yellow
Forumer attivo
L'ultima view dello strategist di Morgan Stanley sulla Turchia :
http://www.morganstanley.com/views/gef/index.html#anchor7367
http://www.morganstanley.com/views/gef/index.html#anchor7367
Titoli di Stato paesi-emergenti STATI SOVRANI High Yeld in €uro
- Creatore Discussione Giontra
- Data di Inizio
Imark
Forumer storico
Una mosca bianca: un upgrade... 
E' quello di Moody's riguardante l'Uruguay e consegue alla riduzione del debito posta in essere dallo stato latino americano.
Le scadenze sul debito da rifinanziare nel 2009-2010 sono contenute e non tali - secondo Moody's - da esporre il paese alle difficoltà derivanti dal credit crunch,
Ciò detto, il rating resta HY e l'economia nazionale uruguaiana esposta ai rovesci della congiuntura internazionale. La sua dollarizzazione (che vale in particolare per il sistema bancario, con il 70% dei prestiti erogati ancora denominato in USD) costituisce anch'essa una fonte di rischi, specie in caso il USD dovesse conoscere robusti apprezzamenti.
A voi...
[FONT=verdana,arial,helvetica]Moody's upgrades Uruguay's bond ratings[/FONT]
[FONT=verdana,arial,helvetica]New York, January 12, 2009 -- Moody's Investors Service has upgraded the foreign- and local-currency bond ratings of the government of Uruguay to Ba3 from B1 to reflect a steady improvement in the government's overall debt profile. [/FONT]
[FONT=verdana,arial,helvetica]"This improvement has contributed to reduced credit risks stemming from declining debt ratios" said Moody's Vice President-Senior Credit Officer Mauro Leos. "The upgrade reflects reduced vulnerabilities associated with a somewhat lower degree of dollarization in government debt obligations and, at the margin, Uruguay's banking system." [/FONT]
[FONT=verdana,arial,helvetica]Uruguay's foreign-currency country ceiling for bonds and notes was also upgraded to Ba1 from Ba2, and the country's ceiling for foreign-currency bank deposits were upgraded to B1 from B2. Uruguay's local-currency country ceilings for bonds and notes and deposits are unaffected by this rating action. [/FONT]
[FONT=verdana,arial,helvetica]Leos noted that notwithstanding the uncertainties of the current global economic and financial environment, improvements in Uruguay's creditworthiness position Uruguay closer to countries in the low end of the Ba rating category than those in the B range. [/FONT]
[FONT=verdana,arial,helvetica]To date, a conservative fiscal stance complemented by proactive debt management has helped increase government debt affordability as evidenced by lower ratios of debt-to-revenues and interest payment-to-revenues," noted Leos. "Though still somewhat high, government debt ratios have been trending downwards in a very significant way." [/FONT]
[FONT=verdana,arial,helvetica]He said liability management operations have been effective in extending average debt maturities, reducing near-term refinancing needs, and increasing the share of local-currency-denominated debt. "Given an improved maturity profile," said Leos, "Uruguay faces moderate rollover risks during 2009-2010, which should mitigate potential credit risks derived from a global financial environment in which liquidity is expected to remain tight." [/FONT]
[FONT=verdana,arial,helvetica]He also said the ratings continue to incorporate structural constraints owing to the small size of the economy, a condition that limits the country's ability to confront external shocks. Even though Uruguay has been able to diversify its export markets, thereby reducing its economic and financial exposure to Argentina, the country remains exposed to regional shocks. [/FONT]
[FONT=verdana,arial,helvetica]The ratings are supported by a strong institutional framework that incorporates a solid track record of economic policy continuity and Moody's favorable assessment of Uruguay's willingness-to-pay its debt. [/FONT]
