over the previous month, a total of 617,756 non-residents. According to Central Bank data, in January and February 113,806 visitors came from Russia and Ukraine to the Caribbean country.

Ecuador:

• Ecuador’s government approved 17 investment contracts for $401 million, which will generate close to 2,000 jobs linked to the metal mechanics, agribusiness, agriculture, and renewable energy production sectors.

Guatemala:

• The government has published the regulations for the subsidy for gasoline and diesel in the country. The regulation details the procedure for the application and delivery of the social support, but does not make clear which prices should be taken as a reference.

Mexico:

• The Environment and Natural Resources Commission of the Chamber of Deputies has approved the electricity reform initiative of President Andrés Manuel López Obrador, which aims to hand over 54% of the electricity market to state-owned utility Comisión Federal de Electricidad, up from the current 32%, a controversial move that is seen by investors as sidelining the private sector.
• Mexico will continue to export oil during 2023. Crude oil export volumes will total 879,000 barrels per day in 2022, and 764,000 barrels per day next year.

Panama:

• Panamanian industry projects investments of $700 million, with industrialists are confident that the government will catch up with the sector’s investment capacity and become a facilitator of its development.
• Workers and businesses reached an agreement to avoid a strike in the Panamanian construction industry with a deal struck for salary increases.

Peru:

• This weekend saw more changes at Petroperú, the Peruvian state-owned oil company that is under pressure after two downgrades by Fitch Ratings and S&P Ratings. As of this Monday, Beatriz Cristina Fung takes over as CEO of the flagship company, and who had held the role in 2020, replacing Fernando de la Torre who held the position for just two weeks.

Venezuela:

• The Venezuelan Observatory of Finance (OVF), an institution created by the opposition-led National Assembly elected in 2015, said that inflation in Venezuela stood at 10.5% during March, which translates into a significant increase compared to the previous month’s figure.