Get Real – Brazil’s curency is probably near a bottom

January 14, 2014

The Brazilian real has been in fast retreat for the last few months with a tumble that only the South African rand has managed to supersede.  Investor interest in Brazil has waned as financial ratios have deteriorated, the outlook on … Continue reading

Brazil capital markets continue to wilt – no danger of improvement…

December 13, 2013

A couple of recent articles point to the uphill battle faced by Brazilian financial markets. And, unfortunately, there is no respite in sight. Equity markets have been whomped. The key Bovespa indexes continue to stagger and even smaller, retail-oriented companies are … Continue reading

No to complacency on forests. Greenpeace calls for Federal government responsibility

December 4, 2013

twitter-timeline id=408275250996985856 username=johnrumsey1 Marcio Astrini, coordinator of Greenpeace Amazon, says that the latest official numbers for deforestation in Brazil  - which show a disheartening 28% increase  - point to a chronic lack of government oversight and commitment to tackle the … Continue reading

WHARTON Reasons for Amazon optimism: highlights of Roberto Waack interview

November 29, 2013

This is the start to an article that will be fleshed out in coming days. Stay tuned.   There are reasons to be optimistic that the speed of deforestation and degradation of the Brazilian Amazon will continue to slow. That … Continue reading

World Cup: brimming with delays

November 27, 2013

The tragic death of two workers involved in building the stadium to host the World Cup next June in São Paulo has reignited media coverage of delays and cost over-runs. A steady rumble of news has been coming out since … Continue reading

Keep out! Top investor keeps Bovespa exposure low

November 16, 2013

Brazilian investors can be mealy-mouthed on government issues, at least to the media, to avoid poisoning relations with policy makers.  Not so one of Brazil’s most respected investor voices, Luis Stuhlberger. In his latest report, he has underscored the damage … Continue reading

INSTITUTIONAL INVESTOR: Will investors stick with hedge funds?

October 31, 2013

Armínio Fraga knows a thing or two about how to handle a lousy economy. The former emerging-markets portfolio manager at Soros Fund Management and founder, chairman and CIO of 7.4 billion-reais ($3.25 billion), Rio de Janeiro–based investment firm Gávea Investimentos … Continue reading

LIBRA in balance prompts rethink on Petrobras presal role

October 21, 2013

The success of the giant LIBRA field auction was on a knife-edge today as union protests and tepid foreign interest continued to overshadow the $270bn project. Yet, although pessimism over Brazil reigns, some good old common sense looks to be leaking … Continue reading

Marina offers safe haven to Eduardo Campos

October 14, 2013

Buckle up tight. The alliance between Eduardo Campos and Marina Silva may just raise the game at next year’s Brazilian elections but there are so many ifs and buts on the way that a return ticket on the Titanic might … Continue reading

Brave new world: how journalists are relegated to second fiddle

October 10, 2013

The Guardian’s Katharine Viner writes cogently about the far-reaching, painful and exciting changes that are being wrought by digital journalism on the industry .http://www.theguardian.com/commentisfree/2013/oct/09/the-rise-of-the-reader-katharine-viner-an-smith-lecture As she points out this is “a huge conceptual change … a cluster bomb blowing apart who we … Continue reading

The Silva lining for Eduardo Campos?

October 5, 2013

The intriguing alliance of two former, disgruntled Worker’s Party (PT) members could throw a wrench into the delicate calculations for next October’s elections in Brazil. If they build a head of steam, could they lead to a more business-friendly Brazil? … Continue reading

Brazil’s macro policy: are we looking at secular change or a moment of pragmatism?

September 9, 2013

Brazil’s macro policy: are we looking at secular change or a moment of pragmatism?

Brazil: demonstrations crack but fizzle as middle class stays away

Why did large scale demonstrations, expected on Brazil’s independence day on September 7, fail to materialize? São Paulo saw small-scale and low key protests but the spark never seemed to light while Rio de Janeiro and Brasilia witnessed low volume, … Continue reading

Brazilian transport insurance: A dangerous course

August 9, 2013

Around 60 per cent of Brazil’s domestic transportation is done by trucks through highways and roads where thefts and accidents produce  losses of almost R$8 billion . But good risk management can help companies avoid more than 70 per cent of … Continue reading

Brazil demonstrations lead to further spending promises

June 24, 2013

What does the government need to do to bring the wave of demonstrations to a halt? Spray cash at the problem seems to be the answer. That would cause further problems with Brazil facing a rapidly deteriorating financial situation and … Continue reading

WHARTON: Brazilian insurance – innovation stymied

June 18, 2013

The Brazilian insurance market at first blush seems a mouthwatering opportunity and many foreigners have been attracted to start operations there in the last years. But the government’s cautious and oscillating approach to the opening of the sector and market … Continue reading

THE BANKER: Peru’s economic boom fuels banking progress

June 3, 2013

An economic boom coupled with new technologies is allowing Peruvian banks to tap consumer bases that have long been overlooked in the country. But, as the banking market advances at a breakneck speed, there are vulnerabilities to look out for … Continue reading

THE BANKER: How to stop hot money burning Latin America’s growth prospects

May 28, 2013

The World Bank’s chief economist for Latin American and the Caribbean, Augusto de la Torre, discusses ways to increase the value of foreign direct investment in the region and how to manage short-term capital flows. Capital inflows used to have … Continue reading

PROJECT FINANCE MAGAZINE: Alternatives in Brazil, hiatus or on ice?

April 2, 2013

On the surface, Brazil’s alternatives sector looks healthy. Project finance volumes and the number of deals went up substantially last year and wind is today a serious contender at Brazil’s competitive auctions, open to all energy sources. However, the once … Continue reading

Brazil investment summit April 17-18

March 25, 2013

I will be moderating at the session on hedge funds at the Brazil Investment Summit April 17-18 at Hotel Unique. There are going to be speakers from 3i, Gavea, Credit Suisse Hedging Griffo, Redpoint e.Ventures, Advent International, General Atlantic, Bridgewater Associates, H.Stern, … Continue reading

EMERGING MARKETS: ‘Naked’ CDS worry LatAm policymakers

March 17, 2013

The controversial instruments were partly blamed for Greece’s debt problems Latin American officials are looking at ‘naked’ credit default swaps (CDS) – instruments allowing investors to insure against a country’s default without actually owning the country’s bonds – with concern, Emerging … Continue reading

EMERGING MARKETS: Brazilian state expects FDI flood

Brazilian officials see faster growth and a continued flow of foreign direct investment Foreign investment is set to continue to flood into Brazil despite the country’s sharp economic slowdown last year, leading officials told Emerging Markets yesterday. Sergio Gabrielli, secretary … Continue reading

INSTITUTIONAL INVESTOR: Bradesco Asset Management sheds its stody reputation and grows

CEO Joaquim Levy is pushing the No. 3 Brazilian fund manager into credit and equities and closing the gap with rivals Banco do Brasil and Itaú Joaquim Levy likes to compare running Bradesco Asset Management, Brazil’s third largest investment manager, … Continue reading

EMERGING MARKETS: Analysts slam ‘patchwork’ Brazil plan

March 16, 2013

Will Dilma Rousseff’s fund for infrastructure projects be used to help the government avoid increasing debt levels? Investors and analysts yesterday gave a lukewarm reaction to the announcement by Brazilian president Dilma Rousseff of plans to establish a fund for … Continue reading

EMERGING MARKETS: IPO pipeline set to be unblocked

The number of IPOs in Latin America’s two largest markets is set to increase this year; investors watch with interest Investors are turning slightly more bullish on Brazil while Mexico is suffering in the short-term at least thanks to plans … Continue reading

EMERGING MARKETS: Infrastructure will underpin PPP boom

Private public partnerships will play an increasingly important role in meeting infrastructure needs Public private partnerships (PPPs) will grow rapidly in coming years as Latin America moves to redress its weakness in infrastructure while its ambitious plans swamp the public … Continue reading

EMERGING MARKETS: Currency wars and the race to the bottom

March 15, 2013

Developed economies do all they can to devalue their currencies; Latin American economies fight back Since the financial crisis erupted in 2007, many have slammed the Federal Reserve’s policy of “debasing” the dollar by resorting to zero interest rates and … Continue reading

EMERGING MARKETS: Brazil’s risk premium ‘is shrinking’

Brazil’s reforms are beginning to gain investors’ trust; some strategists say the country’s stocks are more attractive Investors are ready to put more money to work in the Brazilian stock market in the wake of a series of investor-friendly moves … Continue reading

EMERGING MARKETS: Latin debt wave may slow down

Issues such as high valuations, financial regulation and threat of rising interest rates could slow debt issuance Appetite for new Latin US dollar debt issuers is expected to remain strong for the next couple of years fuelled by a cocktail … Continue reading

LATIN FINANCE Costa Rica supplment

March 2, 2013

The following are a series of articles on Costa Rica written for Latin Finance. They appeared in a supplement to the main magazine. LF banking LF Capital Markets LF Foreign Direct Investment LF MacroEconomy LF Overview LF President Interview LF tourism

RISK SPECIALIST Balancing Brazil’s insurance

March 1, 2013

The opening of the Brazilian reinsurance market is redefining relations between local and international players. Insurance buyers need to take advantage of on-the-ground knowledge and contacts, but also leverage the reach and expertise of international brokers.  Brazil’s giant insurance and … Continue reading

THE BANKER How will Brazil’s private banks see off multiple challenges?

February 27, 2013

Increased competition from public sector banks, criticism from the president, a weakening economy and aggressive interest rate cuts are combining to make life difficult for Brazil’s private banks. Will an efficiency drive see them emerge leaner, smarter and stronger? The Brazilian banking … Continue reading

WHARTON UNIVERSITY Brazilian infrastructure: an end to the logjam?

February 5, 2013

Brazil is rolling out yet another ambitious infrastructure program. Roads, rail and ports and airports are all within its remit. A new twist is an emphasis on private sector financing and openness to foreign investment. Could projects really take off … Continue reading

OPERATIONAL RISK & REGULATION: Fraud and economic pressure are problems for Brazil’s small banks

January 15, 2013

Seven bank interventions, including major cases of fraud, have rocked Brazil’s small- and medium-sized bank sector. Investors are calling into question everything from their business model and costs of funding through to corporate governance standards, the efficacy of their accountants … Continue reading

LATIN FINANCE Infrastructure investment: into the void

January 5, 2013

Commercial bank sources of funding may have retreated, but a range of other capital providers is rapidly taking their place for financing infrastructure Securing long-term capital for project finance has never been the most straightforward of tasks – especially so … Continue reading

LATIN FINANCE: Itaú Banking Survey highlights Colombian promise and government worries for Brazil

November 26, 2012

One notable result of the inaugural Itaú 2013 Investor Outlook for the Latin American Banking Sector is the sense of assuredness investors have expressed for the industry – at a time of considerable broader anxiety over the future of global banking. The picture that emerges from … Continue reading

The ins and outs of Brazilian investment banks

November 21, 2012

UBS has finally won its long-delayed banking license in Brazil. Champagne all around? Not quite. Most international investment banks are in headlong retreat in the Brazilian market. Raymond James just announced it is closing its research arm in Brazil. It … Continue reading

Brazil’s muddled reinsurance market

November 6, 2012

The reinsurance market in Brazil is going through profound, but not necessarily positive, change as the regulator seeks to maintain a hefty share for locals. The opening of Brazil’s reinsurance market has been slow and uneven. In 2008, private competition … Continue reading

LATIN FINANCE: Redemption Road (Brazilian infrastructure)

November 2, 2012

Brazil’s bold infrastructure push has been heralded as a game changer. Investors, however, may balk at low yields – and risks that remain hard to evaluate Much fanfare has accompanied Brazil’s announcement of an ambitious $133 billion reais ($66 billion) infrastructure investment program. A new law … Continue reading

Online insurance: everything to play for

November 1, 2012

This is my second short on insurance. Brazil’s online market looks like it could be fillet mignon for foreign insurers who understand this segment and are willing to deal with Brazil’s labyrinthine bureaucracy. First, the retail insurance market is growing … Continue reading

Franco-Brazil tech investment is innovative: early stage and ex-Sampa/Rio

October 29, 2012

Private equity-style investments continue to pile into Brazil. One new deal suggests there’s appetite for much smaller, off-the-radar screen kinds of investments. The investment by French Truffle Capital in Confrapar, more of a seed capital player than a fully-fledged private … Continue reading

