Brazils Susep to investigate Banco Rural insurance units Brazil insurance regulator [*1]Susep[/*1] opened an investigation into Banco

Rurals insurance units following the watchdog's [*4]order to intervene[/*4] in the firms last month due to solvency issues. The investigation encompasses [*2]Banco Rural[/*2] units Investprev Seguradora, Investprev Seguros e Previdncia and Investprev Capitalizao, and seeks to determine the liability of the firms' administrators, board of directors and auditors, Brazilian insurance association [*3]CNseg[/*3] said in a press release. The investigation has a 120-day deadline. As country gets downgraded, Argentina turns to China for help with statistics The same week as Standard & Poor's ([*1]S&P[/*1]) [*4]cut[/*4] its unsolicited ratings on Argentina, the country's [*6]discredited[/*6] statistics agency [*2]Indec[/*2] said that it had turned to China for help in designing a new methodology to measure inflation. Indec is now engaged in technical cooperation with China's national statistics bureau in order to produce a nation-wide system for measuring urban inflation. The new system will replace the current system that only measures inflation for the greater Buenos Aires area. The inflation figures produced by Indec are considered not to be credible by local and international analysts as well as the [*3]IMF[/*3]. The Washington-based multilateral [*8]censured Argentina[/*8] over this issue in February and has granted the country until September 29 to show improvements in the way its produces both its inflation and GDP figures, or face potential sanctions. The IMF's executive board is slated to review the issue on November 13. According to Indec, annual inflation in Argentina is running at around 10.5% while credible non-government statistics put annual inflation at around 25%. Among the potential sanctions that the IMF could impose on the country, [*7]Goldman Sachs[/*7] (NYSE: GS) said in February that if Argentina fails to make progress, it sees loss of borrowing and/or voting rights as the most likely alternatives and an outright expulsion from the organization as unlikely. Indec's technical director Norberto Itzcovich said that a visit this month by a delegation from China's national statistics bureau had been "very positive" and useful for the work on the new inflation system.

However, China's way of producing its own statistics has been a concern for analysts and investors for quite some time. And as recently as this month the national statistics bureau admitted that a county government in the Yunnan province had "faked" economic data. Provincial authorities had coerced local companies to inflate the value of their output to boost economic figures, according to Chinese state media. Besides China, Indec said that it is also receiving help from statistical agencies in other countries and 15 Argentine universities to create the new inflation methodology, which is expected to debut before year-end. Argentina's high inflation was among the factors that S&P cited as reasons for its latest downgrade to CCC+ with a negative outlook on "increasing legal risks." S&P said that the rating reflects the South American country's limited access to funding, the lack of predictability in economic policies in the context of high inflation and growing rigidities in government spending. It also reflects diminished debt levels relative to GDP and a relatively high level of international reserves, despite the use of central bank reserves to pay external debt. Top Chilean insurers by premiums in first half of 20132 The latest figures from Chilean securities regulator [*1]SVS[/*1] show that life and P&C insurance premiums in the country grew a respective 6.6% and 2% year-on-year in the first half of 2013. By the end of 1H13, life premiums reached 1.928tn pesos (US$3.841bn currently), while the P&C segment reached 910.554bn pesos. Among Chilean life insurers, the biggest players by premiums remained more or less unchanged from [*6]the first quarter[/*6]. The top 5 companies in this segment at the end of 1H13 were: 1. The [*2]local unit[/*2] of US-based [*3]MetLife[/*3], with 259.242bn pesos in premiums, 2. [*4]Chilena Consolidada[/*4], a subsidiary of Switzerland's [*5]Zurich[/*5], with 220.155bn pesos, 3. [*7]Consorcio[/*7], controlled by a locally owned financial group of the same name, with 178.813bn pesos, 4. [*8]CorpVida[/*8], a unit of Chilean holding Corp Group, with 143.509bn, 5. [*9]BICE Vida[/*9], part of the local financial services group [*10]BICE Corp[/*10], with 125.023bn. Of these companies, Chilena Consolidada grew its premiums at the fastest clip, up 124% year-on-year during H1, while Metlife was the only one of the group to register a decline, as its premiums dropped 12% in the same comparison. Altogether, these five insurers accounted for nearly half of life insurance premiums in the period.

In the P&C segment, the Chilean subsidiary of UK insurer [*11]RSA[/*11] rose from fourth to first compared to [*13]the first quarter[/*13] ranking by premiums, while the remaining top 5 remained the same. The 1H13 ranking is as follows: 1. [*12]RSA Seguros[/*12], with 122.268bn pesos in premiums, 2. The [*14]Chilean unit[/*14] of Spain's [*15]Mapfre[/*15], with 106.745bn pesos, 3. The non-life insurance subsidiary of local bank [*16]BCI[/*16], with 105.977bn pesos, 4. Locally owned [*17]Penta Security[/*17], with 100.285bn pesos, 5. The [*18]Chilean subsidiary[/*18] of US insurer [*19]Liberty[/*19], with 81.830bn pesos. Liberty was closely followed by Chilean P&C insurance company [*20]Asegurardora Magallanes[/*20] in sixth place with 81.223bn pesos. The top 5 companies, along with Magallanes, accounted for some 65% of premiums in the first half. Of the top 5, the fastest growth in P&C premiums was recorded by Mapfre at 16.5% year-on-year. The slowest grower was RSA, which despite its leap in the ranking, expanded premiums by less than half a percentage point during 1H13. Life insurers' combined profits fell 40% year-on-year during the first half, while P&C insurance profits grew 23% in the same comparison. Brazil's consumer delinquency down 10% in August Brazil's consumer delinquency rate was down 10% in August compared to the same month last year, according to credit research firm [*1]Serasa Experian's[/*1] latest consumer delinquency index. Compared to July, consumer delinquency dropped 5.5%, the third consecutive monthly drop. Meanwhile, for the first eight months of 2013 consumer delinquency increased 2.2% compared to the same period last year. According to Serasas economists, the decrease in August is the result of general consumer caution due to increased interest rates and economic uncertainty. By segment, banking debt delinquency decreased 5.4% in August compared to the prior month, while non-banking debt delinquency was down 4.4% and bounced checks saw a 13.4% decrease in month-on-month delinquencies. The average value of banking debt delinquency rose 3.7% year-on-year in the first eight months of 2013 to 1,346 reais (US$589) and bounced checks saw a 9.9% increase in the average value of delinquencies to 1,634 reais. Meanwhile, the average value of non-banking delinquency fell 5.9% in the period to 322 reais. Gold wavers as Syria intervention stalls, QE tapering looms

