brics, China, china indonesia, Colombia, common wealth of independent states, Commonwealth of Independent States, Economic growth, gdp growth, Gross domestic product, International Monetary Fund, ivory coast, Paraguay, Sub Saharan Africa, turkmenistan uzbekistan
A few weeks back the IMF posted a forecast on 2013’s Worldwide Economic Growth showing the gap between 2012’s and 2013’s GDP, so the list shows the variation in percentages not U$S. The list is very long so I’ll be focusing today only on the Top 20. Now it caught my attention that on this Top 20 list only 2 BRICS and Outreach Five (O5) countries appear (China and India); regarding the G8 and G20, only 3 countries of the G20 members appear: again China, India and Indonesia. Bear in mind that more than 50% of the world’s GDP is concentrated in the G8-G20 community. So, can we understand that world leading economies are starting to slowdown and the Blue Ocean economies are starting to fill in?
The Top 20’s
The IMF divides its index in 6 Clusters (in alphabetical order): 1) America , 2) Asia,3) Common-wealth of Independent States (CIS) , 4) Europe, 5) Middle East and North Africa and 6) Sub Saharan Africa.
For 2013’s GDP Growth forecast, Asia, The Sub Saharan Africa and The Commonwealth of Independent States (CIS) are the 3 main growing GDP regions in the globe with 18 of the 20 Top growing economies. The remaining 2 are from America (Paraguay, the only country from America) and The Middle East and North Africa (Iraq). Europe as we know, trapped in its debt crisis, is not mentioned in this Top 20 GDP Growth forecast. Making a cluster breakdown we have the following countries: Asia: Mongolia, China, Indonesia, Thailand, India, Vietnam; Sub Saharan Africa: Mozambique, Congo, Ghana, Ivory Coast, Tanzania, Nigeria, Ethiopia, Guinea, Commonwealth of Independent States (CIS): Kirgizstan, Turkmenistan, Uzbekistan, Tajikistan; America: Paraguay and The Middle East and North Africa : Iraq.
The rank top-down as follows: 1-Mongolia +15,7% , 2-Iraq +14,7%, 3-PARAGUAY +11%, 4- irgizstan +8,5%, 5-Mozambique +8,4%, 6-China +8,2%, 7-Congo +8,2%, 8-Ghana +7,8%, 9- urkmenistan+7,7%, 10-Ivory Coast +7%, 11-Tanzania+ 6,8%, 12-Nigeria +6,7%, 13-Uzbekistan +6,5%, 14-Ethiopia +6,3%, 15-Indonesia +6,3%, 16-Guinea +6,1%, 17-Tajikistan +6%, 18- Thailand +6%, 19-India +6% and 20- Vietnam +5,9%.
Good to know that Paraguay is starting to fill in places and that global institutions like IMF are aware of it growth potential. The key here is to bolster infrastructure investment, national and international entrepreneurs must join in this journey. And ladies and gentlemen, not every day you are told that you are #3 in a more that 120 country list regarding your economic potential growth, this has just started… So, cheers Paraguay!
Paraguay hosts the XXII Latam Trust Congress
This weekend Paraguay is hosting a very important summit where we’ll be receiving very important visits from Top Notch academics on Trust/Securitization Contracts. The Asuncion Sheraton has been chosen to be held “The XXII Latam Trust Congress” from october 17th till today, friday 19th. The Latin American Trust Congress is an annual event held by the Latin American Bank Federation (Felaban In Spanish) and Latin American Trust Committee (Colafi in Spanish). This XXII summit will be organized along with the Paraguayan Bank Association (Asoban in Spanish).
The summit aims at examining cutting-edge topics on Trust/Securitization. Financial Institutions, Lawyers, Economists, Government Officials, Project Entrepreneurs and Students attend to strengthen the region’s business networks and also, learn about the several Business Cases taken forth in the region that could be applied in other countries.
It is known that Infrastructure is the main necessity in all the Latin American community, so…why not apply the Trust with its multiplatform to meet these infrastructure needs? And on this, the main focus for this year’s summit will be Infrastructure throughout the Trust (5 of the announced presenters will cover this topic on a variety of applications). Infrastructure Trusts, Real Estate Trust, Airports, Agribusiness, International Trusts, Securitization are among the topics which will be appointed by experts in the field from are over 12 countries in Latam.
Besides the excellent presentations that will be addressed to attendees, Workshops and Discussions will also be an important part of the Summit in this learning curve experience. The XXII Latam Trust Congress lineup is as follows (divided by Latam clusters): I North American presenter: 1) From MEXICO, Guillermo Juan on Trust Structuring of Hotel and Malls Infrastructure. Many Hotels and new Malls in Paraguay have successfully used Trusts/Securitization to finance part/100% of their ventures; let’s see what we can learn from the Mexico Business Case.
II Central American presenter :
1) From DOMINICAN REPUBLIC, Gustavo Vergara Restrepo on Trust Structuring of Roads, Airport and Aqueduct Infrastructure. The Silvio Petirossi Airport urgently needs to be remodeled or a new airport needs to be built -no questions asked-. Two years back an airport concession project was put on hold but rumors are that right now, a new airport protect is being designed.
