En Español Peru has responded quickly and effectively to Covid-19. It was the first country in the region to impose a quarantine, onMarch 15, followed by a curfew onMarch 18. Both have been extended and are set to stay in place until at least April 12, although they seemlikely to be prolonged further. Other measures taken so far include a ban on inbound and outbound international…
With Peruvian GDP growth improving to 4% in 2018, lending saw some renewed dynamism after a slow couple of years. Showing its fastest growth since 2010, lending from private sector banks was up 8.77%, according to the Peruvian Banking Association (Asociación de Bancos del Perú, ASBANC). Though different data providers offer different figures, partly due to fluctuations caused by the dual-currency…
Despite solid economic growth and macroeconomic stability, the size and scope of Peru’s capital markets remain limited. As the IMF highlighted in July 2018, domestic capital markets remain shallow and illiquid, and the stock market’s capitalisation as a share of GDP has increased only marginally. High market concentration is partly to blame, and Peru needs to encourage broader participation…
The banking crises of the 1980s and 1990s have left Peru with a highly concentrated, conservative banking system that is on one of the region’s most solid foundations, boasting strong capital and liquidity. The sector has retained a positive outlook from global credit ratings agency Moody’s since November 2017, which last reaffirmed this view in October 2018, predicting a recovery in loan…
Peru has become a beacon of macroeconomic stability in Latin America, with top-notch credit ratings and an admirable inflation record. However, while the Lima Stock Exchange (Bolsa de Valores de Lima, BVL) is one of the oldest among Latin America’s major economies, having been founded in 1860, it is also one of the smallest. The development of Peru’s capital markets has not kept pace with…
The period of easily raising funds from abroad seems to be coming to an end for emerging markets around the world. In the new environment of higher interest rates in the US and increased competition for capital flows, portfolio managers are becoming more selective with where they place their money. One way for developing nations to ensure that their financial markets can continue to attract…
The Peruvian insurance market as a whole returned to profitability in 2018, following losses and anaemic expansion over the course of 2016 and 2017. Underwriters enjoyed the most robust returns in the life segment, particularly in personal income annuities, which have come into high demand among new retirees as reinvestment vehicles for pension withdrawals. Furthermore, overall claims fell…
Interview:Marco Antonio Zaldívar How will the announcement of large-scale mining investments affect capital markets? MARCO ANTONIO ZALDÍVAR: It is important to note that Peruvian capital markets are heavily reliant on external factors, with an emphasis on global metal prices. The overall volume of traded stocks in Lima can usually be correlated to the international price of copper. This is…
Interview:Gianfranco Ferrari Why has the banking sector become more solarised? GIANFRANCO FERRARI: Peruvians have been accustomed to making purchases with US dollars for decades. However, many citizens now trust their national currency, after twenty years of prudent macroeconomic policies, and US dollars have become a safe haven rather than an everyday transactional currency. Both the Central…
Interview:Jorge Ramos Raygada How does economic informality affect the growth prospects of the insurance sector? JORGE RAMOS RAMOS: Basic pension deposits are compulsory worldwide. Very few countries have the market sophistication needed for customers to create decades-long savings plans and most people prefer to take a short-term view in their financial decisions. However, higher health standards…