Gold closed Wednesday at US$1,363.75/oz on the London Bullion Market, slightly up from the previous day's US$1,358.25/oz but down from recent levels above US$1,400/oz as the threat of US military intervention in Syria decreases. US President Barack Obama postponed the congress vote on military action in Syria in a speech on Tuesday night (Sep 10) while a diplomatic solution is explored. The move increased risk appetite, which is bullish for stock markets but is bearish for gold, a safe haven asset. More weakness could be in store for gold next week after the September 17-18 FOMC meeting in which members are expected to start winding down the US$85bn/month bond buying program. "The talk now is that the central bank could remove as little as US$10bn a month as opposed to US$15bn-$20bn; while this could limit the sell-off in gold, we suspect that we still are going to be heading lower nevertheless," Edward Meir, commodities consultant at INTL FCStone, was cited as saying by Kitco. Since the consensus is that the Fed will indeed announce the start of tapering at the meeting, precious metal prices should reflect this already, according to Julian Jessop of Capital Economics. "The question remains by how much the Fed will taper. We would read any tapering of less than US$10bn per month as a bullish relative to where prices are now, while tapering of more than US$15bn, we would read as bearish relative to what the market is pricing," Jessop wrote in a note. BoF Merrill Lynch also believes the market has priced in a slowing of purchases by US$10bn-US$15bn. Gold prices could rally in the short term if the Fed reduces its bond buys by less than expected or holds off on tapering at the September meeting, bank analysts wrote in a note, but the gains would be limited in part by the prospect of rising real rates. [*1]Goldman Sachs[/*1] is also expecting policymakers to curb quantitative easing at the FOMC meeting as the US economy improves. The reduction of asset purchases may be the catalyst that pushes gold prices lower, Goldman analysts wrote in a report cited by Bloomberg. Gold prices would probably fall to US$1,250/oz in the first move to wind down QE, said Joni Teves, an analyst at [*2]UBS[/*2], in an interview with CNBC on Tuesday. "But I certainly wouldn't rule out another attempt below US$1,200/oz if, for example, the Fed is more aggressive than the market is currently expecting," Teves said. Silver closed Wednesday at US$22.91/oz, down from US$23.32/oz in the previous trading session and falling below US$23/oz for the first time in three weeks. BICE Inversiones downgrades Chile steel firm CAP to sell

Chilean investment bank [*1]BICE Inversiones[/*1] has downgraded compatriot iron ore and steel group [*2]CAP[/*2] (BCS: CAP) to sell from hold, and given the firm, which controls mining company [*3]CMP[/*3], a year-end 2014 target price of 12,371 pesos (US$24.65), the bank said in a report. BICE said its decision is in line with major mining comparables and reflects the significant drop in consensus iron ore price projections in the last two years. In the short term, the bank expects a volatile scenario for the stock, primarily on account of the negative news emanating from the steelmaking business. BICE judged CAP's share return to be 5.2% per share, based on an estimated dividend yield of 2.1% and an upside potential of 3.1%. Almost half of Brazils banking transactions made through electronic means Some 42% of banking transactions in Brazil are made through electronic means, a press release by Brazil's federal banking association [*1]Febraban[/*1] said. Using the internet, ATMs, cellular phones and other electronic means, users can pay for things including utility bills, insurance premiums, loan payments, rent and taxes. Febraban has also created a free software application called JIMBO which organizes users bills and fees and reminds them when to make timely payments, the banking association said. Pickup in China's economy to pave way for Vale's vessels to dock in the country's ports Brazilian mining giant [*1]Vale[/*1] (NYSE: VALE) expects the pickup in China's economy to increase steelmaking demand and pave the way for its very large ore carriers (VLOC) to dock at the Asian country's ports, the Wall Street Journal reported. Vale's vessels were acquired in an effort to directly supply iron ore, a key steelmaking ingredient, to the market they were built to serve. But China's government regulations have banned the VLOCs to dock at its ports. In February 2012, China's transport ministry announced a ruling that restricted the rights of ports to accept many of these vessels, prompting analysts to speculate that Vale would no longer be able to make full use of its VLOCs. The use of VLOCs has also faced opposition from Chinese shipowners who fear the miner could monopolize the shipping and iron ore market.

However, in late-August the [*2]Chinese government started consultation[/*2] on revising port safety regulations. The decision could mean that China's restrictions on allowing Vale's ore carriers to dock at its ports could be relaxed. In addition, China's transport ministry has drafted a proposal that could free port authorities to accept vessels larger than current limits. "A decision by China to loosen restrictions on Vale's vessels would be a strategic boon for the world's largest producer of iron ore, and the miner believes China could import iron ore more cost effectively should authorities open the ports to the big ships," the report said. In late-June Vale said it was expecting to win permission "within months" to unload its VLOCs at Chinese ports, according to the director of iron ore and strategy, Jos Carlos Martins. In the meantime, the company is using distribution centers in the Philippines, Malaysia and Oman for its exports to China.