III Boreal South American presenters:
1) From COLOMBIA , Juan David Solorzano on Infrastructure Project Experiences on Airport Concessions. The Colombian Business Case will also be taken as a model for the future construction/remodeling of air terminalsthat for sure, is just a matter of time-.
2) From COLOMBIA, Marisol Blanco Suarez; WORKSHOP: Structuring Real Estate Trusts – The Colombian experience. Now, many important Real Estate firms from Paraguay are applying the Trusts on their business model with a great market response. The Colombian Business Case will also serve as a model for our market as well.
3) From VENEZUELA, Maraide Jaimes on Reinventing Trust Business. Innovation takes stage with this presenter; this topic will give attendees a cutting edge brief on how innovation has reached the Trusts on this side of the globe.
4) From PERU, Raul Denegri Guerra on TRUSTEE CONNECTION: How to take forth Infrastructure Investments and minimize risk through Trusts. This topic basically takes the very essence of Trusts… “minimizing risks”. We’ll see Raul Denegri’s vision on this matter. 5) From BOLIVIA, Jaime Dunn on Securitization applied to Infrastructure Projects. Met him on Monday at the Asuncion Stock Exchange; quite clear and simple the way he addresses his know-how on Securitization applying user-friendly-speech all the time. The main differences of debt vs. securitization will be disclosed. We’ll learn a lot from this Investment Professional.
IV Austral South American presenters:
1) From URUGUAY, Ricardo Olivera on Impact of Future Receivables Trusts -The Uruguayan Experience. This presentation will provide an overall knowhow on how to apply future cash-flows into a Trust. This business model is quite applied nowadays in our market for many Stock Exchange initiatives as well as OTC ventures.
2) From ARGENTINA, Fernando Schvartz on Agribusiness Financing. Like many South American countries, the bulk GDP comes from Agribusiness, so we’ll have first-hand Business Cases on how this economic unit can apply the Trust on their initiatives and maximize value.
3) From ARGENTINA/ PANAMA, Nicolas Malumian & Luis Chalhoub; PANEL: International Trusts. This topic will be very interesting to know how different legal structures stack up on different coun-tries. Trust and Globalization unite in this panel. How can an entrepreneur in a country A’ apply a Trust structured in Country B’? …we’ll see how.
4) From PARAGUAY : Paraguayan Trustee Bank Managers. DISCUSSION: Trusts Experiences in Paraguay. Its inception, today’s Business Cases and the future opportunities of Trusts/ Securitization applications in our Financial Market… the Greenfield ahead. Trusts/Securitization definitely have a Greenfield scenario in front, let’s see what the years to come will bring to our market…the Intangible Capital ergo, the Know-How… is the first step towards its development.
Continental Bank hits BdL/LuxX with U$S 200M
One of the leading Paraguayan Banks, Continental SAECA has successfully allocated U$S 200M in cross bordering markets offering Bonds at a 8.875% interest rate on a 5 year term. The issue was listed in the Luxemburg Stock Exchange. The structuring venture was led by Bank of America, Merrill Lynch and Citigroup Inc. which worked along with the Paraguayan bank executives to finalize the financial model. There was a high demand from foreign investors which almost tripled the issue amount in U$S 585.6M – totalizing 68 orders. The funds will be applied to finance Industrial and Services Ventures on a mid/long term basis.
This is the second experience of a Paraguayan Bank issuing abroad, the first case was taken forth in early 2012 by BBVA which also listed in the Luxemburg Stock Exchange (BdL) but the volume was quite lower : U$S 100M offering 7.63% on a 5 year term as well -1.245% less than Continental’s Bonds-. Even though it is the second time a Paraguayan Bank issues abroad, it’s the first time that a “Entirely Paraguayan Equity” Bank lists abroad.
Let’s remember that this story had its setback last June due to former President Lugo’s impeachment where for 60 days or so, made the international community think that our economy would suffer a hard downturn (which never happened). Even Forbes mentioned that our economy was not shocked at all by the government change.
It’s important to bear in mind that the Paraguayan Treasury is planning to issue bonds aiming for the first time at international markets; these two previous listings (BBVA U$S 100, Continental U$S 200) will help put Paraguayan Financial Instruments on the international investor radar.
About the BdL-LuxX The Luxembourg Stock Exchange/Bourse de Luxembourg (BdL) was founded in April 5th, 1928 and is based in Luxembourg City, southbound Luxembourg. Frank Wagener is its actual Chairman of the Bourse. BdL lists different types of securities: Equity, Fixed Income, Funds, Commercial Papers (a.k.a. LOCs) and Precious Metals and its index is LuxX. Regarding Fixed Income (our topic in hand); it specializes in cross-border Bond Issuing, with more than 40,000 listings on the platform. The European Bank for Reconstruction and Development (EBRD), The European Commission, The European Investment Bank, The World Bank as well as many Countries (through sovereign debt) use the BdL as a platform. For more information on the BdL visit http://www.bourse.lu
By Stanley Canova