Southern Exposure

Desde as Entranhas dos Labirintos Latinos.

Sunday, November 16, 2003

This week in Venezuela

-Venezuela's Electoral Board (CNE) decided by a vote of three to two, that Venezuelans abroad will not be able to participe in the petition drive to ask for a recall referendum for Hugo Chavez' mandate. The Board said that there was not enough time to set the petition drive abroad with sufficient supervision, leaving many wondering what good are the country's Embassies and Consulates abroad.

-Separately, the CNE approved regulation severely limiting advertising for the petition drives as well as any broadcast of any unofficial results past the third day of the petition drives. there will be two petition drives. Staring tomorrow and for the next four days, pro-Chavez supporters will attempt to gather sigantures to recall the oppositions Deputies in the National Assembly. On Nov. 28th. the opposition will attempt to obtain the 2.4 million signatures required to have a recall referendum on Chavez' mandate.

-The Venezuelan Ministry of Finnace succesfully placed US$ 1 billion of a bond with 2018 maturity and 7% coupon. The issue was sold at par in local currency but it is dollar denominated, thus the effective yield will be around 11.6% once it starts trading. (It was trading already today in the informal "when and if" market at 67% for an implicit exchange rate of Bs. 2388 per US$)

-MSCI announced that it will no longer be using the official exchange rate in its Venezuela index. Starting next week, it will use the rate obtained from te arbitrage between the stock of the country's largest telephone company CANTV traded locally and that traded in the US. The arbitrage gives a rate of roughly Bs. 2600 per US$ versus the official rate of Bs. 1600 per US$.

-Venezuela, a baseball-centric country, was excited this week with the victories in the qualifying round for the World Cup of its team against Colombia (in Colombia) and Bolivia (in Venezuela). Venezuela has never even come close to qualifying for the Cup.

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