[FONT=verdana,arial,helvetica]In this respect, "Moody's views are influenced by the outcome of the 2003 debt restructuring process in which Uruguay's positive attitude towards creditors led to a debt exchange that involved minimal loss severity for bondholders," said Leos. "As high willingness to pay is considered to be an integral part of the country's credit profile, this factor is implicitly incorporated into the current ratings partly compensating for somewhat weak quantitative factors relative to credit standing." [/FONT]
[FONT=verdana,arial,helvetica]As a more resilient banking system has emerged, potential credit risks derived from contingent liabilities appear to have declined, said Leos, who explained that the financial fundamentals of the banking system have improved on the back of enhanced asset quality and provisioning regulations, lower non-resident deposits, high liquidity ratios, and strengthened capital ratios. [/FONT]
[FONT=verdana,arial,helvetica]"However, Uruguayan banks continue to confront risks derived from potential balance sheet mismatches given the prevailing degree of financial dollarization which, while lower than in previous years, remains high in absolute and relative terms," said Leos -- dollar-denominated loans and deposits account for more than 70% of the total. Additionally, a less favorable operating environment will negatively impact asset quality while increased exchange rate volatility may place additional pressures on the bank's balance sheet. [/FONT]
[FONT=verdana,arial,helvetica]Moody's stable outlook for Uruguay's ratings already incorporates scenarios that contemplate a deceleration in economic activity after an extended period of above-trend growth. Given an international environment characterized by less-favorable economic and financial conditions, GDP and export growth are expected to decline as Uruguay faces more challenging macroeconomic conditions in the near term. [/FONT]
[FONT=verdana,arial,helvetica]"While current ratings can accommodate a transitory deterioration in Uruguay's fiscal and external indicators," said Leos, "medium-term credit prospects will ultimately depend on the effectiveness of government policies to restore favorable trends that were observed in previous years." [/FONT]
[FONT=verdana,arial,helvetica]The current stable outlook includes the presumption of economic policy continuity, a particularly timely consideration as general elections will take place in October. Leos noted that "the resolve of the authorities will be tested throughout 2009 as they confront the need to adopt economic and fiscal policies that will have to balance a trade off between financial and political considerations as the electoral period approaches." [/FONT]
[FONT=verdana,arial,helvetica]Subsequent rating upgrades will require preserving a fiscal stance that assures sustained medium-term reductions in the government debt ratios. "Equally significant in this respect will be further improvements in the currency composition of government debt that reduces the share of foreign currency-denominated debt," said Leos. "The latter is viewed by Moody's as a condition necessary to strengthen the government's balance sheet and reduce Uruguay's credit exposure to exchange rate shocks." [/FONT]
[FONT=verdana,arial,helvetica]The last rating action for Uruguay was made on August 2008, when Moody's placed the foreign and local currency government bond ratings on review for a possible upgrade[/FONT]
E' quello di Moody's riguardante l'Uruguay e consegue alla riduzione del debito posta in essere dallo stato latino americano.
Le scadenze sul debito da rifinanziare nel 2009-2010 sono contenute e non tali - secondo Moody's - da esporre il paese alle difficoltà derivanti dal credit crunch,
Ciò detto, il rating resta HY e l'economia nazionale uruguaiana esposta ai rovesci della congiuntura internazionale. La sua dollarizzazione (che vale in particolare per il sistema bancario, con il 70% dei prestiti erogati ancora denominato in USD) costituisce anch'essa una fonte di rischi, specie in caso il USD dovesse conoscere robusti apprezzamenti.
A voi...
