Council on Hemispheric Affairs — China in L America- a partner, not a threat (so far)

Apologies on the lack of updates and coverage as of recent. I’ve been in transit from NYC –> Belo Horizonte and was stuck a few days without net or rather without easy access to the net in San Paulo.

Will be publishing from Belo Horizonte for the next few days.

China’s Claim in Latin America: So Far, a Partner not a Threat Monday, 28 July 2008, 4:57 am
Opinion: Council on Hemispheric Affairs by Jamie Heine By light years, Washington traditionally has held the upper hand when it comes to foreign influence on Latin America. Its hemispheric power-advantage rests on decades of security, trade, investment, and ideological connections. However, the era of globalization is now tearing down many of the world’s hemispheric divides.

Latin America is rapidly diversifying its international relations as major regional powerhouses, such as China, increase their presence in the region. Many view China’s growing influence in the western hemisphere as a challenge to the U.S.’s historic regional supremacy. However, the struggle for power and influence need not automatically reflect a winner-take-all competition, as both outside megaliths can benefit from China’s presence in Latin America. China’s Economic Expansion China’s phenomenal economic growth in the past quarter century has helped motivate Beijing to globalize its industries.

From 1990-1998, China’s average annual economic growth rate was 11.2 percent, compared to the world’s average rate of 2.4 percent during the same time frame (China’s Average Economic Growth Rate in the 90s Ranked 1st in the World 2000) and the country’s growth rate is projected to remain above 8.5 percent for the next five years (Erikson 2008). Beijing’s economic ties to Latin America have witnessed comparable growth: from 1993 to 2003, China’s trade with Latin America increased by 600 percent (Xinhua News Agency 2004).

Chinese president Hu Jintao set the mark for increasing trade with Latin America to $100 billion by 2010, a goal easily met when trade surged to $102.6 billion in 2007, which represents a 42.6 percent increase from 2006 (Erikson 2008).

Click here to access the remainder of this analysis prepared by COHA Research Associate Jamie Heine

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India, China continue to push for more nuclear facilities to ease energy shortages — prices set to rise says analyst Yuriy Humber

Moscow: The uranium industry’s worst year is about to collide with a nuclear construction programe in India and China that rivals the ones undertaken during the oil crisis of the 1970s.

The result is likely to be a 58% rebound in uranium to $90 (Rs3,870) a pound from $57 now, according to Goldman Sachs JBWere Pty. Ltd and the Rio Tinto group, the third biggest mining company. Uranium plunged 57% in the past year as an earthquake damaged a Japanese plant that is the world’s largest and faults shut down reactors in the UK and Germany.

Plans for India and China to end electricity shortages will ripple from Canada to the Australian outback and the flatlands of Kazakhstan, the primary sources of uranium. India will start three reactors this year, with another six due next year in India, China, Russia, Canada and Japan. Uranium demand worldwide will rise as fast as oil this year, or 0.8%, Deutsche Bank AG forecasts.

Scarce commodity: The Hamaoka nuclear power station in Japan. Uranium plunged 57% in the past year
as an earthquake damaged another plant in Japan and faults shut down reactors in the UK and Germany.
(Photo: Robert Gilhooly/Bloomberg)

“The first wave of growth is going to come from the emerging economies,” said John Wong, fund manager with CQS UK Llp. in London, which has $10 billion under management including $150 million of uranium investments. “People are starting to look at coal, gas, oil and seeing the energy prices go up, they wonder about uranium.”

Click here to access the full article from Livemint News.

CTAPDA Website Directory

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Jim Rogers — Commodity Guru: Hot on China yet cold on India

Courtesy of Commodity Online – News or Click here to Access the full story by George Lype

SINGAPORE: Global market meltdown, recession and bankruptcy fears and dipping profits of companies are wrecking major economies in the world these days. But ace commodities investor Jim Rogers continues to be very be hot on China.

”China is a country I am very hot on. I believe that Chinese economy will overtake the US economy, and China has the best investment potential in the world today,” Rogers, author of such famous books like Hot Commodities and A Bull in China, told Commodity Online.

He said three billion people living in Asia, most of them in India and China, will account for a major portion of the total demand for commodities in the coming years.

