Latin Finance - May 2008 - 32

colombian infrastructure banks about possible advisory roles in such a fund. Zuluaga declines to comment on the size of the fund, or a timetable for its creation. The government is planning a roadshow in the coming months to promote both its sovereign credit and investment in infrastructure. Using Mexico as an example, Rentería says the concept of publicprivate partnership has been most recently encouraged by last year’s sale of a 10% stake in state oil company Ecopetrol. “It was a spectacular thing that happened, she says. “We received $2.5 billion for the 10% stake. With that capitalization, Ecopetrol is going to be able to invest $2 billion each year in exploration and production.” She says the 500,000 new co-owners of the firm – including individuals and pension funds – saw their stock price rise to 2,080 pesos from 1,400 pesos in just five months. “It has become a driver of change for the Colombian Bolsa,” she says. A sequel, open to foreign investment, is in the works, but government officials decline to provide further details. The law allows for up to 20% to be sold publicly. “It’s important that we’ve had experience with concessions, as we’ve done private investment for over a decade,” says Rentería. “We have learned from those experiences, and have a better sense now of where the risks are for the private side.” “The government has to fine-tune many things on the regulatory front. It was slow at first, but now we’re seeing a bunch of projects coming downstream,” says Ramirez. Private equity is in its infancy, but Zuluaga expects more capital to follow in the footsteps of former head of public credit Julio Torres’ Diligo shop, now working to raise $100-$150 million. “Private equity investment is a new development that we expect for the market in the next few years,” says Zuluaga. The opportunities are there, but at this stage security is still a concern for investors. “You can see the progress,” Zuluaga says of the security situation, which has seen in the last five years the first concrete results in decades of conflict between the government, rebels and paramilitaries. Kidnappings, he says, are down to 200 per year from 2,500 in 2001, and the 36,000 killed in 2002 have become about 15,000. and stimulate FDI, but acted temporarily to stem short term and speculative flows. Investment Grade Ready? These perceptions of risk challenge Colombia as it seeks a high grade rating. Two of the three agencies have the country at one notch below BBB status, and markets have largely priced in a raise, seeing improved fiscal numbers and a dedication to liability management as positives. However, the leading agencies are taking a more cautious view given the global environment and blame they are taking for the subprime crisis. Colombia’s reserves reached $19.5 billion in 2007, according to the International Institute of Finance. Public credit director Viviana Lara says the finance ministry is not planning to issue any new debt at this time, as funding needs are met. It may, in the second half of the year, begin considering peso debt options, with the goal of getting local currency debt to 60% of the total, from around 40%. “We have to wait, but there is confidence in the country,” Zuluaga says of an upgrade. “Peru finally got the investment grade from Fitch and probably it shows one of the ways to expect for Colombia.” If the ratings agencies do not grant investment grade, investors are losing an opportunity, says Rentería. “A lot of money is being made,” she explains. “The returns are a reality. Investors from outside Colombia are being held away from our markets and held away from opportunity.” Colombia awaits a free trade agreement to be approved by the US congress, but it is an unfortunate victim of the protectionist discussion dominating this year’s presidential race. Sentiment has complicated what should have been as easy to pass as a similar Peru agreement. “Free trade for us means freedom, a better society and a better democracy,” says Zuluaga. “If the congress approved Peru, then why not Colombia?” LF “We are inviting all investors for what we think will be great opportunities,” says Carolina Rentería, Colombia’s minister of planning and development. A major impediment is capital controls, a controversial measure taken by the government to stem currency appreciation. “Exporters are strategic sectors in county. It’s not easy to adapt them to a very high appreciation process,” says Zuluaga. “We tried to combine some measures. We need to control short term capital.” The minister adds that Colombia wants to encourage 32 LATINFINANCE May 2008

