Maduro Claims Victory After Mayor Races Show Split Venezuela

Venezuela President Nicolas Maduro claimed victory after preliminary results for mayor elections yesterday showed his party won 44 percent of the vote, according to the national electoral council.

The opposition won the mayoral race in the Caracas metropolitan district and the cities of Maracaibo and Valencia. It took 41 percent of the popular vote in the races nationwide, Tibisay Lucena, the head of the national electoral council, said shortly after 10:00 p.m. on state television yesterday.

Maduro will use the popular vote victory by his United Socialist Party as a show of support and is set to advance with government intervention in the economy that included new price controls in the weeks leading up to the vote, Asdrubal Oliveros, director of Caracas-based consultancy Ecoanalitica, said in a phone interview yesterday.

“The results strengthen Maduro,” Oliveros said. “Maduro now has two years without elections, and this should give him the margin to continue with economic changes.”

Maduro’s approval rating rose to 50 percent in November, Bank of America said Dec. 6 in a note to clients citing a Datanalisis poll, up from 41 percent in September. The Caracas-based polling agency declined to make the surveys public.

About 59 percent of registered voters participated in the election, Lucena said. The government’s PSUV party won in Libertador, Caracas’s most populous municipality, while the opposition won the mayorship of Barinas, the capital city of the home state of late President Hugo Chavez, according to Lucena.

Without Pause

The yield on the Venezuelan government’s benchmark 9.25 percent dollar bonds due in 2027 fell 9 basis points, or 0.09 percentage point, to 13.18 percent at 12:18 p.m. in New York today, according to data compiled by Bloomberg.

“This is a victory of work without pause,” Maduro said on state television, adding that he recognized the opposition had won in most parts of Caracas. “They had said this was a referendum, that Maduro was going.”

Lucena didn’t immediately provide results for other municipalities of Caracas including Chacao and Baruta. Opposition candidate Antonio Ledezma won mayoral race in the Caracas metropolitan district, she said.

Maduro used troops to enforce price cuts in electronic stores and temporarily seized an Irish-owned packaging company last month, saying companies are overcharging consumers. He has also pledged to lower prices for cars and commercial leases, warning business owners that he is “going all the way” after lawmakers gave him the power to rule by decree for one year.

Happy Christmas

Maduro said yesterday that he would make new economic announcements this week.

“Policy will remain highly interventionist as challenging macroeconomic dynamics keep the government on the defensive,” Eurasia Group analyst Daniel Kerner said today in an e-mailed note.

“The victory today is the guarantee of a happy Christmas,” Maduro said, adding that pop star Antonio ‘El Potro’ Alvarez, affiliated with the government’s socialist party, lost in the Caracas municipality of Sucre.

Magglio Ordonez, a multi-millionaire, six-time Major League Baseball All-Star who ran for the government’s PSUV party, won in the city of Puerto La Cruz, Maduro said.

Maduro said Nov. 23 his price-cutting measures should slow inflation and asked government statisticians to “go beyond the technicalities and technology” when calculating the consumer price index.

Inflation, Bolivar

Annual inflation quickened to 54 percent in October, the fastest pace in 16 years. The central bank’s scarcity index, which measures the amount of goods out of stock at any given time, rose to 22.4 percent in the same month as customers searched for milk, antibiotics and tires. Venezuela produces a third of the goods it needs, according to industry association Consecomercio.

The bolivar has fallen 73 percent this year in black market trading to about 64 per dollar, according to, a website that tracks the rate. Venezuelans use the black market when they can’t get access to the central bank’s so-called Cadivi system that sells dollars at the official rate of 6.3 bolivars for priority imports.

“The market may view it as positive that now Maduro has a little more legitimacy with these elections to be able to take economic measures that he needs to do including a devaluation,” Barclays Plc analyst Alejandro Grisanti said today in a telephone interview. “If he makes these adjustments in the coming 60 days, it will be beneficial.”

Bank of America and Barclays both said today that they expect a devaluation of the bolivar in the coming weeks.

Divided Country

“It’s clear that this country doesn’t have an owner,” opposition leader Henrique Capriles said in comments broadcast on the Globovision television network yesterday. “We have a divided country.”

The opposition has increased its capability to mobilize and organize anti-government protests by winning in urban centers across the country, IHS analyst Diego Moya-Ocampos said today in a note, adding that the PSUV victory in the popular vote should guarantee political stability for Maduro’s administration unless social protests and widespread unrest begin to take place in urban areas.

Chavez won 55 percent of the vote in his last presidential run in October 2012. Maduro fell short of that mark in the April election, winning 50.6 percent, while opposition candidate Capriles received 49.1 percent, the narrowest margin in 45 years.

“The government’s communicational hegemony paid off for them in the provinces,” Russ Dallen, head bond trader at Caracas Capital Markets in Miami, said yesterday in an e-mailed response to questions, adding that he thought there would be little policy pragmatism going forward. “The opposition victories in Caracas and Maracaibo -- the centers of the two most popular states -- sets up the groundwork for the organization the opposition will need in its efforts to bring about a recall referendum in 2016.”

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