”Asia is fueled by massive investment and growth. And in Asia, China is the hottest destination. So I continue to look for investment opportunities in China,” Rogers, who along with billionaire investor George Soros founded the successful Quantum Fund. For more information on the Quantum Fund, click here to access George Soro’s trading website (http://www.sorostrading.com/)

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Rogers may be hot on China; but when he talks about India, the legendary investor gets cold feet. “I am excited about India as a travel destination. For an investment proposition in India, I would think twice,” he said.

He says even though India like China has been growing phenomenally well, political and bureaucratic hurdles still exist in India. “Plus, the infrastructure in India continues to be bad compared to China. In China, truck drivers drive at the speed of 70 kilometers per hour. In China, they can drive only at a speed of 20 kilometers because the roads are so bad,” Rogers said.

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Click here to access the full story from Commodity Online

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Sovereign Wealth Fund Tracker (SWFs) Introduced by Global Insight

Global Insight Weekly Newsletter

Sovereign Wealth Fund Tracker

Unparalleled coverage of Sovereign Wealth Funds, their investment strategies, and the controversies that surround them

Countries rich in foreign exchange reserves – often oil-derived – have emerged as some of the most powerful global investors. Some $80 billion has already been ploughed into bank shares or bank equity stakes in the U.S. alone. In the wake of the current credit crunch, developed economies have generally welcomed the timely infusion of capital, but there is growing unease too.

Governments are concerned that foreign ownership of key domestic assets (including corporations, banks and infrastructure) may threaten national security, and they are pressing the funds to be more transparent about their management and strategy. For three years in a row, Sovereign Wealth Funds have grown a remarkable 24% annually, and now exceed some $3.5 trillion.

If growth rates remain constant, they will surpass the entire current economic output of the United States by 2015, and Europe by 2016. Their importance already rivals that of hedge funds and private funds combined.

* Will Sovereign Wealth Funds continue this incredible growth?
* How much resistance are they likely to encounter, and where?

Introducing: Sovereign Wealth Fund Tracker

Global Insight’s Sovereign Wealth Fund Tracker provides an in-depth account of funding sources; evolving regulatory and policy environments; and investment strategies. This pilot edition is provided as a free trial. To subscribe to comprehensive quarterly updates, please register your interest with Global Insight.

The report comprises a global summary, 3 regional overviews, and a section on recipient countries (G7 plus Switzerland and Australia). Commentary and data tables include:

– Detailed 3 year forecasts of sovereign wealth growth by country, broken down by type
– Overall sovereign wealth forecast out to 2016
– Analysis and implications of significant events by country within each region
– Legal and policy environments affecting sovereign wealth flows
– Detailed coverage of institutional and market developments, investment vehicles, and specific mergers and acquisitions

Key findings of the Sovereign Wealth Fund Tracker:

• The largest Sovereign Wealth (SW) generator remains China, with approximately US$1.2 trillion, followed by Russia and Kuwait.
• The fastest growing generators of SW over the last five years were: Nigeria 291%: Oman 256%; Kazakhstan 162%; Angola 84%; Russia 74%; and Brazil 65%.
• High energy and commodity prices, combined with a declining dollar, have turbocharged Sovereign Wealth Funds (SWF) in the Middle East, and spawned a new generation of these Funds.
• Record inflation in SWF countries is the new “push factor” behind SWF’s foreign expansion. Inflation has intensified in China, U.A.E, Saudi Arabia, Russia and Kuwait, creating pressure to invest domestic money abroad.
• The vast majority (93%) of SWF equity investment has so far targeted the western financial sector. But there is new interest in energy and mining companies.
• In January 2008 alone, worldwide acquisitions by SWF’s totalled US$20.6 billion or nearly one-third of the total US$60 billion that SWFs made in mergers and acquisitions (M&A) for the entire year 2007. SWFs accounted for 35% of world M&A activity in 2007, and 28% of all M&A in the US during January 2008, exceeding M&A activity from private equity buyouts, which fell in the last quarter of 2007, as the credit crunch unwound debt leveraging.
• SWFs have fostered new alliances with private equity to avoid scrutiny. SWFs already account for approximately 10% of private equity investments globally and should grow further in the next few years.

The “Sovereign Wealth Fund Tracker,” part of Global Insight’s Sovereign Risk Service, provides in-depth analytical quarterly reports on SWF activity, including funding sources, evolving legal and policy environments affecting SW flows, and investment strategies, investment vehicles and specific mergers and acquisitions.