[FONT=verdana,arial,helvetica]Moody's upgrades Uruguay's bond ratings[/FONT]
[FONT=verdana,arial,helvetica]New York, January 12, 2009 -- Moody's Investors Service has upgraded the foreign- and local-currency bond ratings of the government of Uruguay to Ba3 from B1 to reflect a steady improvement in the government's overall debt profile. [/FONT]
[FONT=verdana,arial,helvetica]"This improvement has contributed to reduced credit risks stemming from declining debt ratios" said Moody's Vice President-Senior Credit Officer Mauro Leos. "The upgrade reflects reduced vulnerabilities associated with a somewhat lower degree of dollarization in government debt obligations and, at the margin, Uruguay's banking system." [/FONT]
[FONT=verdana,arial,helvetica]Uruguay's foreign-currency country ceiling for bonds and notes was also upgraded to Ba1 from Ba2, and the country's ceiling for foreign-currency bank deposits were upgraded to B1 from B2. Uruguay's local-currency country ceilings for bonds and notes and deposits are unaffected by this rating action. [/FONT]
[FONT=verdana,arial,helvetica]Leos noted that notwithstanding the uncertainties of the current global economic and financial environment, improvements in Uruguay's creditworthiness position Uruguay closer to countries in the low end of the Ba rating category than those in the B range. [/FONT]
[FONT=verdana,arial,helvetica]To date, a conservative fiscal stance complemented by proactive debt management has helped increase government debt affordability as evidenced by lower ratios of debt-to-revenues and interest payment-to-revenues," noted Leos. "Though still somewhat high, government debt ratios have been trending downwards in a very significant way." [/FONT]
[FONT=verdana,arial,helvetica]He said liability management operations have been effective in extending average debt maturities, reducing near-term refinancing needs, and increasing the share of local-currency-denominated debt. "Given an improved maturity profile," said Leos, "Uruguay faces moderate rollover risks during 2009-2010, which should mitigate potential credit risks derived from a global financial environment in which liquidity is expected to remain tight." [/FONT]
[FONT=verdana,arial,helvetica]He also said the ratings continue to incorporate structural constraints owing to the small size of the economy, a condition that limits the country's ability to confront external shocks. Even though Uruguay has been able to diversify its export markets, thereby reducing its economic and financial exposure to Argentina, the country remains exposed to regional shocks. [/FONT]
[FONT=verdana,arial,helvetica]The ratings are supported by a strong institutional framework that incorporates a solid track record of economic policy continuity and Moody's favorable assessment of Uruguay's willingness-to-pay its debt. [/FONT]
[FONT=verdana,arial,helvetica]In this respect, "Moody's views are influenced by the outcome of the 2003 debt restructuring process in which Uruguay's positive attitude towards creditors led to a debt exchange that involved minimal loss severity for bondholders," said Leos. "As high willingness to pay is considered to be an integral part of the country's credit profile, this factor is implicitly incorporated into the current ratings partly compensating for somewhat weak quantitative factors relative to credit standing." [/FONT]
[FONT=verdana,arial,helvetica]As a more resilient banking system has emerged, potential credit risks derived from contingent liabilities appear to have declined, said Leos, who explained that the financial fundamentals of the banking system have improved on the back of enhanced asset quality and provisioning regulations, lower non-resident deposits, high liquidity ratios, and strengthened capital ratios. [/FONT]
[FONT=verdana,arial,helvetica]"However, Uruguayan banks continue to confront risks derived from potential balance sheet mismatches given the prevailing degree of financial dollarization which, while lower than in previous years, remains high in absolute and relative terms," said Leos -- dollar-denominated loans and deposits account for more than 70% of the total. Additionally, a less favorable operating environment will negatively impact asset quality while increased exchange rate volatility may place additional pressures on the bank's balance sheet. [/FONT]
[FONT=verdana,arial,helvetica]Moody's stable outlook for Uruguay's ratings already incorporates scenarios that contemplate a deceleration in economic activity after an extended period of above-trend growth. Given an international environment characterized by less-favorable economic and financial conditions, GDP and export growth are expected to decline as Uruguay faces more challenging macroeconomic conditions in the near term. [/FONT]
[FONT=verdana,arial,helvetica]"While current ratings can accommodate a transitory deterioration in Uruguay's fiscal and external indicators," said Leos, "medium-term credit prospects will ultimately depend on the effectiveness of government policies to restore favorable trends that were observed in previous years." [/FONT]
[FONT=verdana,arial,helvetica]The current stable outlook includes the presumption of economic policy continuity, a particularly timely consideration as general elections will take place in October. Leos noted that "the resolve of the authorities will be tested throughout 2009 as they confront the need to adopt economic and fiscal policies that will have to balance a trade off between financial and political considerations as the electoral period approaches." [/FONT]
[FONT=verdana,arial,helvetica]Subsequent rating upgrades will require preserving a fiscal stance that assures sustained medium-term reductions in the government debt ratios. "Equally significant in this respect will be further improvements in the currency composition of government debt that reduces the share of foreign currency-denominated debt," said Leos. "The latter is viewed by Moody's as a condition necessary to strengthen the government's balance sheet and reduce Uruguay's credit exposure to exchange rate shocks." [/FONT]
[FONT=verdana,arial,helvetica]The last rating action for Uruguay was made on August 2008, when Moody's placed the foreign and local currency government bond ratings on review for a possible upgrade[/FONT]
lupin70
Volere è potere.
