LatinFinance - Special Edition - August 2013 - 43

Jun 2004
—

Funds grow
Latin pension funds’ assets under management
120

2,500

Chile ( CLP trn)

Peru (PES bn)

100

2,000

Mexico (MXN, bn, right hand side)
80

1,500

60
1,000

50 0

Lula wins again

2013

2012

201 1

2010

2009

2007

2008

2005

2006

2003

2004

2002

Oct 2006
—

2001

2000

Source: SBS, Consar, SAFP

Pension funds’ investment options expand

mexican regulators allow the country’s pension funds to invest in
luiz inácio lula da Silva is re-elected presiequities and foreign securities. Relaxing the regulations opens the
dent of Brazil for a second term, with 61% of
asset management industry and lets afores redirect some $35.37bn
the votes. local interest rates and inflation are
in assets under management. fund managers explain the move as
lower than ever, and exports higher. Just three
a way to return money to retirees by getting returns for the lowest
years earlier, unemployment was over 13% and
risk. Previously, afores could only buy government bonds and highly
voters had been upset that lula had not delivrated investment-grade paper. the development of two risk profiles
means aggressive funds can invest in foreign and mexican equities
ered on previous campaign promises. ahead of
and dabble in derivatives while other investment has to be more
the 2006 election, antonio Palocci resigned as
cautious. By the end of april 2013, afores managed mXP2.08trn
finance minister, hav($164bn).
ing been charged with
Mar 2007
violating the coun—
try’s bank secrecy
laws. Guido mantega
Panama canal expands
president of BnDeS,
Bidding begins for a $5.25bn Panama canal expansion, its first since the canal was opened in
1914. Set to allow bigger container ships to pass, the final bill could top $10bn. that comes after
Brazil’s development
Peruvian toll-road concessionaire iiRSa norte set an innovative precedent for infrastructure
bank, takes over from
funding by selling a $213m securitized bond under 144a rules in the US in august 2006. the
notes are backed by certificados de Reconocimiento de Pago anual de obras (cRPaos).
Palocci.

Aug–05

Ecuador ministEr quits
Rafael Correa, economy and
finance minister under Alfredo
Palacio, the Ecuadorean president, quits after they disagree
about his $500m bond plans to
cover government spending.
Magdalena Barreiro, Correa’s
vice minister, is appointed to the
position instead. Two years later,
Correa will become president.

jAn–06

markEts on
thE risE Mexico’s IPC
stock market index
climbs dramatically,
rising more than 40%
in dollar terms in 2005,
building on a 48% increase in 2004 and 31%
the year before that.
Meanwhile, Brazil’s
stock market index also
jumped more than fourfold from 2003 to 2005 in
dollar terms, and spreads
on Latin American bonds
hit a record low.

jul–06

aGP rEturns in PEru
Alan García returns as
Peru’s president, beating Ollanta Humala in
the run-off. His return to
the post follows Àlvaro
Uribe’s re-election in
Colombia in May.

FEB–07

2008
Sub-prime criSiS
explodeS The first
tremors of the US
subprime mortgage
crisis are felt in February as the US housing
bubble begins to burst.
By September, the US Federal
Reserve cuts its target rate for
the first time in more than four
years as an extended credit
crunch triggers panic in global
financial markets. Worries grow
over the spill-over effects on
Latin America, particularly for
Mexico given its close economic
links to the US.

August 2013 - 25 Years - l atinfina nce.com 43

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