Click here to access Global Insight’s release material (PDF)

For additional information feel free to contact:

For more information, please contact:
North America
Morgan Miller
morgan.miller@globalinsight.com
+1-212-884-9516

Europe
Marc Cohen
marc.cohen@globalinsight.com
+44-20-7452-5197

Asia
Reno Sio
reno.sio@globalinsight.com
+65 6430-6621

*** Note developments above provided in totality from Global Insights — http://www.globalinsight.com/

Global Insight is a leading provider of intentional financial and economic information and analysis. Visit their website to sign up for the news letter and reports on topics such as SWF’s, energy analysis, global macro economic conditions, and more.

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Investors begin re-thinking oil positions in their portfolio’s

http://www.todaysfinancialnews.com — Quietly, hedge funds and company insiders are moving into position to profit from an imminent drop in oil prices. Find out where they invest.

Smart money moves out of oil: TFN 60-Second Buzz 07/17/08
Uploaded by TodaysFinancialNews

http://www.todaysfinancialnews.com — Despite temporary pullbacks, crude oil prices are again setting new historic record highs. But the beginnings of an alternate money flow are becoming visible.

Contrarian oil play: TFN Amberger Smackdown 07/17/08
Uploaded by TodaysFinancialNews

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Global trends worth watching

http://www.todaysfinancialnews.com — Bill Patalon, one of the nation’s top analytical business journalists, tell us where to invest — even in this global economy.

“Follow the money.”

10 Global Trends Worth Watching: TFN Market Insights
Uploaded by TodaysFinancialNews

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South American Energy in focus

Venezuela’s PdVSA Reports Successful Oil Drilling Ecuador

A slew of energy developments in a handful of countries in South America has made headlines in the past day or so. For starters Venezuela and Ecuador made headlines this morning once again… this time for successful drilling and exploration in the Amazonian region. The newly established supply of crude will eventually be sent to the new refinery being build on the pacific coast.

Click here to access the full story from Rigzone.

Petrobras’ Production Soars 3.3% More in June

Petrobras’ average oil and natural gas production abroad was 218,117 barrels of oil equivalent per day (boed) in June, 8.1%.

Added to the volume lifted from the domestic fields, Petrobras’ total production in June set a monthly record, topping out at 2,421,155 barrels of oil equivalent, 3.3% more than a year ago and 2.3% higher than May 2008.

Click here to access the full story from Rigzone.

Arduous Process of getting the Camisea facilities in Peru up and running
– Wood Snag 3-Year Maintenance Contract for Camisea Facilities

The Camisea Project comprises the exploitation The San Martin and Cashiriari fields natural gas fields, the construction and operation of two pipelines, one for natural gas (NG) and one for natural gas liquids (NGL) and the distribution network for natural gas in Lima and Callao. The pipelines wiII make NG and NGL available for domestic consumption and for export.

Natural gas wiII be transported to the main consumption center in Lima, where it will be used for residential and industrial purposes and to generate electricity, that will then be distributed nationwide through Peru’s existing transmission infrastructure (click here to read more about the Camisea Project)

Wood Group Production Facilities has been awarded a three-year, performance-based contract by Pluspetrol Peru Corporation to provide integrated maintenance services for the Camisea facilities in Peru. The Camisea project includes the largest natural gas field in the region.

Click here to access the full story from Rigzone

Shell to invest $300m in search for oil and natural gas in Peru

Royal Dutch Shell is ready to invest as much as $300 million in exploring for oil and natural gas in Peruvian waters as part of a agreement with BPZ Energy, executives from the two companies said Thursday.

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In March, U.S.- and Peruvian-owned BPZ found an estimated 60 million barrels’ worth of crude oil and 40 million cubic feet of natural gas in the same region off Peru’s northern Pacific coast.

The accord announced Thursday calls for Shell to spend up to $300 million on exploration and – if reserves are found – exploitation of natural gas, while BPZ will put the same amount into searching for crude oil along with an additional $150 million to build an electric plant in the area.

Under the deal, BPZ will get 51.75 percent of any oil or gas produced and Shell will claim the rest.

Click here to access the full story from Rigzone

Geopark Grabs up Additional Petroleum Block in Chile

GeoPark Holdings Limited announced that the Ministry of Mining in Chile has awarded the Otway Block in southern Chile to a consortium consisting of GEOPARK (42%), Methanex Corporation of Canada (16%) and Wintershall Energia SA, a division of BASF Ag of Germany (42%).

