Bloomberg News

Peru’s Dollar Bonds Gain as Anti-Mining Protesters Seek Talks

December 15, 2011

Dec. 15 (Bloomberg) -- Peru’s dollar bonds rose, pushing down yields to a four-week low, after opponents to Newmont Mining Corp.’s mine expansion, the Andean country’s biggest investment project, ended their protests and agreed to talks with the government.

The yield on the nation’s benchmark 6.55 percent dollar- denominated bond due March 2037 fell four basis points, or 0.04 percentage point, to 4.76 percent at 4:02 p.m. New York time. That’s the lowest yield since Nov. 17. The security’s price rose 0.73 cent to 126.05 cents per dollar.

President Ollanta Humala fired 10 ministers on Dec. 11, four months into his term, as he sought to speed up the resolution of anti-mining protests. His new Cabinet Chief Oscar Valdes said yesterday Humala must decide whether to call off the state of emergency in Cajamarca, where Newmont’s project is based, after local political leaders ended three weeks of protests.

“Overall the market has viewed the cabinet changes positively,” said Bret Rosen, a strategist at Standard Chartered Bank in New York. “Peru fundamentals still look good, but investors have had their worries about the implications of the protests.”

The sol gained 0.1 percent to 2.6970 per U.S. dollar at today’s close, from 2.6990 yesterday, according to Deutsche Bank AG’s local unit.

The central bank didn’t buy or sell dollars in the spot currency market today.

Peru’s economy expanded at the slowest pace in 21 months in October as rising consumer demand and government outlays failed to offset a slowdown in private investment. Gross domestic product rose 5.1 percent in October from a year earlier, the national statistics agency said today in an e-mailed report.

--Editors: Brendan Walsh, Glenn J. Kalinoski

To contact the reporter on this story: John Quigley in Lima at jquigley8@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net


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