Go-slow: Brazil’s road and rail improvements drag

October 25, 2012

Brazil’s recently-announced R$133bn road and rail improvement programme will need to overcome a track record of chronic under performance to win investor trust. The news flow on projects to date is not helping. The  Federal government’s Sistema de Administração Financeira … Continue reading

Vale’s retreat from Guinea venture

October 24, 2012

Reuters carried a story quoting an analyst who says Vale is prioritizing Brazilian investments over Guinean projects as it gains an environmental license to develop Serra Sul. The real reason its getting cold feed on the giant Simandou mines may … Continue reading

Brazilian asset industry blooms on low rates

October 19, 2012

Separated by less than three miles of affluent suburbs, the two main business areas in São Paulo represent two faces of the city’s businesses. Avenida Paulista once housed the frenchified mansions of the coffee barons who put the city on … Continue reading

FINANCIAL TIMES: Chile seeks bigger slice of the funds pie

São Paulo and Santiago may seem unlikely rivals for the position of Latin America’s investment management hub. After all, Brazil has a $1tn mutual fund management industry and a 190m-strong population, whereas Chile has a respective $33bn and 17m people. … Continue reading

Investor lambasts Brazilian energy concessions

October 16, 2012

If Brazil wants to create a love affair with its infrastructure programme and bring in lots of foreign lolly, it’s going about it the wrong way. Valor published a hard-hitting interview from a key foreign investor who slammed the energy … Continue reading

WHARTON UNIVERSITY: Brazil’s consumer credit markets: wobble but no fall

October 10, 2012

Brazil is undergoing an historic drop in interest rates that is revolutionizing access by corporates and consumers to loans. The spigot has been turned on. But is the flow sustainable or is a flood looming? Even as the developed world … Continue reading

Temperature rising in healthcare consolidation

October 9, 2012

The announcement that UnitedHealth is buying Amil Participações (October 8) goes someway to fulfilling predictions of a wave of M&A in the fragmented and fast-growing sector. Head of Bradesco Asset Management and former secretary for the Treasury, Joaquim Levy, expects … Continue reading

INSTITUTIONAL INVESTOR: Brazil’s Hedge Funds Crank Up the Risk Dial

October 4, 2012

as rates in Brazil plunge, the country’s hedge fund managers are buying riskier assets. But are investors ready? Brazilian hedge fund managers historically haven’t had to work that hard to earn good returns. They have used the country’s sky-high interest … Continue reading

THE BANKER: Brazil’s small banks face big decisions

October 2, 2012

The small and medium-sized banks of Brazil have faced a series of challenges in recent years, from fraud scandals to adapting to international accounting standards. In light of this, the country’s government has attempted to offer some sort of salvation … Continue reading

Fund managers scotch idea of big financial tax rises

The US QE3 programme has been rattling Brazil’s cage (again) with fears of renewed upward pressure on the real. That has been sparking questions over the government’s use of the IOF tax and whether it will be boosted or extended … Continue reading

THE BANKER: São Paulo and Santiago: the David and Goliath of Latin America’s asset management industry

October 1, 2012

Both Santiago and São Paulo are making significant strides towards becoming Latin America’s foremost asset management hub. The Chilean capital has extensive experience, while the Brazilian metropolis already boasts the sixth largest asset management industry in the world. However, both … Continue reading

PROFIT-LOSS: Latin governments battle upward pressure on FX

September 25, 2012

Most Latin currencies are nudging up again on domestic consumption and soaring soft commodity prices, which are tempering the effect of weaker hard commodities. The big unknown is government intervention, which is stymying the rise of both the BRL and … Continue reading

Brazil’s macro policy: are we looking at secular change or a moment of pragmatism?

Brazilian financial daily Valor Economico carried an interesting debate today (September 25) between eight leading economists on whether Brazil has thrown over its hallowed ‘tripod’ (inflation targeting; a floating exchange rate; and maintaining a primary surplus). The very fact that … Continue reading

Asset managers: vive la révolution

September 18, 2012

Brazilian asset managers are embracing change and diversifying away from overnight rates. Yes, we’ve heard it all before but this time it could really be true. Traditionally, Brazil’s asset management industry has been dull. Sky-high interest rates made investors risk-averse. … Continue reading

Brazil gets serious on fixing its infrastructure: about time too.

September 11, 2012

Just how enthusiastic are Brazilian bankers about Brazil’s $66 billion infrastructure program? It’s certainly ambitious. The existing package envisages 10,000 kilometers of new railways together with building or upgrading 7,500 kilometers of roads. Moreover, there is more to come: a … Continue reading

LATIN FINANCE: Spanish banks, between a rock and a hard place

September 10, 2012

Spanish banks on paper remain firmly committed to their Latin businesses – their best hope for future profits. But their troubles at home could yet force them into a radical restructuring.  Most market watchers see the model of Spanish parent … Continue reading

Small banks: evolve or die

September 4, 2012

What do the twists and turns of the Central Bank’s attempts to flog Banco Cruzeiro do Sul, tell us about the health of Brazil’s mid- and small banks? The news is not altogether encouraging for those Brazilians banks that want … Continue reading

Mayor for São Paulo Celso …. who?

August 27, 2012

Russomano. That Russomano is the name being bandied around as the next mayor of São Paulo is a major upset for politics as usual. São Paulo is by far the most important municipality and a benchmark for the wider state … Continue reading

LATIN FINANCE: Fund managers signal return to Brazil

August 23, 2012

A major shift is taking place among Latin investors. Leading fund managers are starting to reallocate funds to the languishing Brazilian stock market, taking profits out of the Mexican bolsa. The Bovespa is looking good value and an expected GDP … Continue reading

Infrastructure and the private sector: infra penny, infra pound.

August 20, 2012

A big hurrah has gone up for Dilma Rousseff and her decision to expand spending and get the private sector involved in Brazilian infrastructure. The news is heartening and the figures impressive with R$140bn (nearly $67bn) being talked about. But … Continue reading

Olympics costs—prevarication and procrastination

August 1, 2012

Brazil has not been shy in splashing out to showcase the Rio Olympics in London. The country took over part of the huge mansion Somerset House which it used to host exhibitions — including videos of a futurisitc Rio juxtaposed … Continue reading

OPERATIONAL RISK: Latin banks plug gaps in reputational risk

July 30, 2012

There are numerous stories of Latin banks facing runs after their reputation crashed, often causing ripples that spread across the sector. Just last year, Brazil’s mid-sized Banco PanAmericano was investigated by the Central Bank for accounting irregularities and forced into … Continue reading

Brazilian banks face multiple constraints

July 14, 2012

Global uncertainty and a slowing domestic economy; a government that is breathing down their neck to reduce spreads; and higher non-performing loans have been laying waste to bank share prices in Brazil. The Brazilian economy has been trending down for … Continue reading

LATIN FINANCE: Brazilian banking, end of the golden age

July 1, 2012

The outlook for Brazilian banks and their shareholders has darkened. Crude government measures to stimulate credit while delinquencies are high look dangerous and the consumer story that has supported Brazil so long looks shakier than ever as GDP expectations shrivel … Continue reading

PROJECT FINANCE: Brazilian airports open financing crack for banks

June 23, 2012

The successful start to Brazil’s ground-breaking airport privatization process has been marred for commercial banks by limited opportunities. More bank funding could be drawn in because the BNDES looks stretched, interest rates are falling, and the auction process may be … Continue reading

KNOWLEDGE@WHARTON: Brazil and its growing labor pains

June 15, 2012

Brazil is facing a paradox. Rapid wage rises and record low unemployment are boosting the country’s middle class and stimulating a consumer boom. But these same wage rises are a major factor in the damage being wrought to manufacturing. A … Continue reading

PROFIT-LOSS: Brazil transfers know-how to Chile

May 23, 2012

Brazil’s exchange, BM&FBOVESPA, and the Santiago Stock Exchange recently signed an agreement to develop Chile’s derivatives market that will lead to more efficient practices, reducing costs and risk. The technology and know-how deal is part of a far-reaching drive for … Continue reading

Homebuilders take a wrecking ball to the Bovespa

Another bad year for the Brazilian market rolls on with the Bovespa slithering down to test 55,000, a scenario made worse for foreign investors by the disappearing real which continues its long journey into the night against the US dollar … Continue reading

PROFIT-LOSS: Brazil gets a grip on its currency

May 19, 2012

“We have a currency war,” shrieked Brazilian finance minister Guido Mantega in March. A ‘tsunami’ of dollars that had washed up on Brazilian shores has been caused by “a depreciation in the value of the currencies of developed countries, thus … Continue reading

EMERGING MARKETS: Deleveraging haunts Central Europe

May 17, 2012

Deleveraging is still very much impacting credit throughout the region which is proving especially vulnerable as most of the banks are foreign owned and retrenching to home markets, complain bankers and economists. Erik Berglof, chief economist at the EBRD, notes … Continue reading

Credit crunch Europe’s lessons for Brazil

May 16, 2012

Reporting from the European Bank for Reconstruction and Development, I am struck by how vulnerable Central and Eastern Europe is to a credit meltdown as western European banks ‘deleverage’ and retreat home, very much the issue of the day. Anaemic … Continue reading

LATIN FINANCE: Brazilian asset managers: say goodbye to the easy days

May 9, 2012

At the start of 2011, Alexandre de Zagottis, CEO at Advis Investimentos and his two co-heads of investment, Eduardo Bodra and Julio Marote, saw an opportunity to buy options that would come into the money if Brazil reduced rates. This … Continue reading

The Central Bank’s murky mandate

Just what is the Central Bank playing at? The fashionable question of the day in Brazil’s economist circles is whether the Bank has tossed in a dash of GDP growth to its inflation-targeting menu. The latest rate cut leaves the … Continue reading

Central Bank opens doors to further cuts

May 4, 2012

The Brazilian government is scrambling its monetary policy to fend off further falls in industrial production and to boost flagging GDP. In the latest move, the government has cut obligatory minimum rates in savings accounts. There are likely to be … Continue reading

Albertis overtakes OHL on Brazilian road toll deal

April 25, 2012

The 865m euro cash and share deal by Albertis Infraestructuras to buy OHL’s Chilean and Brazilian network has been warmly greeted by agencies and debt managers. It gives the former a big slug of the Brazilian industry, which should position … Continue reading

THE BANKER (FINANCIAL TIMES): The battle for LatAm riches

Fund managers from across the globe are studying Latin America, once the Cinderella of private banking, and are liking what they see. The region’s wealthy are shaking off their reputation for producing dodgy fortunes and salting them away in Miami … Continue reading

Brazil’s first IPO: a car wreck

April 20, 2012

So Brazil’s year-long IPO hiatus is finally over. Sadly, the deal for São Paulo-based car hire company Companhia de Locação das Américas just squeaked through. Enthusiasm fizzled and shares were priced at R$9 per share way below the R$11-14 indicative … Continue reading

Brazilian industry: a death foretold

April 17, 2012

You can’t pick up a Brazilian newspaper – even a popular one – these days without reading about the imminent demise of domestic industry. Is this scaremongering by industry bigwigs with the aim of squeezing more concessions out of the … Continue reading

More in store on the currency war

April 11, 2012

Dilma Rousseff has been banging the war drums over the flood of cheap money from developed markets in her trip to the US: the reverberations have already reached the ears of Finance Minister Guido Mantega. He seemed to float the … Continue reading

Watch those profits tumble?

April 9, 2012

Sleepless nights are in store for bankers at Brazil’s leading private banks since the country’s powerful public banks promised to take an axe to lending rates last week. Rates could come down by as much as 88% in some cases, … Continue reading

Brazil: Another day, another industrial stimulus package.