Con la speranza di non essere troppo OT vorrei porre all'attenzione dei forumisti il titolone che compare sulla copertina del n.1 (Gen'09) della rivista INVESTIRE: "2009 - Obiettivo AFRICA".
In sintesi, si sostiene, a mio avvsiso correttamente, che si tratta di un continente le cui caratteristiche, dal punto di vista economico e finanziario (meterie prime, risorse naturali, cunsumi in crescita, etc.), ricordano molto quelle che l'Asia poteva avere negli anni gli '80, e con le borse africane addririttura meglio dell'indice dei mercati emegenti nel periodo 2005-2008. Oltre ai fondi azionari che investono in questo continente vi risulta l'esistenza di bond specifici ? Grazie in anticipo.
In sintesi, si sostiene, a mio avvsiso correttamente, che si tratta di un continente le cui caratteristiche, dal punto di vista economico e finanziario (meterie prime, risorse naturali, cunsumi in crescita, etc.), ricordano molto quelle che l'Asia poteva avere negli anni gli '80, e con le borse africane addririttura meglio dell'indice dei mercati emegenti nel periodo 2005-2008. Oltre ai fondi azionari che investono in questo continente vi risulta l'esistenza di bond specifici ? Grazie in anticipo.
Giontra
Forumer storico
In euro (o in U$D) a me risultano solo Sud Africa, Tunisia ed Egitto.
Stasera ci guardo meglio e posto
Però alcune considerazioni vanno fatte....
Imark
Forumer storico
Ciao Lupin, secondo me l'investimento in questi paesi va valutato con molta cautela: si tratta spesso di paesi ancora molto poveri, con economie troppo dipendenti dalle materie prime, pubbliche amministrazioni molto al di sotto degli standard occidentali, salvo alcuni casi di emancipazione sociale ed economica di successo, tipo il Botswana, che tuttavia è fra i pochi che mi viene da indicare... (e non credo sia HY, anzi...
)Fra gli emergenti, c'è la Repubblica Sudafricana, della quale non ricordo se il rating sia marginalmente IG oppure HY, che ha talune emissioni in euro ed in USD scambiate sull'euromercato... in euro queste due
5.25% 2013
http://anleihen.onvista.de/snapshot.html?ID_INSTRUMENT=8436218&SEARCH_VALUE=XS0168670478
4.5% 2016
http://anleihen.onvista.de/snapshot.html?ID_INSTRUMENT=14155957&SEARCH_VALUE=XS0250007498
Sempre in africa, ci sono i paesi del Maghreb che pure credo abbiano emissioni in euro, e anche qui va controllato quali siano IG e quali HY (la Tunisia ad es. mi pare di rammentare sia IG)
lupin70
Volere è potere.
Ciao Lupin, secondo me l'investimento in questi paesi va valutato con molta cautela: si tratta spesso di paesi ancora molto poveri, con economie troppo dipendenti dalle materie prime, pubbliche amministrazioni molto al di sotto degli standard occidentali, salvo alcuni casi di emancipazione sociale ed economica di successo, tipo il Botswana, che tuttavia è fra i pochi che mi viene da indicare... (e non credo sia HY, anzi...
Fra gli emergenti, c'è la Repubblica Sudafricana, della quale non ricordo se il rating sia marginalmente IG oppure HY, che ha talune emissioni in euro ed in USD scambiate sull'euromercato... in euro queste due
5.25% 2013
http://anleihen.onvista.de/snapshot.html?ID_INSTRUMENT=8436218&SEARCH_VALUE=XS0168670478
4.5% 2016
http://anleihen.onvista.de/snapshot.html?ID_INSTRUMENT=14155957&SEARCH_VALUE=XS0250007498
Sempre in africa, ci sono i paesi del Maghreb che pure credo abbiano emissioni in euro, e anche qui va controllato quali siano IG e quali HY (la Tunisia ad es. mi pare di rammentare sia IG)
Grazie MARK !!! Sempre estremamente rapido e preciso nella tue risposte!
