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Gold/Mining/Energy : Copper - analysis -- Ignore unavailable to you. Want to Upgrade?

To: Stephen O who wrote (1338)	12/15/2005 6:25:28 PM
From: Stephen O	Read Replies (1) \| Respond to of 2131

Potential big trouble in Peru, that would really set the metals on fire, and they say Africa investing has poilical risks: Peru's Stocks Fall on Political Concern: World's Biggest Mover 2005-12-15 16:57 (New York) By Alex Emery Dec. 15 (Bloomberg) -- Peruvian stocks fell, the biggest fluctuation among equity markets included in global benchmarks, after a former rebel advanced in a presidential poll earlier this week, spurring political concerns and a drop in the local currency. The 33-member Lima General Index fell for a fourth day, dropping 167.66 points, or 3.3 percent, to 4,993.35, led by the Peruvian subsidiary of Spain's Telefonica SA, the country's largest phone company. ``It's an over-reaction of smaller investors who are nervous about the exchange rate and the upcoming elections,'' Fernando Romero, a trader at Lima-based brokerage SAB Investa, said in a phone interview. ``This is a short-term drop.'' Ollanta Humala, a former army lieutenant colonel who took over one of Southern Copper Corp.'s mines in a revolt against then- President Alberto Fujimori in October 2000, was second in a Dec. 12 poll ahead of next year's presidential election, with support from 22 percent of respondents. Humala's political manifesto includes abolishing all forms of currency, the expulsion of foreign companies and the death penalty for government officials found guilty of corruption. Humala's brother Antauro launched a separate uprising in the southern highlands on Jan. 1 that left six dead. The local currency, the sol, dropped for the third day in four, falling 0.1 percent to 3.4395 soles to the U.S. dollar at 2:21 p.m. The sol has fallen 5.6 percent since Aug. 25. The average yield gap between Peru's dollar-denominated foreign bonds and U.S. Treasuries has risen 0.63 percentage point since Sept. 27 to 1.98 percentage points, according to JPMorgan Chase & Co.'s benchmark emerging-markets index. Stocks React Telefonica's American depositary receipts traded in Lima fell 31 cents, or 0.7 percent, to $44.60, and accounted for more than 25 points of the index's decline. The Humalas' political movement advocates renationalization of Telefonica, which bought state phone company CPT in 1994, in addition to mines. Mining shares, led by precious metals producer Cia. De Minas Buenaventura SA, also slid. Buenaventura fell 5.1 pesos, or 4.9 percent, to 99.9 soles. Phelps Dodge's Sociedad Minera Cerro Verde, fell 24 centavos, or 5.2 percent, to 4.41 soles. Sociedad Minera El Brocal SA, which produces more than one metal, dropped 1.2 pesos, or 14.2 percent, to 7.25 soles. The prices of gold and silver have each declined 5 percent since Dec. 9. Zinc has fallen 3 percent since Dec. 13. Peruvian investors are also concerned over the outcome of the Dec. 18 presidential elections in neighboring Bolivia, where coca farming leader Evo Morales is poised to win, according to a Dec. 7 poll. Morales, an Aymara Indian who pledges to grant the state a greater role in the economy, made several attempts this year to form a Peruvian branch of his party, Movement Toward Socialism, in an Aymara-populated region of Peru near the Bolivian border. ``Investors are concerned a Morales victory in Bolivia will spur Humala's candidacy in Peru,'' Romero said. --Editor: Kleege.