April 4, 2012

Yet more favours are being showered on the national development bank, BNDES. The bank is already the chief channel for granting subsidized credit (preferred companies only need apply). It is now becoming the central plank in the government’s bid to … Continue reading

FIFA spat helps cover up out-of-control Cup budget

April 3, 2012

The Brazilian media is following every twist and turn of a colourful spat between FIFA and the Brazilian government. That is masking some frightening (and not updated) numbers on costs for the Cup with construction firms using the negative publicity … Continue reading

Government squirms as development bank put under the microscope

March 30, 2012

Skewed financial arrangements between the government and Brazil’s powerful state development bank are big contributors to distortions in policy making and Brazil’s loss of competitiveness. That’s the controversial finding of a senior economist who is working for the IDB and … Continue reading

Forestry code farce: falling foul of factions

March 27, 2012

Brazil’s attempts to modernize its forestry code with protection for river banks and set-aside areas are dying in the quicksand of Brasilia’s messy compromise politics. Pressure from the powerful ruralistas, those supporting the expansion of Brazil’s agribusiness, have already watered … Continue reading

OPERATIONAL RISK & REGULATION: Brazil announces oprisk timeframe, stirs polemic

March 22, 2012

Brazilian risk experts are divided over the feasibility of the start date for applying for advanced measurement approaches (AMA) in operational risk put out by the Central Bank of Brazil. Some argue that the timeframe is too tight, falls too … Continue reading

Chevron oil spill whips up political firestorm

March 21, 2012

Chevron is witnessing the wrath of the Brazilian government after its second oil spill with criminal prosecutions likely against senior Chevron staff who have been barred from leaving the country. The company was responsible for about a 2,400 barrels leak … Continue reading

EMERGING MARKETS: World Bank Latin VP supports capital controls

March 19, 2012

Trade protectionism should be avoided, but there is space for macro prudential measures when capital flows are creating asset bubbles or distorting FX markets, says Hasan Tuluy, the new vice-president for Latin America and the Caribbean at the World Bank. … Continue reading

EMERGING MARKETS: LatAm biorenewables witness investment jump

The continued rise in the price of gasoline to comfortably more than $100 per barrel, US government energy security concerns, and a host of new technologies are coming together to boost investments in biorenewables massively, with more than $1bn in … Continue reading

EMERGING MARKETS. Infrastructure finance: Road kill

A retreat by foreign commercial lenders has left a funding gap for Latin American infrastructure projects that’s proving hard to fill The Latin cross-border project finance market has been taking a thumping. Many commercial banks, especially European ones, are unable … Continue reading

EMERGING MARKETS: Investor clamor for Latin debt hits risk-reward

March 17, 2012

Latin debt capital markets are in party mode with huge investor demand. That has caused spreads to tumble by one third and is sucking in a host of lesser-known names, with this week seeing a blow-out Colombian corporate deal and … Continue reading

Montevideo 2: economic boom masks big macro split

March 16, 2012

The Inter-American Development Bank meetings are all about chummy Latin solidarity and business opportunities, entwined with high-falluting discussions on the region’s prospects. They usually come with a slightly positive spin thanks to the prospect of all the business available from … Continue reading

Brazil needs more LatAm presence to gain global heft

March 13, 2012

Brazilian University and think tank Fundação Getulio Vargas produces some interesting thought pieces in its monthly English-language magazine, the unimaginatively entitled “The Brazilian Economy”. Most recently, the magazine has been questioning how Brazil defines itself in Latin America and the … Continue reading

Watch out, they might be calling you *!@# on Facebook.

March 7, 2012

Yesterday, I chaired a conference on enterprise risk management in São Paulo. Risk is becoming an altogether sexier subject as it dallies with digital and social networks. Firms are trying to figure out how they can seek to influence the … Continue reading

Currency wars, the sequel

March 5, 2012

Brazil is back on the currency warpath after a truce with markets. It’s all about the relentless rise of the real. Over the last three months, it has trended up from the 1.85 mark against the greenback to around 1.72 … Continue reading

BRAZIL GOVERNANCE INTERVIEW: PEDRO BASTOS, CEO, HSBC GLOBAL ASSET MANAGEMENT, BRAZIL

Pedro Bastos joined HSBC Global Asset Management in Brazil in 2006 as CEO in which time he has helped the company build assets to $40b and the firm has launched a wide range of funds, from fully fledged hedge fund … Continue reading

KNOWLEDGE@WHARTON U.S. Ethanol Move Promises Long-Term Boost to Brazil

March 2, 2012

The elimination of a series of U.S. subsidies and tariffs on imported ethanol represented a long sought-after victory for Brazil, and one that was expected to open up a major market for the South American country’s sugar industry. But several … Continue reading

Project finance markets gets unstuck

March 1, 2012

I’ve recently been writing about the difficulties in getting deals done in the cross-border project finance market. The exodus of many key European banks in the space because of a lack of cheap US dollar liquidity has already caused a … Continue reading

Carnival time in Brazil’s job market

February 24, 2012

The battle to stimulate economies and bring life back to a moribund jobs market across the UK and Europe is a far cry from Brazil’s red hot jobs market. Unemployment keeps falling and has reached a low of 5.5%, impressive … Continue reading

Bank profits grind down as bankruptcies jump in Brazil

February 16, 2012

The recent slew of Brazilian bank results doesn’t make for light reading. Valor newspaper reports that profits at the large banks fell by more than 9% in the last quarter year-on-year. What’s been going wrong? One of the principal villains … Continue reading

Foreign appetite for PE returns in force

February 13, 2012

Brazilian private equity firms are gearing up, pointing to renewed confidence after what has been a tough year. Many PE managers are quietly saying that the industry is saturated with funds and that closing deals with owners has been tough, … Continue reading

PROJECT FINANCE: Latin Port sector rides through turbulent times

Latin port projects have proven popular despite the choppy times. They long-term make sense as the region faces massive bottlenecks and  governments have embraced port privatization while natural resource companies are scrambling to build their own outlets. Ports are rich … Continue reading

Ethanol: hitting rock bottom before things get sweeter

February 10, 2012

Petrobras’ weak fourth quarter results – down over 50% year-on-year – highlight just how bad things have become in ethanol in Brazil. A surge in domestic petroleum sales at prices dictated by the government hurt the bottom line of the … Continue reading

Banks race to bring Brazilian IPOs to market

February 8, 2012

The moribund Brazilian IPO market is kicking off again. The real is up, the Bovespa is reaching 66,000 and foreign investors, long the driver of the IPO market, have been coming off the sidelines to participate in the currency and … Continue reading

Brazilian infrastructure: where are the margins?

February 6, 2012

The latest sign of the bottomless interest in Brazilian infrastructure assets has arrived with a dizzyingly high set of bids for Brazilian airports. The winning bid to run São Paulo’s infamously over-crowded Guarulhos airport, the nation’s busiest, was won by … Continue reading

PROFIT & LOSS: Latin trade partners roll out FX platform

February 1, 2012

At least three Latin nations are forging ahead with closer links via a common FX trading platform in a move that reinforces their growing financial market and trade connections. The question remains just how fast the take-up of the FX … Continue reading

Brazilian overseas debt issues set to jump

January 23, 2012

Brazil Confidential (Financial Times): Recruitment survey

January 13, 2012

Recruiters forecast double-digit growth in pay, despite growing reluctance from multinationals. Brazilian executive salaries, already among the highest in the world. are likely to continue to grow quickly this year. Eight senior head-hunters surveyed by Brazil Confidential forecast that average … Continue reading

Brazil: is decoupling possible?

November 28, 2011

In the early days of the 2008 crisis, the idea of decoupling between emerging markets and the developed world was in vogue. It turned out to be no more than wishful thinking. The collapse of Lehman Brothers precipitated a downturn … Continue reading

FINANCIAL TIMES/THE BANKER. Emerging Latin Financial Centres

September 30, 2011

Latin American financial centres are finding a golden opportunity in the years of crisis. A global investing tilt towards emerging markets and the rush by developed market companies to diversify their business into high-growth markets is breathing life into the … Continue reading

FINANCIAL TIMES/BRAZIL CONFIDENTIAL: Santa Catarina: revitalising and modernising

September 15, 2011

Industry in Santa Catarina is under threat from Chinese competition but the state is capitalising upon itshighly-educated population to build a vibrant IT sector. Small and tidy Santa Catarina in some ways bears closer resemblance to the Germanic countries, to … Continue reading

FINANCIAL TIMES/BRAZIL CONFIDENTIAL: Maranhao: giant projects may overturn poor reputation

September 5, 2011

The north-eastern state is among Brazil’s least developed, but investments in new oil and gas finds and a burgeoning agricultural sector could give it a boost in the arm. Maranhão vies with fellow north-eastern states Alagoas and Piauí for the … Continue reading

FINANCIAL TIMES/BRAZIL CONFIDENTIAL: Making hay from the agro boom

September 2, 2011

Abundant rainfall, large aquifers and extensive flat land outside of the legal Amazon are helping Piauí’s agricultural sector bear fruit. Piauí has tended to make news for all the wrong reasons: it most usually comes to public attention as the … Continue reading

FINANCIAL TIMES: Conservative hiring erects barriers to Brazil jobs

July 15, 2011

In Morde & Assopra, a hit soap opera in Brazil, Keiko is a Brazilian woman of Japanese descent who returns to Brazil in search of work. It might be a fictional plot but it is very deeply rooted in reality. … Continue reading

FINANCIAL TIMES-BRAZIL CONFIDENTIAL. Para seeks to benefit from mining investment

June 23, 2011

Pará seeks to benefit from mining investment In spite of its geographical spread, Pará is an economic minnow that is just waking up to its potential as a mining and agricultural powerhouse. There are multi-billion dollar plans to exploit the … Continue reading

Brazilian airport concessions: all out of time?

May 23, 2011

A series of welcome announcements by the Rousseff government shows that it is getting serious with airport concessions. First, the government has appointed the capable Wagner Bittencourt in a newly-created position as secretary of civil aviation; he is likely to … Continue reading

Brazilian labour markets: exuding confidence on executive salaries

April 18, 2011

A slowing economy and rising inflation might lead you to believe that Brazil’s labour markets for executives would be taking a breather. Multinationals should surely be re-assessing expansion plans in a market where executives receive some of the highest salaries … Continue reading

FINANCIAL TIMES/BRAZIL CONFIDENTIAL: Fund strategies (MSquare and Maua Sekular)

April 17, 2011

MSquare has been top slicing its bets on the equity markets, taking down its invested portion from 90% in the last quarter of last year to some 70% today. After run-ups in share prices, Mr Mizne believes that it is … Continue reading

BRAZIL CONFIDENTIAL-FINANCIAL TIMES Smaller banks face tougher times

Last year, mid-sized Brazilian banks were doing well. Wholesale markets were rapidly recovering post crisis and provisions from the Central Bank to stimulate credit were still firmly in place. Today, there are signs of severe strain: the discovery of fraudulent … Continue reading

ABSOLUTE RETURN-ALPHA MAGAZINE Brazilian hedge funds: Pushing Brazil forward

March 31, 2011

After surging in 2009, the country’s managers stalled after developing the world’s sixth-largest hedge fund industry. In an effort to restart, they are trying to move beyond their traditional offerings When U.S. citizen Michelle Noyes joined BRZ Asset Management in … Continue reading

Debt issuers crowd into local markets

March 28, 2011

Enthusiasm for local-currency debt remains undimmed by events in Japan and the Middle East Favourable market conditions and international investor demand for local currency debt has not been derailed by events in Japan and the Middle East, investors said this … Continue reading

IDB slashes exposure to securitized assets

The Inter-American Development Bank has cut exposure to asset- and mortgage-backed securities by more than half since the financial crisis, according to CFO Edward Bartholomew   The IDB has slashed exposure to securitized assets and put stringent restrictions on investments … Continue reading

Brazil defends macro prudential policies

Controversial capital controls are both necessary and effective in taming rising inflation while preventing a surge in capital inflows, Brazil’s deputy central bank governor told Emerging Markets   The Central Bank of Brazil forcefully defended its position on macro prudential … Continue reading

Volatile markets polarize views on capital controls

March 27, 2011

As Brazil ponders further restrictions on inflows, economists and policymakers remain divided on their effectiveness A debate among financial leaders on capital controls stepped up a notch yesterday as Brazil, which has resorted to them since last autumn, was reported … Continue reading

ECLAC chief calls for US-LatAm trade boost

Alicia Bárcena told Emerging Markets that arresting the decline of US trade with Latin America should be a priority   Foreign direct investment (FDI) in the Latin region jumped back to $110-120 billion last year from $78 billion in 2009, … Continue reading

TIMES RACONTEUR: The Curitiba transport system

Curitiba is a prime example of how a city can address the challenges of suddenly increasing burdens on its urban systems. A wave of internal migration from the poor, rural northeast in the 1950s and 60s caught authorities unawares. The … Continue reading

Investors shrug off bad news, focus on short-term returns

March 26, 2011

North and South American equity markets soared last week, despite concerns over inflation, Japan, US interest rates and capital controls Investors shrugged off bad news, pushing US and Brazilian equity markets up this week. Equity markets steamrolled over events including … Continue reading

Latin IPO rush as volatility set for comeback

Latin american companies are rushing to list ahead of a predicted rate rise in the US in late 2011 or 2012 An uptick in issuance by Latin America’s companies could be on the way – signalled by Friday’s announcement that … Continue reading

IDB approvals tightening aims to improve lending

March 23, 2011

The IDB’s new executive vice-president, Julie Katzman, says that deals are being sent back for more rigorous evaluation under new approval criteria An overhaul of the approval criteria for IDB loans, put in place by the board in February, has … Continue reading

Brazilian banks get tougher on credit.

