The stock market crash was not free to the Government. Delete the swap and say goodbye to the brokerage cost the state the interest of foreign investors. Now Venezuela has to offer one of the highest interests of the region with the highest performance in the world, to make their debt be interesting to and achieve international buyers obtain the financing you're looking for, it also leads to greater immediate entrance of dollars that fuel the demand for foreign exchange.
The latest issue of debt sold last year after stock market crisis and its almost total disappearance, was offered with a coupon of 12.75% (Global 2022, and PDVSA bonds 2022), now is generating a yield of 18%, which the Republic will cost about $ 18,000 million at maturity. Remember
financial analysts from brokerage firms that acted as local investors in the eyes of foreigners. And as intermediaries will liquidity generated inventory of papers of the Republic (including bonuses PDVSA). Every day drove brokerage firms that market by buying and selling existing roles. For an investor
The conduct of local investors is an indicator: "When a foreign investors began to anticipate that the locals are buying debt is because they are aware that there is information that he has and that these facilities operate, which makes debt is made palatable, "explains one of the old actors of the stock market.
"When a bank decides to sell a significant portion of the debt you have in your portfolio, for example, international investors perceive the possible action and immediately begins to lose some debt because they anticipate that there will be liquidity in the local market, "he adds.
But now is another story. Financial Analysts explain that to the capital market also movement over foreign investors watched the Venezuelan government debt papers.
This was removed after the Exchange Crimes Act to the permissibility of trading securities in foreign currency and forbade them companies intermediation sector and to the holding of government bonds.
A bench in three and two
The country's banking system also functioned Just as brokerage firms in foreign markets, especially with direct operations of its treasury, to streamline and provide liquidity to their investment portfolios, and supplement their income and generate profitability.
But even now the banks have the exclusivity of the intermediation of government debt securities, do not interact directly with foreign markets, but only negotiate with the transaction center of the country at this time, the BCV. Banks are required to negotiate such bonds through the BRT.
foreign investors, according to financial experts do not feel that this new system has the necessary movement to streamline the portfolio, not even those who wager more on emerging markets.
The main reason, say analysts, is that the Central Bank's primary objective is to satisfy the demand for dollars in the country, but does not produce the cash to the bond debt that previous generations securities firms.
"Overseas anyone explain why there are no institutions or brokers in Venezuela, which are those with the ability to place more public debt bonds in international markets," says one of the actors of the late capital market the country.
This, for large foreign investors, represents a risk. Although the Republic has never failed to honor its debt commitments, to an international buyer will appeal the fact remains that in Venezuela, no private institution can respond to a lack of payment on the due date of the paper.
"Although the possibility of default is remote, it is not impossible," remember the corridors consulted. "When investors think they assume that the probability of risk must be of a more expensive interest," he adds.
Carlos Jaramillo, a professor of IESA and capital market expert, remember that a higher coupon is for a nation to pay more money during the existence of that role.
"It is true that high interest to sell the bond guarantees less discount and raise more dollars for this title. But a high coupon agrees to pay a higher amount for the entire life of the bond, "says the scholar.
" To the extent that borrows more than the Republic, the debt service is more important every year, "he added.
gain was abandoned
The sacrifice of the Republic to the latest releases not only reflected in the coupon you are offering, but also the selling price of emissions.
In 2007, the state began to make offers debt issues "on par" for example, if the name of the paper was $ 1,000, the price of that role belonged VEB net change according to the exchange rate at that time.
Before that year, the state was offering a discount, ie the buyer paid title even less than what was meant by the name of the paper. In the previous example, if the price was 90% the investor paid only $ 900 at current exchange rate.
Since 2007, the country's demand for dollars that growth showed that the government even began to produce emissions at a premium price. In this way, received more money for every paper sold. If that extra value was 110%, for example, the investor must pay $ 1,100 to the exchange rate at that time. Still, the securities are sold, the thirst for foreign exchange was the key.
This created an implicit rate above the official, sometimes much higher, and he left the state a rate differential, which after the destruction of the stock market was forced to resign.
Last year the Government returned the emissions at a price at par (100% of value). The sacrifice was mainly due to the exchange rate remained close to that offered in the BRT.
This coupled with the Republic had to borrow a more expensive. If you did not offer a high coupon, the price at which the role cotizarÃa abroad would be lower, resulting that the exchange rate increased more away from that shown by the BCV.
In this same example, if the value abroad is 80% in a course is offered at par, the buyer in Venezuela receive for only 800 $ 1,000 to make the exchange transaction, say the analysts .
"As someone who initially purchase the titles you want is dollars, those same papers are sold on the international market," says one expert.
the end what makes the price of debt is the interest of those investors. INFORMATION WITH YOLANDA
OJEDA
World, 12/05/2011, 4-5, Carjuan Cruz Lopenza
0 comments:
Post a Comment