Latin Finance - May 2008

Table of Contents for the Digital Edition of Latin Finance - May 2008

Latin Finance - May 2008
Contents
20 Years in Review
Markets Outlook
Awards - 20 Years of Excellence
Roger Thomas
Jose Olympio
Roberto Setubal
Bill Rhodes
William Rhodes
China and Latin America
Michael Pettis
Mohamed El-Erian
Nicholas Brady
Pedro Pablo Kuczynski
Brazilian Investment Banking
Maria Helena Santana
Fernando Henrique Cardoso
Henrique Meirelles
Arminio Fraga
Andres Velasco
José Pablo Arellano
Codelco
Eduardo Elsztain
Julio Torres
Mark Mobius
Larry Summers
Charles Dallara
Martin Schubert
Claudio Loser
Francisco Gil Diaz
Hans Humes
Francisco Gil Diaz
Therese Rabieh
Nina Shapiro
Enrique Garcia
Angel Gurria
Susan Segal
Martin Krause
Alberto Benavides
Hans Schulz
Lee Buchheit
Latin Finance - May 2008 - Latin Finance - May 2008
Latin Finance - May 2008 - Cover2
Latin Finance - May 2008 - Contents
Latin Finance - May 2008 - 2
Latin Finance - May 2008 - 3
Latin Finance - May 2008 - 4
Latin Finance - May 2008 - 5
Latin Finance - May 2008 - 6
Latin Finance - May 2008 - 7
Latin Finance - May 2008 - 8
Latin Finance - May 2008 - 9
Latin Finance - May 2008 - 10
Latin Finance - May 2008 - 11
Latin Finance - May 2008 - 12
Latin Finance - May 2008 - 13
Latin Finance - May 2008 - 14
Latin Finance - May 2008 - 15
Latin Finance - May 2008 - 16
Latin Finance - May 2008 - 17
Latin Finance - May 2008 - 20 Years in Review
Latin Finance - May 2008 - 19
Latin Finance - May 2008 - 20
Latin Finance - May 2008 - Markets Outlook
Latin Finance - May 2008 - 22
Latin Finance - May 2008 - 23
Latin Finance - May 2008 - 24
Latin Finance - May 2008 - 25
Latin Finance - May 2008 - 26
Latin Finance - May 2008 - 27
Latin Finance - May 2008 - 28
Latin Finance - May 2008 - 29
Latin Finance - May 2008 - 30
Latin Finance - May 2008 - 31
Latin Finance - May 2008 - 32
Latin Finance - May 2008 - 33
Latin Finance - May 2008 - 34
Latin Finance - May 2008 - 35
Latin Finance - May 2008 - 36
Latin Finance - May 2008 - 37
Latin Finance - May 2008 - 38
Latin Finance - May 2008 - 39
Latin Finance - May 2008 - 40
Latin Finance - May 2008 - 41
Latin Finance - May 2008 - 42
Latin Finance - May 2008 - 43
Latin Finance - May 2008 - 44
Latin Finance - May 2008 - 45
Latin Finance - May 2008 - 46
Latin Finance - May 2008 - 47
Latin Finance - May 2008 - Awards - 20 Years of Excellence
Latin Finance - May 2008 - 49
Latin Finance - May 2008 - Roger Thomas
Latin Finance - May 2008 - Jose Olympio
Latin Finance - May 2008 - Roberto Setubal
Latin Finance - May 2008 - William Rhodes
Latin Finance - May 2008 - China and Latin America
Latin Finance - May 2008 - 55
Latin Finance - May 2008 - Michael Pettis
Latin Finance - May 2008 - 57
Latin Finance - May 2008 - Mohamed El-Erian
Latin Finance - May 2008 - 59
Latin Finance - May 2008 - Nicholas Brady
Latin Finance - May 2008 - 61
Latin Finance - May 2008 - 62
Latin Finance - May 2008 - Pedro Pablo Kuczynski
Latin Finance - May 2008 - Brazilian Investment Banking
Latin Finance - May 2008 - 65
Latin Finance - May 2008 - 66
Latin Finance - May 2008 - 67
Latin Finance - May 2008 - 68
Latin Finance - May 2008 - 69
Latin Finance - May 2008 - 70
Latin Finance - May 2008 - Maria Helena Santana
Latin Finance - May 2008 - Fernando Henrique Cardoso
Latin Finance - May 2008 - 73
Latin Finance - May 2008 - 74
Latin Finance - May 2008 - Henrique Meirelles
Latin Finance - May 2008 - Arminio Fraga
Latin Finance - May 2008 - 77
Latin Finance - May 2008 - 78
Latin Finance - May 2008 - Andres Velasco
Latin Finance - May 2008 - Codelco
Latin Finance - May 2008 - Eduardo Elsztain
Latin Finance - May 2008 - 82
Latin Finance - May 2008 - 83
Latin Finance - May 2008 - Julio Torres
Latin Finance - May 2008 - Mark Mobius
Latin Finance - May 2008 - 86
Latin Finance - May 2008 - Larry Summers
Latin Finance - May 2008 - Charles Dallara
Latin Finance - May 2008 - Martin Schubert
Latin Finance - May 2008 - Claudio Loser
Latin Finance - May 2008 - Hans Humes
Latin Finance - May 2008 - 92
Latin Finance - May 2008 - Francisco Gil Diaz
Latin Finance - May 2008 - Therese Rabieh
Latin Finance - May 2008 - Nina Shapiro
Latin Finance - May 2008 - Angel Gurria
Latin Finance - May 2008 - 97
Latin Finance - May 2008 - Susan Segal
Latin Finance - May 2008 - Martin Krause
Latin Finance - May 2008 - 100
Latin Finance - May 2008 - Alberto Benavides
Latin Finance - May 2008 - Hans Schulz
Latin Finance - May 2008 - 103
Latin Finance - May 2008 - 104
Latin Finance - May 2008 - 105
Latin Finance - May 2008 - 106
Latin Finance - May 2008 - 107
Latin Finance - May 2008 - 108
Latin Finance - May 2008 - 109
Latin Finance - May 2008 - 110
Latin Finance - May 2008 - Lee Buchheit
Latin Finance - May 2008 - 112
Latin Finance - May 2008 - Cover3
Latin Finance - May 2008 - Cover4
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