March 14, 2011

Brazilian banks are getting sharply more cautious on credit and drawing in their horns. Surprisingly, they seem to have even turned more cautious on the safest segments such as payroll deducted loans, which has been such a driver for specialist … Continue reading

FINANCIAL TIMES/BRAZIL CONFIDENTIAL: Private equity: Full steam ahead in Pernambuco

March 12, 2011

The historic centre of Recife once seemed doomed. The city’s raison d’etre – its port – was supplanted in the 1970s by the development of new deepwater facilities at Suape to the south. And over the next couple of decades … Continue reading

Brazil’s equity market: another run for the exit doors?

March 11, 2011

There’s an area of nervousness surrounding the direction of the Bovespa. After the phenomenal run-up in 2009 when dollar-based investors gained close to 150%, last year maked a significant slow down with dollar returns of some 5%. This year, the … Continue reading

FINANCIAL TIMES/BRAZIL CONFIDENTIAL: Goias, private equity

March 10, 2011

In 2001, when Jacinto Borges was recruited to manage Tend Tudo, a small Goiania-based do-it-yourself store, the business looked set to become the latest failure in Brazil’s 1990s experiment with private equity. To read the rest of this text, please … Continue reading

FINANCIAL TIMES/BRAZIL CONFIDENTIAL: Fund strategies (Investidor Profissional and Nest Investimentos)

Rising prices are a concern for this issue’s two equity managers: Francisco Meirelles de Andrade of Sao Paulo-based Nest Investimentos, and Elsen Carvalho of Investidor Profissional in Rio de Janeiro. The two are pursuing contrasting strategies with soft commodities topping Nest’s … Continue reading

What next for Brazilian wage inflation?

March 9, 2011

One of the big questions facing policy makers and a challenge for Dilma Rousseff is Brazil’s red hot employment sector. Unemployment is at record lows of 6% and the informal sector is rapidly shrinking although still close to 50% of … Continue reading

EMERGING MARKETS. Banking regulation: Standard deviation

March 4, 2011

Decades of regulatory conservatism mean that Latin American banks should have few problems hitting Basel III requirements. But credit risks remain   Latin bankers say they are generally well prepared for the capital provisions of Basel III and its precursor … Continue reading

FINANCIAL TIMES/BRAZIL CONFIDENTIAL: Consumer debt

February 17, 2011

Low-income groups feel the burden of debt Central bank moves to cool lending come as many Brazilians are feeling the pinch of paying by instalments. Cristina Campos is caught in a vicious circle. The 58-year-old Sao Paulo school teacher owns … Continue reading

FINANCIAL TIMES/BRAZIL CONFIDENTIAL: Fund strategies

Both Constellation Asset Management and BRZ Investimentos – the two Sao Paulo-based managers we review in this issue – have taken a defensive stance recently, but it has led them to very different investment decisions. To read the rest of … Continue reading

FINANCIAL TIMES/BRAZIL CONFIDENTIAL: Fund strategies (Polo and BNY)

February 3, 2011

At 6%, BNY Mellon ARX’s forecast for 2011 inflation is at the top end of the range. So, perhaps understandably, Alexander Gorra, the fund’s senior strategist, has taken a defensive stance in recent months: “In the fourth quarter, we became … Continue reading

FINANCIAL TIMES/BRAZIL CONFIDENTIAL: Private equity in Minas Gerais

As a Belo Horizonte-based professor of economics, Clelio Campolina is well aware of the shortcomings of the business culture of Minas Gerais, Brazil’s second most populous and economically important state. To read the rest of this text, please go to … Continue reading

OPERATIONAL RISK & REGULATION: Brazilian banks and governance

A FAMILIAR FOE Brazil’s banks are generally family-owned, so they’ve escaped the pressure to meet shareholder demands for short-term gain. But if governance is to improve in the country, this entrenched family culture will need to be opened up to … Continue reading

New Brazilian government closes door for foreigners in mining

January 31, 2011

Brazilian mining Continue reading

PROJECT FINANCE Toll roads: Latin concessions scaled down

January 3, 2011

Latin concessions scaled down First they tried sweetening them, but now Latin governments are trying to scale back infrastructure programmes altogether. Only the most modest PPP deals will attract a sponsor and lender following. John Rumsey reports Last year, governments … Continue reading

Private equity takes off, pushing valuations.

November 30, 2010

New private equity managers and money are pouring into Brazil with locals excited by the level of interest and forecasting greater inflows through next year. Many foreign firms have launched in the country this year thanks to economic growth and … Continue reading

THE TIMES/RACONTEUR: Brazil: Greek sports and Greek gifts.

November 26, 2010

When “King” Pelé turned 70 on October 21, his old team Santos decided to stage a valedictory match for its prodigal son. All was going swimmingly at the break with the home team enjoying a two-nil lead. But then the … Continue reading

LATIN FINANCE: BOUTIQUE BANKS PROLIFERATE IN BRAZIL

The crop of boutiques that sprang up from the bulge bracket wreckage faces fresh competition. They will need relationships, international connections and a proper structure to survive. Boutique banks popped up in post-crisis Brazil like mushrooms after the rain. G5 … Continue reading

Consumer finance: installment war to end?

November 23, 2010

There are signs that the trend for ever more generous consumer payments terms may be slowing or ever reversing in Brazil. Shorter installments are going to bring some rationality to competition in the sector as well as providing a much-needed helping hand … Continue reading

THE BANKER: Uruguay’s banks being crippled by caution

November 2, 2010

As governments in the Western world attempt to implement more conservative regulation within their financial markets, banks in Uruguay are stagnating because of the country’s overcautious economic approach over the past decade. Pint-sized Uruguay has successfully cleansed its banking system … Continue reading

Brazil and currency skirmishes

October 18, 2010

Pressure is mounting on the Brazilian government to “do something more” about the real. The Ministry of Finance has already doubled its financial transaction tax (IOF) to 4% and is mulling a number of other measures: these include further increases … Continue reading

THE BANKER Brazil: Riding the commodity super cycle

October 6, 2010

In September, Brazilian�s state-owned oil and gas champion Petrobras successfully raised $67 billion, the world�s largest ever offering by a wide margin. Foreigners flocked to buy shares, and the offer was so great it drove up the currency. That�s a … Continue reading

Uruguay makes its mark overseas

Serra and Rousseff: Greens versus evangelicals

October 5, 2010

The surprise showing by the Green Party under Marina Silva is likely to lead only to the lightest shade of greening by Rousseff and Serra. Rather, the two candidates will need to woo the evangelical Christian vote, which is focused … Continue reading

Brazilian banking: Spoilt for choice

October 1, 2010

Brazilian bank are living a golden era. A consumer boom and high spreads on loans are lifting profits and rushing leaders up the ranks of the top global banks. A more thrusting, international corporate sector is luring Brazilian banks overseas … Continue reading

Higher investor taxes in Brazil?

Whispers that the Minister of Finance, Guido Mantega, is planning to raise the IOF tax (on financial transactions) once the elections are done and dusted are gaining traction. Mantega has been using some pretty strong language of late, using the … Continue reading

Brazil builds HFT platforms but will they come?

Phenomenal trading growth has generated enough liquidity on the mercantile and futures exchange, BM&F, and stock market, Bovespa, to allow quants to flourish and even the first high frequency trading strategies to sprout. The exchange is investing heavily to encourage … Continue reading

Petrobras gets into deep water

September 20, 2010

The clock is ticking on the giant share offering of Petrobras which could raise as much as $78BN on Thursday. The stock has rallied in recent days thanks to increases in oil prices. Even so, it is still down 25% … Continue reading

Brazilian corporate governance body gets active

September 15, 2010

I attended the conference in São Paulo of Brazil’s CODIM, another spaghetti acronym, this time for Market Information Disclosure Guidance Committee (Comitê de Orientação para Divlugação de Informações ao Mercado), aimed at IR pros. CODIM is celebrating five years and … Continue reading

Brazilian meatpackers

September 12, 2010

A lot of attention has recently been focused on Brazilian “protein providers”, a group of rapidly internationalising agro businesses that combine humble roots with big ambitions to supply meats to the world. Brazil’s plentiful arable land and the growing efficiency … Continue reading

Banco do Brasil Flexes Muscles

September 4, 2010

Latin America’s biggest bank, Banco do Brasil, is riding high with new lines of international and capital markets business. However, elections may be a spanner in the works. Talk about Brazilian banks to investors, bankers and the banking industry and … Continue reading

Latin Ambition: Solvency 2

September 2, 2010

Latin American economic powerhouses Brazil and Mexico are introducing new solvency regulations in their fast-growing insurance markets. But while Mexico has gone straight for a Solvency II -type approach, Brazil is emphasising gradualism and will not make the jump to … Continue reading

Petrobras: A tale of two halves

September 1, 2010

Pre-salt finds in Brazil offer a once-in-a-century opportunity for the country to boost its coffers and tackle pressing social problems. If balanced with interests from other stakeholders, the oil will indeed be transformational. However, the mere thought of the money … Continue reading

Brazilian meatpacking: more than it can chew

After two years of breakneck growth and consolidation funded largely by the government, Brazilian meatpackers are protein providers to the world. Can they also become global brands? Two years ago the Brazilian meatpacking industry was a dog’s dinner. There were … Continue reading

Brazil: Real change in preparation for Basel 2

August 1, 2010

Brazil is justifiably proud of the progress it had made in the implementation of Basel II, due for completion in 2013. However, a sudden increase in lending is raising a host of data issues and diverting management’s attention away from … Continue reading

Brazilian Asset Managers Scrap for Mandates

July 13, 2010

As Brazil’s pension fund industry takes off, independent managers find it hard to wrestle assets from well entrenched retail banks. Most funds pursue conservative mandates. The Brazilian pension fund industry may have had a late start in life, but it … Continue reading

Colombia: Banks are competing to fund infrastructure investment

May 5, 2010

Brazil Private Equity Takes One Step Forward

May 1, 2010

After taking a few steps back during the financial crisis, Brazilian private equity is reanimating. However botched IPOs present challenges and there are fundraising blocks. After a sluggish 2009, private equity (PE) fund managers are painting a picture of cautious … Continue reading

Brazilian Billionaire Stumbles: The OGX IPO

April 15, 2010

To the surprise of many, OSX Brasil SA, the Brazilian shipbuilding company controlled by billionaire Eike Batista, slashed the size and price of its initial public offering in March, which was expected to be among the world’s biggest this year. … Continue reading

Sao Paulo reaches for hub status

A visionary plan to put Brazil and São Paulo in pole position as financial centres for Latin America was unveiled on March 24th, backed by luminaries from the private and public sector. The nuts-and-bolts of how this scheme will be … Continue reading

Reverse ADRs hot in Chile

March 23, 2010

A twist on an the concept of American Depository Receipts is attracting greater trading to emerging market exchanges, generating more income for local brokers and more choice for investors as well as helping large companies diversify their investor base and … Continue reading

Brazil Equity: Rally Hits Headwinds

March 3, 2010

A game of two halves is predicted for Brazilian equity, which started 2010 on shaky ground. New issuance is scheduled for the first half, but volatility will follow. After a 2009 of bountiful returns in Brazilian equity markets that stoked … Continue reading

Brazil Elections: Battle of Bureaucrats

Brazilian elections will likely feature two competent, slightly dull bureaucrats. However, behind workaday exteriors lie tough personalities with ruthless political instincts. Investors tend to see Brazil’s elections – the first round of which are slated for October 3 – as … Continue reading

Brazilian banks tread cautiously on expansion

Recent rumours about Brazilian bank expansion would suggest that the country’s main players are thinking big. Itaú Unibanco in particular has been linked with a number of deals across the globe, while Banco do Brasil is believed to be considering … Continue reading

Brazil Infrastructure: New Model Hopes Fade

The World Cup and Olympics offer a once-in-a-lifetime opportunity for Brazil to engage the private sector and foreign banks to update infrastructure. In 2007, after a plane accident in which 199 people died, a short-lived movement to protest Brazil’s woeful … Continue reading

