Bloomberg News

Peru Yields Rise as Chinese Growth Target Damps Copper Outlook

March 05, 2012

Peruvian bonds fell, pushing up yields for the second time in three days, on concern demand for metal exports may wane after China cuts its economic growth target.

The yield on the nation’s benchmark 7.84 percent sol- denominated bond due August 2020 rose one basis point, or 0.01 percentage point, to 5.47 percent at 11:53 a.m. in Lima, according to prices compiled by Bloomberg. The security’s price declined 0.05 centimo to 115.81 centimos per sol.

Copper prices fell in New York as China’s 8 percent annual growth target, in place since 2005, was lowered to 7.5 percent, and on signs automobile sales in the Asian country may be having their worst start in seven years amid a slowing economy.

“China represents 30 percent of the world copper market and is the motor of the emerging world,” said Roberto Flores, head of research at Inteligo SAB, a Lima-based brokerage. “If the Chinese government is comfortable with 7.5 percent, economies in the region, including Peru, could grow more slowly.”

China overtook the U.S. as Peru’s top export market last year on rising purchases of copper, gold and iron ore. Metals account for two-thirds of the Andean nation’s sales overseas.

The sol was unchanged at 2.6750 per U.S. dollar, according to Deutsche Bank AG’s local unit.

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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