June 27 (Bloomberg) -- Peru’s stocks headed for their longest losing streak in a year and bond yields rose amid concern President-elect Ollanta Humala’s economic policies may reduce investment in the mining industry and damp growth.
The Lima General Index retreated 0.9 percent to 18,832.60 at 12:54 p.m. New York time, headed to its sixth straight day of declines. The gauge is down 19 percent this year, the third worst performance among 90 primary indices tracked by Bloomberg.
Investors are concerned Humala, a 49-year-old former army officer, will pursue policies that will expand state-owned companies, raise the minimum wage and increase mining taxes, slowing the private investment that’s fuelling the region’s fastest growing economy, said Alberto Arispe, Chief Executive Officer of Kallpa Securities SAB, a Lima-based brokerage.
“The signs the government’s been giving haven’t been very encouraging, which is why investors are in wait-and-see mode,” Arispe said. “Investors like market-friendly people and Humala isn’t free-market.”
Humala, who takes office July 28, will expand government-run companies including Petroleos del Peru SA, Vice President-elect Marisol Espinoza said yesterday in an interview with Lima-based newspaper El Comercio.
The yield on the nation’s benchmark 7.84 percent sol-denominated bond due August 2020 rose 1 basis point, or 0.01 percentage point, to 6.36 percent, according to prices compiled by Bloomberg.
The sol was little changed at 2.7606 per U.S. dollar, compared with 2.7602 on June 24.
Peru will lead the region with 6.6 percent economic growth, after expanding 8.8 percent last year, according to the International Monetary Fund.
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