Cry for me, Argentina

February 15, 2010

Argentina’s latest attempt to get its hands on more cash through the desperate measure of purloining Central Bank reserves and firing its president has both emasculated the bank and further alienated investors. The move may provide a little more stability … Continue reading

Brazilian markets start eyeing elections

The last two Brazilian elections could hardly have been more different. In 2002, Brazilian markets went haywire. With the real and equity values tumbling, Brazil went cap-in-hand to the International Monetary Fund (IMF) to seek a bailout to the tune … Continue reading

Latin American Custody

January 2, 2010

Large global custodians working in Latin America are not having the best of times. The wider banking crisis has trickled down and affected even healthy custody businesses as parent banks have had to wield the axe across the board. Custodian … Continue reading

The world takes note of Brazil

December 30, 2009

Brazil’s past battles with hyperinflation have left the legacy of a payment system whose efficiency assists its economy’s stability to such an extent that it has garnered a host of global admirers. The rude health of the Brazilian banking system … Continue reading

THE BANKER Santander

November 27, 2009

The Credit Suisse team working on the Banco Santander Brasil initial public offering – the largest in the world this year – travelled to four continents in two and a half weeks to secure the deal, a hectic schedule that … Continue reading

Luxury goods: Undisputed number one

November 17, 2009

Visiting fashionistas taking a stroll down São Paulo’s fashionable Oscar Freire street would feel at home. Toy dogs peep out from handbags or trot, arrayed in chic raincoats and paw-gloves, at the feet of their owners. Wafer-thin beauties are on … Continue reading

Corporate social responsibility: Businesses that engage with society

The odds are stacked against premature, low birthweight babies in Brazil. Often born to low-income families, the baby is typically taken to a pre-natal unit and isolated from the mother, preventing bonding. That, plus the uncertain prospects for a premature … Continue reading

Bioplastics: Packaging that engineers a reduced carbon footprint

Large petrochemical companies are racing to bring industrial-scale production to Brazil’s nascent bioplastics industry, based in the state of São Paulo. The state is responsible for 70 per cent of the country’s ethanol production, has a developed petrochemicals industry as … Continue reading

Service industries: Consultants cluster and prosper

São Paulo is rapidly emerging as the centre for Brazil’s service industries, drawing in consultants of all stripes. Lawyers accountants marketing, PR and branding consultants, IT specialists and headhunters are finding profitable niches. They are also encountering fewer bureaucratic hurdles … Continue reading

Conference business: The convention capital of the Americas

Chaotic, sprawling and vast, São Paulo is hardly up there with Honolulu or Paris as a must-see city for convention-goers. Yet, it has become a leading destination for events in the Americas. Increasingly, it is capitalising on the influx of … Continue reading

Regulatory burden: Agencies attempt to slice through thicket of red tape

The state of São Paulo has belatedly started to grapple with its bloated and unwieldy bureaucracy through a dedicated agency whose task is to cut red tape for businesses and citizens. The move is welcome, as the state is a … Continue reading

Retail: The battle for consumers heats up

November 4, 2009

It’s 9.30 on Sunday morning and they have already put up the elastic cordons to allow the queue for 15 items or fewer to snake round on itself at the Extra supermarket in the Bela Vista neighbourhood of São Paulo. … Continue reading

Transport: Highway concessions

São Paulo city sits just under 80 kilometres from an inviting tropical coast. Little wonder that so many of its citizens flock to the beaches by car on the long, hot week-ends of the summer. These days, however, beach-goers often … Continue reading

Hotels: An Olympian effort may be required

The rather drab Sheraton hotel in Rio de Janeiro seems to epitomise some of the particular difficulties facing hotel chains in Brazil. As advertised in the blurb, it is the only beachfront resort in the city, sitting by a quiet … Continue reading

Santo Ant

Getting the money for the Santo Antônio project started off with a bang, when Brazil’s National Development Bank, the BNDES, announced that it would provide R$6.2bn (US$3.6bn) in debt in December 2008. The loan made the hydro plant the largest … Continue reading

Banking: Quick recovery, enviable outlook

Brazil’s banks have reason to feel pleased with themselves. Spanish group Santander‘s IPO of its Brazilian business last month was the world’s largest so far this year and destined to fund rapid expansion. It was embraced by investors and the … Continue reading

Petrobras Funding: Exciting, Uncertain Times

November 1, 2009

The government’s plans for development of the pre-salt fields in Brazil put Petrobras firmly centre stage. Presidential elections loom and detail is lacking, but oil experts are excited. Funding for the next stage of Petrobras’ $174 billion budget through 2013 … Continue reading

Downturn plays into regional hands

October 28, 2009

The economic downturn has temporarily alleviated the pressure on Brazil’s regional banks. They are using that breathing space to seek efficiencies, including cost cutting, improving customer service and seeking capital from new sources. They need to move fast: as national … Continue reading

Brazil Takes Off (Hedge Funds)

October 16, 2009

Strong performance draws assets back to hedge funds, but how long can it last? Brazil is flying high again—financial markets are soaring and the hedge fund industry is following suit. After big losses in 2008, Brazilian hedge funds have posted … Continue reading

Banco do Brasil rattles cosy credit markets

October 5, 2009

On August 13, state-owned Banco do Brasil made an announcement that shook the Brazilian banking industry. The bank was once again the country’s largest in assets and lending, dethroning newly merged Itaú-Unibanco. The gloves are off in the fight for … Continue reading

Banco Santander in Brazil Push the float out

September 10, 2009

Spain’s biggest bank offers shares in its Brazilian business THE filing by Spain’s Banco Santander on September 3rd to carry out an initial public offering (IPO) of shares in its Brazilian unit may seem plucky given rising default rates on … Continue reading

Brazil: Good behaviour sees rewards

September 9, 2009

Brazil has been confounding sceptics who doubted its economic robustness with a recent display of vigorous corporate life. Thanks to good economic policy and a dash of luck from its export exposure to commodity prices, the country, which was one … Continue reading

Totvs: Software company finds lucrative niche

Brazil is not known for its software industry, which makes the success of Totvs, a company that might appear less out of place on the IT-heavy Bombay Stock Exchange than on Brazil’s Bovespa, all the more surprising. Totvs produces enterprise … Continue reading

China/Brazil: New trade imbalances

September 2, 2009

“I am going on to defend a new economic order and a new commercial policy in the world.” These were the words of Brazilian President Luiz Inácio Lula da Silav before his May visit to China to see his counterpart … Continue reading

Peru: Fragile uptick in capital markets

Peru was grabbing headlines in June and July on the back of two very different stories and ones that would seem to be mutually exclusive or at least unlikely. The country has been in the grip of social unrest—particularly in … Continue reading

Brazil Real Estate Equity: Back from Near Death

September 1, 2009

After a dizzying plunge in real estate shares, some Brazilian homebuilders are gingerly testing the market. Strong foundations come from single-digit rates and a low income-housing program. Just two years ago, Brazilian real estate was flying high on the back … Continue reading

Brazil Equity Markets: Good days, bad ways

Brazil is firmly back on the world equity map, following a slew of blowout deals. Some fear a return to the reckless conditions of 2007, and investors are wary. Brazilian markets are again à la mode. The economy and consumer … Continue reading

Brazil Macro Outlook: Too Much Stimulus?

Brazil’s rebound is impressive, though government intervention creates distortions that must be addressed. The election cycle destabilizes the operating environment. There is no mistaking a sentiment uptick in perennially optimistic Brazil. The government has trod a sensible path of fiscal … Continue reading

Mexican banks rein in as crisis takes hold

The Mexican economy promises to be one of the world’s worst performing this year, against some stiff competition such as Lithuania which may experience a more than 20% fall in GDP. Some economists are predicting that this year may shape … Continue reading

Brazil Real Estate Equity: Back from Near Death

After a dizzying plunge in real estate shares, some Brazilian homebuilders are gingerly testing the market. Strong foundations come from single-digit rates and a low income-housing program. Just two years ago, Brazilian real estate was flying high on the back … Continue reading

Latin miners dash for stronger lenders

August 1, 2009

Tighter credit and lower commodities prices have pushed even the largest mining companies in Latin America back into the arms of the development finance community. Smaller operators have even fewer options. John Rumsey reports. Latin American mining finance has witnessed … Continue reading

Investors prepare for a rush to the market

July 7, 2009

If anyone still doubted Brazil’s significance as a global equity market those doubts were surely swept away last week as VisaNet, the Brazilian arm of the credit card giant Visa, completed the biggest IPO in Brazil’s history and the world’s … Continue reading

Latin America and global warming: An ambivalent polemic

July 1, 2009

A future of rising temperatures and altered rainfall patterns could be disastrous for the Latin American region. Argentina serves as a good illustration of just how severe the impacted could be. Renowned for its fertility, the country has seen its … Continue reading

Developing Latin carbon markets

June 7, 2009

Latin America has tended to find itself on the sidelines in the debates and actions surrounding climate change as attention has been lavished on the huge populations and rapid development of Asia, especially China and India. In part, the lack … Continue reading

Changes afoot at Brazilian depository

June 5, 2009

The move by private equity firm Advent International to take a stake in Brazilian central depository Cetip looks like a shrewd move from the Boston-based group. Cetip enjoys a dominant position in its field in fixed-income and over-the-counter (OTC) derivatives, … Continue reading

Brazilian capital markets — Back on song

June 4, 2009

With the panic subsiding fast, Brazil’s equity markets have staged an astonishing turnaround allowing canny investment banks to find their feet in the country again. A marked renewal of interest in riskier assets, due in part to relief stemming from … Continue reading

Brazilian Corporate Governance: Are New Rules Enough?

June 1, 2009

As regional default risk ticks higher, investors are looking much more closely at how companies are run. New Brazilian governance rules are welcomed, but will they prove toothless? Brazil’s financial market regulator is set to tighten up standards of disclosure, … Continue reading

Nerves Of Steel

April 3, 2009

As the global downturn tightens its grip, John Rumsey looks at how Brazil is placed to weather the financial storm Just a few months ago, Brazil was patting itself on the back for having side-stepped the worst of the global … Continue reading

Spin City

Always the bridesmaid, São Paulo now wants to shine, but it will take more than just good PR, says John Rumsey Overshadowed by its more glamorous neighbour, São Paulo has often struggled to assert an image. Rio, with its iconic … Continue reading

Brazil

It

Brazil

It’s the rebranding success story, so what’s next for the once humble Havaianas, asks John Rumsey? On an underground space designed by a leading architect on the ritziest street in Latin America’s most fashion-conscious city is a brand-new store. It’s … Continue reading

Op risk centre stage

April 2, 2009

Strict bank oversight and isolation from the global banking community means Brazilian banks are insulated from the worst of the crisis, but they are not immune. Domingos Figueiredo de Abreu, executive director at Bradesco, talks to John Rumsey about the … Continue reading

Trade finance: Latin America

March 10, 2009

Short-term trade finance has come apart in Latin America but banks and governments are focusing on home markets to the detriment of a global solution. The effects are reverberating hard in emerging markets and a dependence on devalued commodities and … Continue reading

Brazil Politics: Life After Lula

March 5, 2009

Markets almost collapsed during the 2002 election, when Lula first took power. Less volatility is expected in 2010, and José Serra leads the polls. Regardless of how well Lula negotiates this year’s sharp downturn, the next Brazilian president faces significant … Continue reading

Brazil Private Equity: Relative Value Play

Private equity is the last man standing in the capital supply game. But fund raising prospects have sharply deteriorated and caution reigns. Until mid-2008, Brazilian private equity (PE) firms faced brutal competition for investment from buoyant public equity and debt … Continue reading

Brazil Mining: Into the Pits

Large Brazilian metal producers are well capitalized and scouting opportunity. Incremental, opportunistic asset purchases by deep-pocketed firms look likely. Vale’s decision at the end of January to unleash $1.6 billion in acquisitions of Rio Tinto assets – including $750 million … Continue reading

Can Mexico

March 2, 2009

Mexico has introduced a raft of inducements to maintain sponsor interest in the Farac roads programme. But matching the success of the first package will be difficult. To continue reading, please go to the Project Finance website at www.projectfinancemagazine.com.

