Venezuelan President Hugo Chavez said on Wednesday his government may target more banks for state intervention, sparking investor jitters two days after his government shut four private banks.
Venezuelan benchmark bonds fell by the most in three months, the cost to insure Venezuelan debt shot to its highest since July and the bolivar weakened to about 5.80 to the US dollar from 5.50 in the parallel non-official currency market.
“There is anxiety in the market .... There is a lot of demand for dollars,” said Flavio Fasano, president of the local financial firm Financial Markets.
On Monday, authorities closed the banks owned by a wealthy businessman, Ricardo Fernandez Barruecos, who has close ties to the government, citing internal irregularities.
The four banks accounted for 6 percent of the South American nation’s deposits, and their administration was taken over by the government on Nov. 20 for violations of solvency regulations and unexplained capital increases.
The closure of Banco Confederado, Banco Canarias, Banco Provivienda and Bolivar Banco brought hundreds of worried depositors onto the streets, and sparked talk that more banks may also be closed or taken over by the state.
Reviving memories of a 1994 financial crisis that wiped out half of Venezuela’s banks, opposition TV stations have been running stories of stranded depositors, though the government says it is protecting those affected by this week’s closures.
“We have our radar switched on to another group of banks,” Chavez said in a speech, without giving more details.
“Rest assured that if I was forced to intervene in all the private Venezuelan banking [system], I will do that.”
Venezuela’s benchmark global bond due in 2027, one of the most widely traded emerging market bonds, closed 2.687 points lower to a bid of 69.563 on Wednesday, for a yield of 13.903 percent.
It was the biggest one-day percentage fall in the price of the bond since Aug. 26. The bond’s yield was its highest closing rate since July 31.
The cost to insure Venezuela’s debt annually against default climbed to about 27 percent of face value on Wednesday compared with about 25 percent on Tuesday, according to data from Markit on benchmark five-year credit default swaps, the highest level since the end of July.
The action on the four banks raised pressure on other firms already hit by recession, Goldman Sachs analyst Alberto Ramos said. “Depositors remain agitated .... There are also reports that a number of brokerage houses are experiencing some distress.”
The Venezuelan Prosecutor’s Office said on Wednesday that its agents raided the Interbursa brokerage and the U21 brokerage as part of the probe into the four banks that were taken over.
Chavez said if it turned out Venezuela’s wealthy elite was behind telephone calls and Web messages aimed at sparking a bank run, then it would backfire and the “private banking system would fall.”
Critics blame Chavez allies, whom they call the “Bolibourgeoisie” after Chavez’s idol Simon Bolivar, for mismanaging some banks.
Archeologists in Peru on Thursday said they found the 5,000-year-old remains of a noblewoman at the sacred city of Caral, revealing the important role played by women in the oldest center of civilization in the Americas. “What has been discovered corresponds to a woman who apparently had elevated status, an elite woman,” archeologist David Palomino said. The mummy was found in Aspero, a sacred site within the city of Caral that was a garbage dump for more than 30 years until becoming an archeological site in the 1990s. Palomino said the carefully preserved remains, dating to 3,000BC, contained skin, part of the
‘WATER WARFARE’: A Pakistani official called India’s suspension of a 65-year-old treaty on the sharing of waters from the Indus River ‘a cowardly, illegal move’ Pakistan yesterday canceled visas for Indian nationals, closed its airspace for all Indian-owned or operated airlines, and suspended all trade with India, including to and from any third country. The retaliatory measures follow India’s decision to suspend visas for Pakistani nationals in the aftermath of a deadly attack by shooters in Kashmir that killed 26 people, mostly tourists. The rare attack on civilians shocked and outraged India and prompted calls for action against their country’s archenemy, Pakistan. New Delhi did not publicly produce evidence connecting the attack to its neighbor, but said it had “cross-border” links to Pakistan. Pakistan denied any connection to
TRUMP EFFECT: The win capped one of the most dramatic turnarounds in Canadian political history after the Conservatives had led the Liberals by more than 20 points Canadian Prime Minister Mark Carney yesterday pledged to win US President Donald Trump’s trade war after winning Canada’s election and leading his Liberal Party to another term in power. Following a campaign dominated by Trump’s tariffs and annexation threats, Carney promised to chart “a new path forward” in a world “fundamentally changed” by a US that is newly hostile to free trade. “We are over the shock of the American betrayal, but we should never forget the lessons,” said Carney, who led the central banks of Canada and the UK before entering politics earlier this year. “We will win this trade war and
Armed with 4,000 eggs and a truckload of sugar and cream, French pastry chefs on Wednesday completed a 121.8m-long strawberry cake that they have claimed is the world’s longest ever made. Youssef El Gatou brought together 20 chefs to make the 1.2 tonne masterpiece that took a week to complete and was set out on tables in an ice rink in the Paris suburb town of Argenteuil for residents to inspect. The effort overtook a 100.48m-long strawberry cake made in the Italian town of San Mauro Torinese in 2019. El Gatou’s cake also used 350kg of strawberries, 150kg of sugar and 415kg of
RSS