Apocalyptic South American fuck-up nudges up fund manager's alpha
This Bloomberg lede tiptoes right up to the point of self-parody. (The article itself is good, though – sorry, don’t have a link to the whole thing…) July...
This Bloomberg lede tiptoes right up to the point of self-parody. (The article itself is good, though – sorry, don’t have a link to the whole thing…)
July 24 (Bloomberg) – The first signs that Hugo Chavez’s hand-picked successor is scaling back $8 billion in annual oil subsidies to the Caribbean is bolstering Gramercy Funds Management LLC’s bullish view on slumping Venezuelan bonds.
Guatemala this month became the first of 18 members of the Petrocaribe oil alliance to consider leaving the program, saying that Venezuela had doubled interest rates on loans used to pay for oil. Venezuela also slashed new commercial foreign credit by 72 percent in the first quarter from a year earlier, according to central bank figures. Under Chavez, Venezuela attempted to export its brand of “21st century socialism” through cheap oil shipments across the region, even as the nation’s budget deficit reached record highs and shortages of consumer goods worsened.
While the election of Nicolas Maduro as president on April 14 has caused Venezuela’s dollar-denominated debt to fall almost twice the emerging-market average, the move to cut oil subsidies would lift the value of the bonds, according to Gramercy.
“These positive policy changes coming from the new administration make it an attractive opportunity,” Jeff Grills, a money manager overseeing $3.6 billion at Gramercy, said in a telephone interview from Greenwich, Connecticut.
Caracas Chronicles is 100% reader-supported.
We’ve been able to hang on for 19 years in one of the craziest media landscapes in the world. Now, the difficulty level was raised abruptly with the global pandemic. We’ve seen different media outlets in Venezuela (and abroad) cutting personnel to avoid closing shop. This is something we’re looking to avoid at all costs, and it seems we will. But your collaboration goes a long way in helping us weather the storm.Donate