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Chimichurri's Journal
Posted by Chimichurri in General Discussion (1/22-2007 thru 12/14/2010)
Wed Mar 28th 2007, 10:33 AM
Venezuela, an oil-rich country which has launched a nationalization spree in several key industries, will be scrapped from the Dow Jones Wilshire Global Total Market Index family, a gauge of world equities.
The impending nationalization of companies with a significant amount of foreign ownership has seriously damaged the risk premium for Venezuela, Dow Jones Indexes said in a statement Wednesday.

Venezuelan President Hugo Chavez has pledged to nationalize assets in important industries such as electricity, oil, and mining.
"The country risk, as measured by the Index of Economic Freedom, fell below Dow Jones Wilshire Index's eligibility standards," the statement said.

Six Venezuelan companies will be removed from the Dow Jones Wilshire Global Total Market Index, Dow Jones Wilshire Americas Index, Dow Jones Wilshire Global exUS Index, Dow Jones Wilshire Emerging Markets Index and Dow Jones Wilshire Latin America Index. The changes will go into effect on June 18.

Venezuela, a founding member of the Organization of Petroleum Exporting Countries, was the world's eighth-largest oil exporter in 2005. Its economy has grown rapidly fuelled by huge oil revenues.

Chavez has consolidated his power over the country. He controls Congress, the judiciary and the army. His nationalization campaign and hostility toward the markets has made him very unpopular with foreign investors.


http://www.marketwatch.com/news/story/dow-...

What happens to the companies running the assets Chavez is nationalizing? Do they have to just pack up and leave the country?
Also, are they compensated by Venezuela for investments made?
This is interesting.
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