Hugo Chavez Back In The Hospital With Kidney Failure (GXG, EPU)
Tim Seymour: News that Hugo Chavez has checked back into the hospital with kidney failure is giving some traders hope that Venezuela could open up to foreign investment again in the foreseeable future.
Chavez previously went to Cuba on June 9 to have tumors removed for an as-yet-mysterious form of cancer.
Since returning to Venezuela, he has cut down on public appearances but still seems eager to run for the presidency again.
Chavez has ruled Venezuela since 1999, nationalizing key industries along the way — most recently, gold — and serving as an example for similar-minded left-wing politicians.
Since his rise to power, opportunities for retail investors to get involved in Venezuela’s oil wealth in particular have tapered off to almost zero.
If he is sick enough to step down in the near term, it could not only shake up Venezuela a bit but be a huge change for markets throughout the region.
Losing him unexpectedly would create a significant power vacuum in this resource-rich country.
A successor government might well lean toward the left — as Brazil and other countries currently do — while exploring more market-friendly ways of doing business.
Needless to say, the Caracas market would rally off the charts if and when we see a real change of power in Venezuela.
Of course, ways for U.S. retail investors to get exposure to Venezuela are practically nonexistent as yet.
But perversely, any liberalization of the Venezuelan economy could drive allocations out of markets like Peru and Colombia — represented by the iShares MSCI All Peru Capped Index ETF (NYSE:EPU) and Global X FTSE Colombia 20 ETF (NYSE:GXG), respectively — as money moves to welcome the country back into the global framework.
Emerging Money provides insightful and timely information about the increasingly important world of Emerging Market investments. CNBC Emerging Markets Contributor Tim Seymour leads the team of Emerging Money to bring you cutting edge global news and analysis.
About Tim Seymour: Tim is a founder of Emerging Money. He is a founder and Managing Partner at Seygem Asset Management, and The Emerging Markets Contributor to CNBC. Seygem Asset Management focuses on investing throughout the global emerging markets asset class. With a view that emerging and developing economies will continue to outpace the economic growth and advancement of developed economies, Seymour has devoted a career to investing in the dominant markets of tomorrow, today. Seymour’s career has included significant experience in both alternative asset management (hedge funds) and capital markets, having launched two hedge funds, and built the largest Russian broker dealer in the USA. Seymour started his career at UBS, focusing on international credit (cash, swaps, forex) in a specialized hedge fund group (New York). Seymour completed the firm’s training program after graduating with an MBA in international finance from Fordham University. Seymour received his undergraduate degree at Georgetown University.