Ecuador: Bumpy Ride Ahead

March 1, 2009

Ecuador’s decision not to pay part of its sovereign debt is triggering speculation about just how far President Rafael Correa intends to pursue non-orthodox policies. It is even leading to heated debate over whether the country may jettison the US … Continue reading

Brazil

Brazil’s decision to rush through a sovereign wealth fund at the end of last year has been greeted with some derision among economists. The fund has none of the characteristics of a typical fund of its kind and is more … Continue reading

Second Shake up Wave for Brazilian Corporate Governance

Brazil is gearing up for a second wave of corporate governance reforms. These will focus on providing greater transparency for investors in areas such as shareholder conflicts of interest and clarity on remuneration as well as proposals to make voting … Continue reading

Brazilian mining sector braces for downturn

February 4, 2009

The February 12 announcement that Aluminum Corp of China was set to invest $19.5 billion to get access to some of the best iron ore and copper assets of Rio Tinto, highlighted the perils facing indebted mining companies, now facing … Continue reading

Silence deafening in Mexican markets

February 2, 2009

Mexico’s equity markets have succumbed to global malaise and recovery will depend less on commodity prices, as is the case for most of Latin America, and more on improved debt markets and a US recovery. The slowdown in the US … Continue reading

Andr

The former UBS banker talks about his solo venture to create BTG, a Brazilian trading house-cum-merchant bank based in São Paulo. André Esteves, captain of the new global trading house-cum-merchant bank BTG, headquartered in the improbable setting of São Paulo, ducks … Continue reading

BG Group set to invest up to $5bn in Brazil

January 14, 2009

BG Group plans to invest up to $1.25bn (£862m) a year in Brazil over the next four years as it develops its share of the world’s most exciting oil discoveries for many years. Frank Chapman, the oil and gas company’s … Continue reading

Mining sector slump induces M&A speculation

January 10, 2009

The January announcement by Rio Tinto that it was shelving a more than $2 billion mining investment in Brazil shows just how quickly the mining industry has gone from boom to bust with start-up activity and rumours of new project … Continue reading

Brazil industrial output falls 6.2%

January 7, 2009

Brazil’s industrial output dropped 6.2 per cent in November year-on-year, the biggest drop since December 2001, indicating a far faster economic slowdown than was expected even weeks ago. The dire numbers are just the latest in a string of data … Continue reading

Brazil

January 5, 2009

Brazilian media had a field day in April when the new luxury shopping mall Cidade Jardim opened in São Paulo using Sarah Jessica Parker of Sex and the City as its spokesperson rather than a homegrown talent. It turned out … Continue reading

Brazil

January 2, 2009

Brazil’s equity market, which produced 10% of IPOs globally in 2007 and shot up 73.4% in dollar terms, has turned from boom to bust. The crisis has not only swept away fat bonuses and optimism, but also broken the envied … Continue reading

Emerging market custodians: only the fit will thrive

December 15, 2008

A gloomy combination of lower fees and customers rushing out of emerging markets for the safety of US dollar investments has taken the wind out of many immediate plans for global custodians to expand services for clients investing in developing … Continue reading

Brazil I-Bank Bloodbath

December 1, 2008

Brazilian investment banks are dealing with plummeting fees and extremely bearish prospects for 2009 by chopping staff and bonuses. Meanwhile, the US shops that appeared with such fanfare over the last 18 months are under significant strain – some went … Continue reading

Brazil Credit Squeezed

New data out of Brazil shows that the credit crisis has arrived in force, particularly hurting smaller banks. The government’s reaction has been broad-based as it seeks to prevent a rapid economic slump and includes pressure on private sector banks … Continue reading

Giant new Brazilian bank throws down size gauntlet

November 18, 2008

The merger of the two Brazilian giants, Banco Itaú and Unibanco, creates Brazil’s biggest bank and a leader in the Americas. The idea is for the bank to become a global player exploiting a moment when Brazil’s global stature is … Continue reading

Argentina: maddeningly far from the crowd

While governments in most of the world have taken radical steps to battle the crisis, including buying stakes in banks, Argentina has gone much further by effectively nationalising its pension fund industry. At a stroke, the country has secured its … Continue reading

Guatemala: Right place, wrong time

November 10, 2008

Just as the banking industry’s big names turned their attention towards Guatemala, the credit crisis struck, plunging the country’s modernisation plans into jeopardy. Guatemala’s economy had been humming along nicely, if not spectacularly, for the past few years of its … Continue reading

A boom at odds with world gloom

Panama has been capitalising on its prime location between the Americas to attract foreign companies, and has been ramping up its infrastructure to support growth. So how will it be affected by the global slowdown? One might expect the US … Continue reading

Brazilian insurance firms feel the squeeze

November 7, 2008

Brazil’s tightly-regulated, fast growing and generally well-capitalised insurance market looks doubly attractive in the wake of the pounding insurers have been subjected to in more loosely regulated markets, epitomized by the nationalization of AIG. For foreign insurers, tightening solvency regulations … Continue reading

Latin financial markets: The rot spreads

November 5, 2008

Latin equity and debt markets have been especially hard hit in the last few weeks by the generalized flight-to-quality and a growing sense that emerging markets are proving the last shoe to drop, compounded by dramatic currency volatility throughout the … Continue reading

Fall-out Fears Ferment in Latin America

This year’s World Bank/International Monetary Fund shindig in Washington DC saw most attention focused on the plight of banks in the developed world. Yet, it is becoming increasingly evident that the crisis in infecting both the global real economy and … Continue reading

EMERGING MARKETS: Venezuela’s oil bonanza disguises decaying economy

October 13, 2008

Select a clutch of Venezuela’s macro numbers, say GDP or government revenue, and you find an economy that looks robust and growing. The surge in oil prices has pushed up revenues at nationalized oil firm PDVSA, helping boost international reserves … Continue reading

Latin America telecoms Ringing the changes www.latinfinance.com

October 5, 2008

Brazilian fixed-line is consolidating while ferocious competition in mobiles pressures margins. Both sectors are calling for fundraising solutions. The slow decline of Brazilian fixed-line services is tempered only by the painful birth of a new national telecoms champion through the … Continue reading

Vale

September 25, 2008

When Brazilian mining giant Vale listed on the Paris Bourse in July, CEO Roger Agnelli re-iterated his ambition for the company to become the largest miner in the world. That might look gutsy for a firm that emerged from state-ownership … Continue reading

Gerdau: emerging market champion

The long, steep rise in commodity prices has been a deep blessing for hydrocarbon rich Latin countries, spreading its largesse blindly from oil-rich Venezuela to diversified mineral-providers including Peru, Chile and Brazil. Many companies, such as Venezuela’s state-run oil firm … Continue reading

Ecuador to seize Brazil

The Ecuadorean government has sent in troops to take over the assets of Brazil’s giant construction firm Odebrecht and prevented senior executives from leaving the country. The government accused the firm of poor construction in the giant San Francisco hydro-electric … Continue reading

Gloss comes off Brazilian exchange merger

September 3, 2008

The consummation of the marriage between Brazil’s stock market, Bovespa, and commodity and futures market, BM&F, to create BM&F Bovespa has brought into being a regional powerhouse. Long-term prospects for cost savings, new products, and capturing money from other Latin … Continue reading

Brazilian Real Estate: A tale of two cities

Two pools (one for adults, the other for kids), a cinema-café complex, a meditation space, spa, saunas, putting range, climbing wall, baby park, and skating centre, oforu (a kind of Japanese bath) and shiatsu. And the list goes on. But … Continue reading

Brazil: white-collar crime rising

September 2, 2008

Brazil may be losing a whopping 6% of its GDP thanks to white-collar crime, making it one of the most exposed countries in the world to fraud, according to a recent report by KPMG. Of the countries that have reported … Continue reading

Brazil Supplement: Equity IPO market: Abandon all hope?

A secondary nosedive for OGX, following a jumbo IPO, adds to the gloom in Brazilian equity. The jaw-dropping performance of Eike Batista in coming to market with a new petroleum company, OGX, in the teeth of a tough market and … Continue reading

Brazil Supplement: Infrastructure, Indecision Thwarts Ambition

After all the hot air about desperate need for investment, Brazil has failed to deliver on large parts of its infrastructure promise, with the notable exception of power. The Federal government and Brazil’s most developed states are desperately aware that … Continue reading

Brazilian Supplement: Sun Goes Down on the Economy

Not long ago, Brazilians were watching declines in the global economy with a certain dose of schadenfreude as internal demand and the commodity boom continued to progress smoothly and decoupling talk was all the rage. Higher inflation, rising rates and … Continue reading

Risk pros in high demand in Latin America

August 1, 2008

LATIN AMERICA – Banks in Latin America are expanding their teams of risk professionals, and are paying up to do so, as they get to grips with Basel II and a rapid expansion in credit that demands focused control on … Continue reading

CSN: Brazil steelmaker rolls out fresh strategy

July 22, 2008

Otavio Lazcano is not a typical Latin American finance director. His fluent English is peppered with Wall Street-isms and expressions. He can also reel off the currencies of pre-euro Europe. His conversational flourishes hint at his background as a fixed-income … Continue reading

Financiers tied to Brazil vote-buying arrested

July 9, 2008

Brazil’s federal police made a series of raids on Tuesday morning and arrested 24 people, including a well-known investor and banker and a former mayor of São Paulo.Police say they have proof the first two were involved in siphoning off … Continue reading

Brazil criticised for NGO plan

July 8, 2008

Non-governmental organisations active in Brazil will have to re-register with the government under regulations which have drawn criticism from campaigners. Organisations will need to detail their sources of financing, list executives and provide a breakdown of their plans and locations … Continue reading

IPO market set to revive in second half

Share issuance on Brazil’s capital markets has come to a screeching halt this year after a record-busting 2007 which saw the country come from nowhere to be one of the most significant issuers of new deals in the world. Faced … Continue reading

Banking: Rate rise threat to sector

Brazilian banks are defying global trends by posting healthy increases in profitability and by oozing confidence about their long-term future. Bradesco and Itaú, the two leading private-sector banks, have shot past many large European and US counterparts in market capitalisation, … Continue reading

Brazilian derivatives: growing up fast

July 2, 2008

The jumbo merger between the Brazilian stock and derivatives markets earlier this year highlighted the growing power of Brazil’s capital markets: the new enterprise, BM&F Bovespa, is expected to be the world’s third-largest listed exchange. Innovative new products are bound … Continue reading

Latin America cherry-picks from Sarbanes-Oxley

July 1, 2008

LATIN AMERICA – As the world continues to struggle with Sarbanes-Oxley (Sox), much of Latin America has adopted an approach of self-regulation and disclosure. Mexico and Brazil, the two biggest markets in the region, work within this structure although Mexico … Continue reading

Brazil extends credit to boost farms

The Brazilian government plans to extend credit in the agricultural sector in an attempt to increase production of key foodstuffs and damp down inflation, which has pushed the basic basket of goods up by 50 per cent in some cities … Continue reading

Latin American renewables: Energy rich, cash poor

June 2, 2008

Latin America is a fertile region for renewable energy development but government support is sadly lacking. A report from Rio de Janeiro on how banks are getting involved in project investment. Latin America’s abundance of natural resources, which are already … Continue reading

Brazilian Steel Girded for Growth

June 1, 2008

Rising raw materials costs are squeezing the margins of some Brazilian steel companies, reducing their ability to expand as fast as competitors on their home turf. The battle for iron ore is intensifying. Brazilian steel companies are in rude health … Continue reading

Striking Cash

In early May, after a spectacular share price run-up on the back of new discoveries, Petrobras found itself the world’s ninth-largest company with a market value of just over $248 billion. Still half the size of Exxon, it is now … Continue reading

Poor practices taint Brazil

May 21, 2008

Luís Oliveira and his gang get up at dawn to take a rickety bus to Fazenda Agua Doce, a sugarcane farm in central São Paulo state where the heat regularly tops 40 degrees. They cut the cane by hand with … Continue reading

Global bank growth stories (excerpt)

May 15, 2008

Banco BMG, BRAZIL Ricardo Gelbaum (pictured right), chief financial officer at Banco BMG, says the bank’s success is a result of its unwavering focus on payroll-deducted loans, which the bank began to offer in 1998. This involves negotiating with public … Continue reading

Brazil investment bank hiring: Place Your Bets

May 5, 2008

Global investment banks may still be hemorrhaging cash from subprime, but they are also placing significant bets of Brazil. The fee pool is evaporating and their nerve will be tested. Annual musical chairs at Brazil’s investment banks is underway at … Continue reading

The Rise and Fall of Brazil Equity

The Bovespa has held steady, but issuers are in hiding until the global storm passes. Corporates are finding private alternatives and M&A is picking up slack for bankers. In late February, amid a glacial IPO market, Brazilian bankers took a … Continue reading

