http://www.el-nacional.com/economia/Bonos-venezolanos-dispararon-oficial-aumento_0_97192728.html

Blanca Vera Azaf December 11, 2012 - 12:35 am

Venezuelan bonds soared yesterday reacted positively to the news of a possible political transition in Venezuela known as just actors in international markets. Meanwhile, the dollar unofficial download failed given the uncertainty that still exists in the foreign exchange market.

The bonds of the Republic were the most increased in price and particularly the Global 2022-which is usually the title marker-rose 4 points to close at a price of 120%. However, that was more accelerated Global 2028 rose 7.75 points to be quoted at the end of the day on 106%. The bond traded at 2016 Republic 97% and increased 1 percentage point, while the Global 2027 closed the day at 104.5% to a rise of 4.25 points.

Regarding PDVSA bonds, in 2013 rose 0.5 points to close at 103.2% and 88.5% in 2017 PDVSA: a rise of 2.05%.

Although the unofficial dollar rate continued to rise, yesterday the Transaction System for Foreign Currency Denominated Securities, operating in the Central Bank of Venezuela, increased bond auctions and ended at $ 25.4 million, the second largest amount traded since November 15.

Reports from international banks agree that the appointment of Nicolas Maduro as successor to Hugo Chavez is good news for international markets, because it is considered one of the relatively moderate within the circle of President.

Adjustments expected. Citi's report states that the main objective is Vice President Nicolás Maduro continue promoting the unity of the ruling party and show himself to the electorate as a "viable alternative". Regarding economic measures as a possible devaluation, indicates no political capital that can deal with the impact on people. "What's more, this could mean that it has put aside any decision that considers the Sitme or official exchange rate indefinitely."

He adds that by not devaluing the Sitme receive bonuses, but also emerge more distortions in the exchange market in the near future.

The firm JP Morgan's report asks how long it will take to Venezuela to conduct macroeconomic adjustments in a situation of uncertainty. He says the devaluation and fiscal adjustment is necessary, but not sufficient to correct imbalances. Ensures that these steps are hard to take if a new election is just around the corner and while the economic team lacks a leader who tells you what to do. It refers to the strategic decisions in the oil sector still frozen and that the market is likely to continue focusing on Chavez exit the scene and the possibility of the opposition to seize the opportunity. They warned that the lack of political definitions extend and deepen the existing macroeconomic imbalances.

The Deutsche Bank report emphasizes that recent announcements will drive the price of Venezuelan assets in the coming weeks, as the possibilities of political change are, at this time, "the highest since Chavez became president in 1998 ". He adds that recent events guarantee a recommendation to increase purchases of long maturity bonds.

Nomura, Japanese firm based in New York, indicating that the growth of government spending is showing depletion numbers. However, there is a growing sense of urgency in terms of currency devaluation to stop rising fiscal gap. In his opinion, this type of decision is expected for days after the regional elections. "But now we think will be delayed."

He also notes that the authorities' response was not reassuring and cite as an example the fact that no decision has been taken with the Sitme despite the decrease in the supply of foreign exchange.

Nomura believes the bond market with high volatility will continue given that you have not seen what the conclusion of the whole political future.

Finally Barclays Capital argues that any successor will be much more moderate Chavez. "We expect a transition that is in line with the Constitution." Therefore reiterate the overvaluation that give bonuses and the Republic of PDVSA.

The Data

In more than 295% above the official exchange rate is quoted unofficial currency in the parallel market. In the last three months the increase was over 50%, driven by currency restrictions in the domestic market.