Concordo pienamente sul fatto di essere etremamente cauti nella valutazione di investimenti in paesi africani... volevo solo fare delle considerazioni insiene circa taluni dati che attualmente circolano su questo continente, e.g., commodities (l'Africa ha un'offerta particolarmente redditizia di petrolio, gas naturale, oro, platio, ...), la Cina che è sempre più coinvolta nello sviluppo di infrastrutture africane, commodity warrant (a differenza di altri mercati i tassi di produzione sono positivi)... insomma un mercato emergente in forte crescita, ma con potenziali fattori di rischio assolutamente non trascurabili.
ginopelo
Moving to PeloPonneso
grazie mark per la segnalazione sull'uruguay
ho dato un breve sguardo su onvista e in EUR ho trovato questi 3 bond
2012 7% http://anleihen.onvista.de/snapshot.html?ID_INSTRUMENT=8425131
2019 7% http://anleihen.onvista.de/snapshot.html?ID_INSTRUMENT=8392638
2016 6,875 http://anleihen.onvista.de/snapshot.html?ID_INSTRUMENT=12592969
purtroppo lo spread bid/ask è veramente ampio, dai 5 (95-100) del 2012 ai 10 degli altri 2 e dover comprare al meglio rende la cosa poco appetibile.
ho dato un breve sguardo su onvista e in EUR ho trovato questi 3 bond
2012 7% http://anleihen.onvista.de/snapshot.html?ID_INSTRUMENT=8425131
2019 7% http://anleihen.onvista.de/snapshot.html?ID_INSTRUMENT=8392638
2016 6,875 http://anleihen.onvista.de/snapshot.html?ID_INSTRUMENT=12592969
purtroppo lo spread bid/ask è veramente ampio, dai 5 (95-100) del 2012 ai 10 degli altri 2 e dover comprare al meglio rende la cosa poco appetibile.
Imark
Forumer storico
Ciao Ginopelo... è che sono emissioni molto piccole... e ancor più piccole appaiono se si considera che parliamo di bond sovereign... la prima vede un ammontare ancora in essere per un importo inferiore ai 100 mln euro... non stupisce la illiquidità, dovuta forse più a tale ragione che non al rating speculativo dell'emittente...
yellow
Forumer attivo
Sorpresa.
:sorpresa:
Qual'è il Paese che almeno quest'anno e forse il prossimo è meno depresso ?
Il Venezuela che pare non andrà neppure in recessione.
Ovvio che non stiamo discutendo di una nazione a 5 stelle ma :
Venezuela
Is Akerlof Wrong?
January 16, 2008
By Boris Segura | New York
Venezuela is in the midst of a consumption boom, with a corresponding sharp rise in imports. High oil prices, which are transmitted to the economy via greater government expenditure, are stoking demand pressures. Exchange controls trap the enormous growth in domestic liquidity; in turn, the banking system recycles this excess liquidity in the system into ‘easy’ credit.
Domestic credit has been growing at explosive rates in Venezuela. Total credit in real terms has grown at a compound annual rate of 108% during 2004-07; consumer credit has grown at a rate of 132%, and credit to finance car purchases at 186%. Car loans now make up 44% of total consumer credit, up from 19% in December 2003.
Interest rate and exchange controls, plus directed lending by the central bank, are additional factors behind this explosion of car credit. Exchange controls allow the monetary authorities to keep negative real interest rates without the fear of a balance of payments crisis. This discourages savings and promotes consumption, further fueling the ongoing consumption boom. Interest rate caps and directed lending encourage banks to focus their lending where they can charge the highest nominal interest rate, such as the purchase of vehicles, thereby boosting their bottom line. The Venezuelan banking system has been one of the most profitable sectors during the current boom.
The Venezuelan car market defies economic rules
In his seminal paper, Nobel-Prize winning economist George Akerlof employed the market for used cars as an example of the problem caused by quality uncertainty. One conclusion from his analysis was that, given information asymmetries, once you drive a car off the lot, its price immediately goes down.