The Otway Block is a large new attractive exploration area (5,992 square kilometers) located in the Magallanes region near GEOPARK’s Fell Block operation in Chile. GEOPARK is the first and only private-sector oil and gas producer in Chile and the addition of the new Otway Block will further enhance GEOPARK’s position as the premier private-sector oil and gas operator in Chile.

Click here to access a previous post in regard to GEOPARK’s natural gas discoveries in the Magallanes Region — published on South-South Cooperation on June 17th, 2008.

Click here to access the full article from Rigzone

Colombia to create oil price stabilization fund

Colombia’s government is creating an oil price stabilization fund (FEPC) that will be used to cushion domestic oil prices from unexpected rises on international markets, government news agency SNE reported.

Congress has approved the fund, which is included in the national development plan and must go to the president for final authorization. The finance ministry would administer the fund, which would receive financing from the existing oil stabilization fund (FAEP) owned by state oil company Ecopetrol.

Click here to access the full story from Rigzone

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Ecuador, Venezuela agree to build biggest oil refinery in South America, and…. on the Pacific Coast!

Mercopress reports Rafael Correa, the Ecuadorian president, and Hugo Chavez, his Venezuelan counterpart, have entered into an agreement to build the biggest oil refinery on South America’s Pacific coast.

Correa and Chavez

“Instead of having refineries in the United States, we decided to keep them here in our geopolitical context,” Chavez said.

Chavez hopes to wean Venezuelan crude away from the US, where Venezuela currently runs seven refineries.

The joint 6.6 billion dollar project by state-run oil firms PDVSA, of Venezuela, and Petroecuador, of Ecuador, will refine 300,000 barrels of crude a day, saving Ecuador 3.0 billion dollars in oil imports a year, Correa said

Click here to access the full story from Mercopress

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Microfinance in focus: IDB to donate $4.3 billion to ACCION over the next 5 years — ACCION’s website now in Spanish

ACCION International Newsletter – July 17, 2008

The Inter-American Development Bank (IDB) has committed $4.3 million to ACCION over the next five years to extend microfinance into rural Latin America. Around the world, the rural poor – often among the most impoverished – are under-served by microfinance.

ACCION will work with five of its long-term partners in Latin America – Banco Ademi in the Dominican Republic, CREDIFE in Ecuador, Financiera FAMA in Nicaragua, FINAMERICA in Colombia and Mibanco in Peru – to overcome barriers and explore new technological and methodological solutions. The project will provide financial services and training to the rural poor that are less expensive, better tailored to the client and easy to replicate.

ACCION website now in Spanish! / ¡La página web de ACCION ahora en Español!
The ACCION International website is now available in Spanish, providing information to Spanish-speaking microfinance enthusiasts about our mission and clients served, as well as our partners, products and services. Visit www.accion.org/espanol to see the new site.

About ACCION

The mission of ACCION International is to give people the tools they need to work their way out of poverty. By providing microloans, business training and other financial services to poor men and women who start their own businesses, ACCION‘s partner lending organizations help people work their own way up the economic ladder, with dignity and pride. With just a little capital, people can grow their own businesses. They can earn enough to afford basics like running water, better food and schooling for their children.

In a world where three billion people live on less than $2 a day, it is not enough to help 1,000 or even 100,000 individuals. ACCION’s goal is to bring microfinance to tens of millions of people – enough to truly change the world. We know that there will never be enough donations to do this. That’s why ACCION has created an anti-poverty strategy that is permanent and self-sustaining.

To read more about ACCION International visit there website – http://www.accion.org

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Argentina in focus: Big shots on Wall Street pessimistic about the Argentine Economy

Mercopress published a story yesterday detailing the general outlook the big investments banks, analysts hold in regard to Argentina’s economy.

The consensus among Merrill Lynch, Barclay‘s and Credit Suisse is not pretty. All three firms are recommending their clients get rid of their assets in Argentine pesos, estimating that sooner or later the Argentina Central Bank will have to yield in the dispute over the US dollar in the local money market.

Bolsa de Comericio de Buenos Aires

According to a survey from Bloomberg, a majority of analysts believe the US dollar will be costing 3.20 Argentine pesos at the end of the year from its current 3.05. But the main fear of analysts is a continuation of the current economic policies which could lead to a crisis “comparable to that of 2001/02”, when the Argentine economy melted, unless there is a massive correction of economic indexes (such as retail inflation), elimination of subsidies (mainly energy and transport) and increase in public utilities rates, among other issues to address.

Click here to read more on this story from Mercopress

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