Ratings upgrade puts Brazil at top table in investors

May 2, 2008

Brazil, for years dogged by its boom-and-bust economy, has finally won a place on the top table in the eyes of the world’s investors. For the first time this week it was awarded investment grade status, which means Brazil is … Continue reading

Latin microfinance market wakes up to risk mitigation

May 1, 2008

LATIN AMERICA – The Latin American microfinance scene is growing fast, and institutions and donors are waking up to the operational risks embedded in the business. As competition from commercial banks for this lucrative business heats up, donors are starting … Continue reading

Latin America less alluring as dollar dives

International organisations are rolling out an ambitious programme to increase positions in Latin America, both through relocation from headquarters and local recruitment, as they put staff nearer the projects they manage. The trend comes at an awkward time, as the … Continue reading

Lift to Brazil credit rating boosts stock markets

Brazilian stock markets hit a record high yesterday after rating agency Standard & Poor’s lifted the country’s credit rating to investment grade, citing its economic expansion and declining foreign debt. Brazil’s benchmark stock index, the Bovespa, surged more than 6 … Continue reading

Brazil targets overseas markets for ethanol

April 15, 2008

The figures for the growth in Brazil’s ethanol industry are impressive. It is the world’s second largest producer, after the United States, the world’s biggest exporter and the cheapest producer globally of ethanol. It has plenty of room for expansion … Continue reading

Wake up time for Venezuela

April 10, 2008

Bankers were untroubled by Venezuela’s renationalisation of several heavy oil projects – until Exxon put a freeze on PDVSA’s worldwide assets. John Rumsey looks at the fallout. To continue reading, please go to the magazine website at www.projectfinancemagazine.com

FT REPORT – PROPERTY 2008: US and Europe choose different routes

April 8, 2008

The coastal village of Sortland inside Norway’s Arctic Circle and the laid-back 300-days of sunshine a year village of Pipa, near some of the best tropical beaches in north-east Brazil, may seem to have little in common other than fishing. … Continue reading

Giddy days for Brazilian private equity

April 4, 2008

Brazilian private equity is enjoying Lotus days and an unbridled sense of optimism. Established firms are raising big new slugs of money, creating giant funds that dwarf any currently in operation. Money is pouring in not just from the traditional … Continue reading

Suffering Brazilian ethanol sector shows signs of life

April 2, 2008

Despite all the hullaballoo surrounding ethanol worldwide and the perception that alternative energy is the next big thing, Brazilian ethanol stocks posted dire performances last year. Last year’s results were affected by a glut of money that pushed up asset … Continue reading

Warmongering in LatAm darkens prospects

The Colombian and Venezuelan media reactions to the killing of rebel group FARC leader Raúl Reyes and at least 20 other rebels in Ecuador are instructive in their gaping differences. Many Colombians cheered as they watched media reports. In Venezuela, … Continue reading

Brazil Outshines Argentina

April 1, 2008

The Brazil and Argentina stock markets have fallen in step this year, blurring last year’s trend for outperformance from Brazil’s Bovespa and weakness in Argentina’s Merval indexes. In spite of Brazil’s long bull run and Argentina’s bearish performance and the … Continue reading

Vale losing tight grip on Brazilian iron ore

The cliffhanger will it-won’t it of the giant miner Vale’s negotiations to take over Anglo-Swiss mining firm Xstrata has dominated Brazil’s financial headlines. The estimated $90 billion deal would realize Vale’s dream of becoming a truly diversified world mining leader. … Continue reading

Demand grows for business continuity in LatAm

LATIN AMERICA – The demand for business continuity services is accelerating in Latin America, driven not only by the growing sophistication of banks but also the spread of such services through new areas of the economy. Increasingly, it is leading … Continue reading

Bovespa and BM&F agree exchange deal

March 27, 2008

Bovespa Holding, which controls the São Paulo Stock Exchange, and the BM&F, Brazil’s main futures exchange, on Wednesday gained approval from their boards for a merger that will create the second-largest exchange in the Americas. The two exchanges had announced … Continue reading

Brazilian energy sell-off cancelled

March 26, 2008

São Paulo’s state government yesterday cancelled the privatisation of CESP, the Brazilian energy group, because of a lack of interest from potential bidders. The deal would have raised a minimum of $R6.6bn ($3.8bn, €2.4bn, £1.9bn), for a company which is … Continue reading

Latin Investor Relations: High standards are the exception

March 6, 2008

Latin firms continue to trail the global pack in corporate governance. Of late, Brazilian firms, incentivized by a proliferation of market initiatives and support from vigorous associations have progressed furthest and fastest while Chilean companies continue to have the strongest … Continue reading

Multilatinas: the new pretenders

March 4, 2008

A new generation of firms in the Latin Americas that are breaking free from old traditions. A new wave of multilatina firms is emerging, and it is shaking up old, complacent ideas about Latin America’s multinationals. Traditionally, multilatinas were Mexican … Continue reading

Costa Rica: Incomers incite fight for clients

As foreign players enter the market, how much competition is healthy for Costa Rica’s banks? The entrance of an élite of foreign banks in Costa Rica is sending shockwaves through the system. The good news is that it is spurring … Continue reading

Brazil Special Report: Consolidation Wave Not Broken

March 3, 2008

Brazilian M&A bankers are unflappably optimistic in spite of a crisis in global markets. With consolidation penetrating ever more sectors, M&A appears on track. M&A bankers claim their Brazil pipeline is as strong as it was in 2007. Ricardo Lacerda, … Continue reading

Brazil Special Report: Overview

Ascension to investment grade is thwarted by fiscal problems, as well as growth, inflation and rates. A lame duck president looks unlikely to tackle the issues head on. On the first Friday in January, equity trading volumes in Brazil collapsed … Continue reading

PE Shows Signs of Restraint

Brazilian private equity has been enjoying a fundraising heyday. But optimism will be severely tested by a choppy Bovespa and hostile debt markets. The biggest international players are arriving, the drip of money from wealth funds is slowly accelerating, local … Continue reading

Low financing rates in Brazil

February 6, 2008

When Luiz Carlos Ferreira decided he wanted to get walk-in closets built in the flat he had just bought in the suburbs of São Paulo, he faced a quandary. He did not have the money to pay the 10,000 reals … Continue reading

Big hitters look afar for acquisitions

February 4, 2008

Latin American companies are snubbing local acquisitions in favour of far-flung deals but SMEs will find it hard to play. Large Latin companies are in increasingly good shape to make international acquisitions but, rather than scouting in their backyard, blue … Continue reading

Foreigners flock in as Panama blossoms

With a thriving economy that appears to be on the up, Panama is seeing a wave of takeovers by foreign banks. Panama has experienced a new binge of banking consolidation driven by foreign entrants in the last two years. Stimulated … Continue reading

Mexican and Brazilian insurers pushing for Solvency II

February 1, 2008

Latin America’s largest and fastest-growing insurance markets are pushing ahead with ambitious plans to implement Solvency II. Both Mexico and Brazil are determined to make sure they keep abreast of best practice, but they will have to proceed by trial … Continue reading

Bring on the Small Caps

After a banner 2007 for Brazilian IPOs, small caps are getting set to issue. Liquidity and costs are against them, but Bovespa Mais hopes for a breakthrough. Nutriplant seems an unlikely company to keep the bigwigs at the Bovespa up … Continue reading

Foreigners pick off Brazilian asset managers

US and European fund managers have been snapping up stakes in Brazil’s small, specialist fund boutiques. They are looking to gain exposure to some of the world’s fastest growing financial markets, diversify revenues, and capture the huge Brazilian shift out … Continue reading

WORLD NEWS: Brazil surprises with surge in foreign cash

January 18, 2008

Barely a day goes by in São Paulo, Brazil’s biggest city, without news of more foreign investment, and this week has been no exception. Anglo American, the mining giant, said yesterday it would pay $5.5bn (€3.7bn, £2.8bn) to buy control … Continue reading

UK: Anglo in talks over $5.5bn Brazil deal

Anglo American, the world’s second-largest mining group, is in exclusive talks to acquire control of two iron ore projects for $5.5bn from MMX Mineração, the Brazilian mining company. Once completed, the deal will significantly increase Anglo’s long-term involvement in iron … Continue reading

COMPANIES – INTERNATIONAL: Oi close to taking over Brasil Telecom

January 11, 2008

Oi, the Brazilian telecommunications company, formerly known as Telemar, is at an advanced stage of negotiations to take over Brasil Telecom (BrT) – a move that would create a national champion in an already relatively concentrated industry. A deal, expected … Continue reading

Brazil

January 7, 2008

At first glance, Brazil´s new package of spending cuts and revenue raising measures is welcome. The package – designed to cover the R$38bn shortfall left by the lapsing of the CPMF, a blanket tax on financial transactions – includes some … Continue reading

Brazil: promising tourism development faces many obstacles

January 4, 2008

Brazil’s biggest image problem is not violence but ignorance. For its size and diversity, the country remains very little known and surprisingly under-visited, ranking 37th in visitor numbers in 2006, according to the World Tourism Organisation. That number is heading … Continue reading

Central Banker of the Year/ Americas: Henrique Meirelles, Governor, Central Bank of Brazil

January 2, 2008

Under Henrique Meirelles, the Central Bank of Brazil has emerged as a model of restraint and prudence in Latin America. Facing a welcome boom in inflows of direct and portfolio investment and domestic demand, the bank has reacted with a … Continue reading

Bovespa Holding: a super-charged IPO

The IPO of Bovespa Holding, the Brazilian stock exchange, was a blow-out and the largest deal on that market to date. It pressed just about all the buttons for champagne all round: the price range was raised, the deal heavily … Continue reading

Santander shakes up Brazil

Santander’s takeover of ABN Amro Banco Real has changed Brazil’s banking landscape, but the integration process may not be easy. Santander’s acquisition of ABN AMRO Banco Real in Brazil has catapulted it into an elite trio of top banks, ranked … Continue reading

Mexico pushes money laundering up the agenda

January 1, 2008

Mexico City The US anti-drugs Merida Initiative, announced in late October, comes as Mexico struggles to get to grips with money laundering at smaller financial institutions and tackle its moribund legal system. The US initiative, through which Mexico’s northern neighbour … Continue reading

BNDES fishes for funds

December 1, 2007

The Brazilian National Development Bank, the BNDES, is fishing for extra funds after recalculating its investment plans and projecting that it will lend as much as 15% more than expected for the 2008-11 period, as it seeks to step up … Continue reading

Fasten your seatbelts

November 12, 2007

Some of GOL’s problems are local, including two accidents in the last 18 months which have dented confidence. Others are global, like higher fuel prices. But two recent events suggest the company may be turning a corner. The first was … Continue reading

Latin Debt Markets Show Swift Recovery

November 10, 2007

Previous international debt crisis were all too predictable in their wash-down effect on Latin America. They swiftly led to an exodus of cash north over the Rio Grande in search of the safety of US Treasuries. The crisis triggered by … Continue reading

S

November 5, 2007

Despite infrastructure issues and a lack of scenery, São Paulo has seen off local rivals and is emerging as the region’s pre-eminent financial centre. John Rumsey explains. When Argentina’s Banco Patagonia decided to seek fresh capital to continue expansion, it … Continue reading

Pension Funds Diversify and Grow

October 12, 2007

Brazilian pension funds are expanding by 15%-20% per year and have already garnered assets of 400 billion reais, according to Raphael Santoro, a consultant at pension fund consultancy Towers Perrin in São Paulo. The big question is how fast larger … Continue reading

Andean roulette

October 1, 2007

Ecuador’s bankers insist the president’s high stakes political strategy, which has included singling them out as public enemies, is ruining the economy. Much worse-than-feared production numbers from state-oil firm Petroecuador, stagnating foreign investment in that and other sectors and economic … Continue reading

Investors Feel Squeeze

Brazil is failing to engage the private sector in infrastructure development by undermining returns. This is a drag on its ambitious and urgent growth program. The fact that revitalizing Brazil’s rotten infrastructure is a centerpiece of the second Lula administration … Continue reading

Venezuela moves to slash capital adequacy ratios

Venezuela is looking to cut capital adequacy ratios for financial institutions to levels at a time when banks are ramping up consumer lending, increasing risk substantially. Bankers in Caracas say that the move, if implemented, would take the country further … Continue reading