However, in Venezuela, the opposite holds – once you take a new car out of the dealership, its price goes up. For example, a used 2007 Ford Explorer XLT commands a 28% premium over a brand new one; in the case of a second-hand 2007 Ford Explorer Eddie Bauer Edition, that figure is 23%. Is Akerlof wrong? We don’t think so. There are long waiting lists to get a new car in Venezuela; in the case of a popular model, they can stretch up to a year. So, consumers are willing to pay a premium in order to avoid delay. This is clearly a case of excess demand for cars in Venezuela, which is explained by a series of distortions that engulf the Venezuelan economy. Our concern is that these distortions may take a more meaningful toll on the Venezuelan economy in the medium term, although in the short term it will dance to the tune of oil prices.
The car market is red hot in Venezuela. Car sales rose to 500,000 units at the end of last year, up from 230,000 units in 2005. You can certainly appreciate this growth in the vehicle fleet in the middle of heavy traffic in Caracas.
Increasingly, imports have been filling this demand, and more export units are being diverted to the local market. However, this is close to ‘as good as it gets’ for the car dealership community: The government is now licensing imports in order to protect the local industry, and has also set a total limit of 500,000 units to be sold in the domestic market for 2008, the same number as last year.
Venezuelais the world’s leader in subsidizing gasoline at the pump. As a result, if you own a car in Venezuela, you don’t feel the pinch at the pump. This undoubtedly fuels demand for cars, but also promotes an inefficient use of energy. Our equity research colleagues from the Energy team have prepared an interesting chart that compares gasoline costs on a global basis.
A cheap dollar subsidizes your car purchase. The (real) bolivar has been on a tear since the last nominal devaluation in March 2005, appreciating by 66%. However, not all of this move can be construed as mere overvaluation; oil prices have risen steadily throughout the same period.
In a typical ‘Dutch Disease’ fashion, the strong real bolivar is hindering tradables production and promoting their consumption; in fact, it is subsidizing imports and also widening the non-oil current account. Venezuelans have access to cheap dollars at the official exchange rate to buy imported cars, which are displacing local production.
Purchase of a car as a store of value and not as a consumption decision. Another reason for the pent-up demand for cars is that they are increasingly being perceived as a store of value in an economy where there are few investment alternatives available for a large section of the population. This observation takes added significance given the large gap between the official and the permuta exchange rates. If there are expectations for currency devaluation, a somewhat liquid asset such as a car could become a decent store of value, particularly when the much weaker permuta exchange rate is viewed as a replacement value. Cars are cheap if you can sell dollars in the permuta market; the problem is that in Venezuela the main supplier of dollars is the government itself, via Pdvsa.
But no crisis is imminent. As we have been arguing for a while, Venezuela does have the ability and willingness to pay its debt, based on current high oil prices and a healthy stock of liquid assets. But its policy framework is far from ideal, as it creates a challenging business environment and myriad distortions in the economy, such as those discussed above for the car market. However, although we suspect that the economy will follow a slow process of deterioration, with increasing macroeconomic imbalances, we do not expect a crisis in Venezuela over 2008-09, unless there is a material and sustained drop in oil prices.
:sorpresa:Qual'è il Paese che almeno quest'anno e forse il prossimo è meno depresso ?
Il Venezuela che pare non andrà neppure in recessione.
Ovvio che non stiamo discutendo di una nazione a 5 stelle ma :
Venezuela
Is Akerlof Wrong?
January 16, 2008
By Boris Segura | New York
Venezuela is in the midst of a consumption boom, with a corresponding sharp rise in imports. High oil prices, which are transmitted to the economy via greater government expenditure, are stoking demand pressures. Exchange controls trap the enormous growth in domestic liquidity; in turn, the banking system recycles this excess liquidity in the system into ‘easy’ credit.
Domestic credit has been growing at explosive rates in Venezuela. Total credit in real terms has grown at a compound annual rate of 108% during 2004-07; consumer credit has grown at a rate of 132%, and credit to finance car purchases at 186%. Car loans now make up 44% of total consumer credit, up from 19% in December 2003.
