Brazil

Fintech superstars face brutal financial comedown

3 June 2020

Digital banks like Chime and Monzo have millions of customers but are tackling their first big crisis with scant revenue. Online lenders from Kabbage to Klarna face rising defaults, less new business, and funding concerns. Valuations, business models, even survival, look shaky.

Brazil’s finance minister: right place, wrong time

4 May 2020

Chicago-trained Paulo Guedes helped achieve needed pension reform and topped privatization goals. But Covid-19 torpedoed plans to shrink the state’s role in the economy, and presidential chaos has undermined his efforts. His agenda is mostly dead, so he’ll probably jump ship.

Investors’ Brazil dream becomes nightmare

13 March 2020

The former market darling’s currency has shed over 16% of its value versus the U.S. dollar this year, and its stock market is among the worst-performing in the world. Its trade position is weakening. And neither Brazil's central bank nor its president have good policy options.

Vale dam cleanup hints at miners’ rising ESG bill

21 January 2020

The world’s top iron ore producer faces criminal charges for a deadly 2019 dam collapse. It has spent billions on reparations and safety upgrades, and seen its share price stumble. The total financial hit is yet to become clear, but other resources firms will face reckonings too.

Trump’s soybean dream can be crushed

8 January 2020

The U.S. president says China could soon buy as much as $50 bln in farm products from American farmers, including more of the oilseed. But the U.S. doesn’t have the beans, and Brazil’s currency offers a better value. The weakened U.S. agriculture trade could struggle to return.

Brazil’s $15 bln brokerage IPO is so retro

11 December 2019

Upstart XP is the year’s fourth-largest U.S. listing. It can still charge real fees in its cozy market, just like U.S. brokers in the good old days. Falling rates should keep new customers coming. And Brazil looks less prone to the competitive havoc that beset American peers.

Dearth of oil bids is mostly about Brazil, not oil

7 November 2019

Landmark auctions for offshore deposits elicited virtually no international interest, with state-run Petrobras putting up most bids. Oil market ructions are making global majors think twice about big investments. But the main problem is Brasilia’s inability to stop meddling.

Brazil’s basket-case telco is not quite dead yet

7 November 2019

Oi, the country’s largest fixed-line carrier, has been making investors kvetch for years. Rivals are now sniffing around its assets. An upcoming earnings report is likely to show the company, crawling out of a restructuring, needs more than a cash infusion. It needs a miracle.

Macri’s likely defeat a warning to LatAm reformers

25 October 2019

Argentines are expected to oust would-be reformer Mauricio Macri in Sunday’s elections, which follow weeks of violent protests across the region. In the post-commodity-boom era, Latin American reformers need to find a new identity that is neither leftist nor too austere.

Viewsroom: WeWork’s future may lie in China’s past

24 October 2019

Beijing-based Kr Space switched from renting out space held on long-term leases to selling services after the shared-office market crashed. Following suit may help WeWork stem losses. Also: climate change and Canada’s election. Plus: the gloomy IMF and unrest in Latin America.

Bolsonaro’s epic pensions victory may be his last

23 October 2019

Brazil’s president has secured a budget-saving $195 bln overhaul of the country’s retirement program. It’s a success that eluded plenty of his predecessors. But the far-right leader’s low approval ratings and endless controversies may make tax and spending reforms a tougher slog.

Guest view: Finance can put out rainforest fires

17 September 2019

The burning Amazon has sparked international concern, tension between Brazil and Europe, but no solutions. One remedy, argue execs at the Coalition for Rainforest Nations, is for big firms to pay landowners to keep the forests and use the investment to offset their own pollution.

Telco M&A gets rare regulatory boost in Brazil

16 September 2019

The country may treat operators including Oi, which is in bankruptcy protection, with a lighter touch. That gives local units of Telefonica and Telecom Italia reason to pounce. Official support for M&A is a welcome relief from the constraints facing their European parents.

UBS Brazil JV would avoid repeat of disaster movie

9 September 2019

The Swiss lender may pool investment-banking resources with Banco do Brasil, a decade after selling BTG Pactual in a crisis-induced hurry. Contributing cross-border skills while the local bank takes balance-sheet risk should boost UBS's profile – and minimise political dangers.

Growing money on trees beats fossil-fuel returns

30 August 2019

Reforestation improves the management of water, soil and crops as well as storing carbon. It can also yield investment returns higher than Exxon and most of the other top 100 emitters of greenhouse gases manage. Especially with the Amazon rainforest ablaze, it merits top billing.

Climate-denying magnate stoked potent opposition

23 August 2019

Billionaire David Koch’s funding for anti-global warming causes helped delay a response to a mounting crisis. He died as record fires beset the Amazon. But governments, companies and investors have already consigned his belief that free markets cure all ills to the scrap heap.

Brazil’s Natura is Avon’s logical final house call

23 May 2019

An equity value around $2 billion is an ignominious end for the famous cosmetics brand. But the Sao Paulo-based buyer, which also owns Body Shop and Aesop, is probably the right one, strategically and geographically. Synergies worth more than 3 times the premium attest to that.

Engie gets the gas but without the gearing

8 April 2019

The French utility’s $8.6 billion deal to buy Petrobras’ Brazilian gas pipelines enables expansion in one of its core areas. Doing so with Canada’s CDPQ limits the extent it needs to push up its debt. That should help keep its new three-year strategy on the road.

Santander’s Latam double-down comes at a cost

3 April 2019

The bank run by Ana Botin wants to raise its return on equity to as much as 15 percent. That looks hard with the UK mired in Brexit, and Europe slowing. Allocating more capital to fast-growing countries like Brazil makes sense, but risks making the business more volatile.

Honeymoon ends early for Brazil’s Bolsonaro

22 March 2019

The far-right president is finding governing harder than firing off incendiary tweets. A Washington meetup with fellow populist Donald Trump was low on substance, key pension reform is struggling and his popularity has plummeted. Even his predecessor’s graft arrest may not help.