FT REPORT – CORPORATE FINANCE: In defiance of the downdraft – so far

September 26, 2007

The smooth conclusion of the takeover of a big US steel company by a Latin American-owned pretender still raises eyebrows, although perhaps these days only a Roger Moore-style half inch. But when such deals are financed with a jumbo bridging … Continue reading

FT REPORT – CORPORATE FINANCE: Rapidity of the upswing has caught everyone by surprise

Tracking down an investment banker in Brazil at 11pm is simple. You do not need to search out a mobile number or email: bankers are at their desk every evening, burning the midnight oil. “The number of deals hasn’t increased … Continue reading

Henrique Meirelles: standing firm

September 15, 2007

“When I took over as Central Bank governor, Brazil had annualized inflation of 30%, high interest rates, minimal reserves and a weak currency. There was no fixed-income issuance and there have been times when we felt under siege for being … Continue reading

Playing ball with Ch

September 3, 2007

Banks that co-operate with Venezuela’s government can make good profits, but some fear a total takeover of the banking system is the true game plan. Posters of the stout, stern president Hugo Chávez and his favourite slogans dot Caracas, with … Continue reading

IPOs: More Haste, Less Speed

September 1, 2007

Brazilian equity markets have enjoyed another excellent first half, fuelling a record number of IPOs issued from an ever-wider range of companies. However some issuers are coming to market too quickly. The prevailing mood in Brazilian markets this year has … Continue reading

ABS Seen Hitting a Bump

Brazil’s fast-growing market for securitization looks set to hit a road bump in coming months. But a slowdown is likely to prove short-lived. Brazilian securitization markets have been enjoying a boom, prompting frothy predictions of double or even triple digit … Continue reading

Waiting for change

President Lula is under fire as Brazil struggles to capitalize on unprecedented bullish operating conditions. Cracks in the macro story are spreading. Photographs of the fireball that engulfed TAM flight JJ 3054 and the grim wreckage of the July 17 … Continue reading

ABN Tussle Rattles Brazil Banks

The sale of ABN AMRO spells tougher competition and a possible round of takeovers in the Brazilian bank market, which has not seen change at the top in years. The battle to acquire ABN AMRO becomes increasingly complex but the … Continue reading

Petrobras develops new financing techniques

In March 2001, P-36, a platform owned by Petrobras, Brazil’s state-owned oil company, sunk off the coast. Critics claimed that slipshod management and a drive for profit were to blame. The company’s cost of financing and risk coverage shot up … Continue reading

WORLD NEWS: Weakening dollar pulls in Ecuador

August 30, 2007

The money changers are clustered on the corner of the Parque Isidro Ayora in the Ecuadorean border town of Tulcán. Under the morning drizzle, six of them are tapping furiously into book-sized calculators and peeling off thick wads of dollars. … Continue reading

Brazil looks to controls (OpRisk)

August 1, 2007

New legislation in Brazil on banking systems and controls has triggered a flood of sales from large accountancy firms and specialist service providers. John Rumsey looks at the new rules and how Brazilian banks are responding Brazilian banks had until … Continue reading

WORLD NEWS: Brazil claims cotton victory

July 28, 2007

Brazil yesterday claimed victory in its latest assault on US cotton subsidies at the World Trade Organisation, underscoring warnings by the Bush administration that the subsidy-laden farm bill under consideration by the US Congress risks triggering a wave of trade … Continue reading

WORLD NEWS: Brazilian minister sacked following air crash

July 26, 2007

President Luiz Inácio Lula da Silva of Brazil yesterday sacked his defence minister, Waldir Pires, the formal head of the country’ s civil aviation system, after last week’ s air crash at São Paulo’ s Congonhas airport. His government is … Continue reading

Staffing concerns rise in Brazil

July 2, 2007

Brazil’s equity markets are booming, with many IPOs, but investor interest may have peaked and finding staff is a real headache. John Rumsey explains. Recently, a senior analyst covering Latin America was lured by an investment bank from New York … Continue reading

Brazilian equity markets: the sky

June 19, 2007

Capital markets boom widens, boosting economy

Brazil

The Brazilian diaspora comes home.

June 15, 2007

Lourenço Miranda got repatriated soon after his wife dropped a bomb-shell: she was expecting triplets (two girls and a boy as it turned out); Renata Coutinho and Karina Manasseh came back in part because they wanted to get more hands … Continue reading

How Ita

Service, quality of products and services, price, social responsibility and deep commitment to the environment and ethics. Brazil’s high flyers are a picky lot when they opt for a bank, surveys find. Banco Itaú delivers on these eclectic areas and … Continue reading

Ethanol strategies re-considered as asset prices surge

June 1, 2007

Brazil’s ethanol market leader Cosan recently did a whopping U-turn on strategy that says a lot about the over-heated market for ethanol. The firm rushed out announcements that it was going to shift from an acquisitive strategy to one that … Continue reading

PPP projects: slow progress

News that the Federal government of Brazil is about to sign off on its first Public Private Partnership (PPP) project was greeted with a mixture of relief that at last something was getting done and the suspicion that wrangling between … Continue reading

Securitisation markets open wide

May 15, 2007

Tapping into the huge and under-served housing market is the next challenge for Brazilian banks. How that will be funded is the burning question for bankers. Brazil’s mortgage market is tiny. Mortgages represent just 2% of GDP compared to 16% … Continue reading

Investment banking steams ahead

Recently, a senior analyst covering Latin America was lured by an investment bank from New York to São Paulo. The analyst may not have seemed an obvious choice for a position in the Brazilian banking capital being neither Brazilian nor … Continue reading

Brazilian banks enjoy heady days

Getting in the family

May 1, 2007

Godoy: technocrat takes the helm at the Brazilian Treasury.

April 19, 2007

Investors and bankers are starting to shape opinions on Tarcísio José Massote de Godoy, the interim secretary of Brazil’s National Treasury since January, the third to hold the position over the last year. They like his in-depth knowledge of the … Continue reading

Brazil Salaries Overtake New York

March 1, 2007

Brazil

February 19, 2007

How is the CBLC constituted and what are its roles? The CBLC is organised as a for-profit corporation primarily owned by market participants, which are mainly brokers and bankers. We have been independent of the stock exchange, Bovespa, since 1997 … Continue reading

SMEs see mixed fortunes across Latin America

January 25, 2007

“SMEs find themselves sandwiched between microfinance and big companies. They get neglected while the others get all the attention,” says Greta Bull, pillar manager, Technical Assistance Facility for Latin America and the Caribbean at the International Finance Corporation (IFC). She … Continue reading

Novo Mercado: The corporate governance turn-around in Brazil

January 19, 2007

In the bad old days, Brazil’s financial markets were riddled with pitfalls for the unwary, the most egregious being the shareholder structure. Companies typically issued two types of share: controller-owned ordinary shares that granted voting rights and preference shares that … Continue reading

Credit boom times in Brazil

January 15, 2007

Brazilians bemoan the fact that the first of their compatriots to make Forbes’ much-envied list of worldwide billionaires is a banker: Joseph Moises Safra, of Safra Bank. Safra’s $7.4 billion fortune nabbed him the number 69 slot on the magazine’s … Continue reading

Syndicated loans: think big

January 5, 2007

Five years ago, syndicated deals in Brazil raised on average $30-80 million. Deals that year totalled just over $12 billion. International banks were almost completely absent from the market and the few participants that had stayed in were hyper-cautious: they … Continue reading

Latin Equity: Let the Good Times Roll

December 20, 2006

As the region’s two main stock market indexes continue to reach record highs, demand for equities has been outstripping supply. Have no fear, investment bankers say. With presidential elections over in Mexico, market players are optimistic that equity issuance in … Continue reading

M&A: Brazilian markets get super-heated

December 15, 2006

Power and utilities; commodities; food, beverage and tobacco; information technology; and general retail will lead the wave of M&As over the next couple of years in Brazil. The first two categories are likely to see a limited number of big … Continue reading

Latin banks open purse-strings to upgrade anti-laundering systems

October 19, 2006

Latin and Caribbean banks are investing heavily to make up lost ground in putting together water-tight anti-money laundering (AML) systems. They are being driven by much more stringent international and domestic regulations, a closer eye from their north American counterparties … Continue reading

Petrobras: new discoveries offer prospect of strategic changes

October 15, 2006

Petrobras has discovered important new light oil deposits that significantly increase its reserves and require less refining than most of its domestic deposits. The finds will improve the company´s portfolio and could lead to further important discoveries of light oil. … Continue reading

Brazilian lending kicks off

October 12, 2006

This year’s World Cup has brought its usual economic shot-in-the-arm to Brazil. An estimated 2.9 million TV sets were bought between April and June in the run-up to the matches, a big jump compared to 1.5 million over the last … Continue reading

PPPs: new hope for Brazil

September 15, 2006

On Tuesday, August 15, Paulistanos woke up and let out a collective groan. Their fears for the day were well grounded. A planned subway strike would soon lead to crippling jams throughout the city. At its worst, the congestion caused … Continue reading

Private equity rises from the ashes

When Brazil’s TAM Linhas Aéreas airline went public in March, comparisons were made with the 2004 IPO of its arch-rival, discounter Gol Linhas Aéreas Inteligentes. Both Brazilian, both airlines, both listing on Bovespa. These two IPOs had one other thing … Continue reading

Mid-sized Latin firms are crossing borders

August 15, 2006

When large Latin American companies were squeezed by aggressive multinational expansion in their home markets in the 1980s and 90s, they began to respond in kind, moving into regional and international growth mode. Together with multinational expansion from outside the … Continue reading

Investment banks scrap for talent as competition hots up

The prize is worthwhile, as evidenced by the numbers driving the expansion. Debt issuance out of Brazil has nearly doubled from $16.2 billion in 2003 to $31 billion in 2005, according to data provider Dealogic. That leap pales in comparison … Continue reading

Brazilian banks grow; foreigners stay marginalised

May 15, 2006

A glance at the mouth-watering first quarter results released by São Paulo-headquartered institutions Banco Bradesco and Banco Itaú show why Brazil is becoming such a keenly-watched banking market. Bradesco reported on May 8 that net income had jumped 27% in … Continue reading

Latin markets: broader, deeper, pricier.

March 31, 2006

Paulistanos like to boast that if you can’t buy it in São Paulo you can’t buy it anywhere. Walk through one of the walls-just-dry shopping centres in the towering suburb cities such as Morumbi and it’s clear that conspicuous consumerism … Continue reading

Property picked as new asset class

March 15, 2006

Smart marinas and student digs, upscale hotels and doctor’s surgeries. They may not seem to have much in common at first blush but these are some of the new properties that investment managers are starting to offer to investors as … Continue reading

Fund of funds structure triumphs

Views on manager of managers are bifurcating. There’s growing disillusionment with a number of the generalists, who have been notching up a noxious combination of poor performance and high fees. They risk losing institutional clients who understandably feel peeved that … Continue reading

CVRD embarks on international expansion

January 21, 2006

CVRD (Companhia Vale do Rio Doce) is facing a rapid transformation as a booming steel industry is leaving it flush with cash. Until now, it has remained highly dependent on iron ore mined in Brazil for its profitability. But the … Continue reading

Insurers lag behind on tackling money laundering

November 15, 2005

The weakest link. That’s the new perception of the insurance industry in the battle against money laundering (ML). Recently, the industry and regulators have been waking up to the fact that significantly more laundering is going on than they had … Continue reading

World Bank Faces Crunch Time

October 21, 2005

At 61, the World Bank is facing a mid-life crisis. It’s fighting to reverse a huge drop in lending to Middle Income Countries (MICs) that is undermining its influence and role globally. Yet the battle to claw back lost ground … Continue reading

Mike Chilton: innovative newcomer in op management

October 21, 2004

Even though he is a newcomer to op risk, Mike Chilton is already putting his own pragmatic and flexible imprint on Standard Chartered’s (www.Standard Chartered.com). department. His willingness to look afresh at the area is the product of an energetic … Continue reading

Money laundering prevention faces growing pains

The Financial Action Task Force (FATF) is looking uncomfortably stretched in its fifteenth year. It’s facing up to a myriad of new responsibilities while still grappling with many of the same problems it was set up to tackle in 1989. … Continue reading

OPERATIONAL RISK & REGULATION: Fraud and economic pressure are problems for Brazil’s small banks

November 30, -0001

Seven bank interventions, including major cases of fraud, have rocked Brazil’s small- and medium-sized bank sector. Investors are calling into question everything from their business model and costs of funding through to corporate governance standards, the efficacy of their accountants … Continue reading