Interest rate and exchange controls, plus directed lending by the central bank, are additional factors behind this explosion of car credit. Exchange controls allow the monetary authorities to keep negative real interest rates without the fear of a balance of payments crisis. This discourages savings and promotes consumption, further fueling the ongoing consumption boom. Interest rate caps and directed lending encourage banks to focus their lending where they can charge the highest nominal interest rate, such as the purchase of vehicles, thereby boosting their bottom line. The Venezuelan banking system has been one of the most profitable sectors during the current boom.
The Venezuelan car market defies economic rules
In his seminal paper, Nobel-Prize winning economist George Akerlof employed the market for used cars as an example of the problem caused by quality uncertainty. One conclusion from his analysis was that, given information asymmetries, once you drive a car off the lot, its price immediately goes down.
However, in Venezuela, the opposite holds – once you take a new car out of the dealership, its price goes up. For example, a used 2007 Ford Explorer XLT commands a 28% premium over a brand new one; in the case of a second-hand 2007 Ford Explorer Eddie Bauer Edition, that figure is 23%. Is Akerlof wrong? We don’t think so. There are long waiting lists to get a new car in Venezuela; in the case of a popular model, they can stretch up to a year. So, consumers are willing to pay a premium in order to avoid delay. This is clearly a case of excess demand for cars in Venezuela, which is explained by a series of distortions that engulf the Venezuelan economy. Our concern is that these distortions may take a more meaningful toll on the Venezuelan economy in the medium term, although in the short term it will dance to the tune of oil prices.
The car market is red hot in Venezuela. Car sales rose to 500,000 units at the end of last year, up from 230,000 units in 2005. You can certainly appreciate this growth in the vehicle fleet in the middle of heavy traffic in Caracas.
Increasingly, imports have been filling this demand, and more export units are being diverted to the local market. However, this is close to ‘as good as it gets’ for the car dealership community: The government is now licensing imports in order to protect the local industry, and has also set a total limit of 500,000 units to be sold in the domestic market for 2008, the same number as last year.
Venezuelais the world’s leader in subsidizing gasoline at the pump. As a result, if you own a car in Venezuela, you don’t feel the pinch at the pump. This undoubtedly fuels demand for cars, but also promotes an inefficient use of energy. Our equity research colleagues from the Energy team have prepared an interesting chart that compares gasoline costs on a global basis.
A cheap dollar subsidizes your car purchase. The (real) bolivar has been on a tear since the last nominal devaluation in March 2005, appreciating by 66%. However, not all of this move can be construed as mere overvaluation; oil prices have risen steadily throughout the same period.
In a typical ‘Dutch Disease’ fashion, the strong real bolivar is hindering tradables production and promoting their consumption; in fact, it is subsidizing imports and also widening the non-oil current account. Venezuelans have access to cheap dollars at the official exchange rate to buy imported cars, which are displacing local production.
Purchase of a car as a store of value and not as a consumption decision. Another reason for the pent-up demand for cars is that they are increasingly being perceived as a store of value in an economy where there are few investment alternatives available for a large section of the population. This observation takes added significance given the large gap between the official and the permuta exchange rates. If there are expectations for currency devaluation, a somewhat liquid asset such as a car could become a decent store of value, particularly when the much weaker permuta exchange rate is viewed as a replacement value. Cars are cheap if you can sell dollars in the permuta market; the problem is that in Venezuela the main supplier of dollars is the government itself, via Pdvsa.
But no crisis is imminent. As we have been arguing for a while, Venezuela does have the ability and willingness to pay its debt, based on current high oil prices and a healthy stock of liquid assets. But its policy framework is far from ideal, as it creates a challenging business environment and myriad distortions in the economy, such as those discussed above for the car market. However, although we suspect that the economy will follow a slow process of deterioration, with increasing macroeconomic imbalances, we do not expect a crisis in Venezuela over 2008-09, unless there is a material and sustained drop in oil prices.
il Venezuela ha la capacità e la compiacenza di pagare il relativo debito, basato sui prezzi del petrolio elevati correnti e su una sorgente sana delle liquidità.