World’s brewers reach last call for Latin targets 1 May 2012 The Brazilian AmBev’s Q1 earnings miss may be just the start. The Anheuser-Busch unit is paying $1.2 bln for the Dominican CND, one of the region’s last available beer producers of any scale. It’s more defensive than a growth play, as competition in Brazil is set to heat up.
BTG Pactual looks fairly priced at $14 bln 25 Apr 2012 The Brazilian investment bank’s IPO values it at three times book, way ahead of U.S. rivals. Better margins, returns and comp levels justify that. But its volatile trading desks, an ambitious regional expansion drive and CEO Andre Esteves’ tight control are reasons for caution.
Brazilian billionaire banker tests investor mettle 16 Apr 2012 Just days ahead of an IPO of his BTG Pactual, Andre Esteves has been fined for insider trading by Italian watchdogs. The firm shrugged off the case and says the boss will appeal. But JPMorgan’s Ian Hannam resigned to fight similar charges. The risks look big for this high-flyer.
New bank plan risks dilution of emerging influence 30 Mar 2012 The BRICS are mulling the creation of an institution with aims similar to the World Bank. But an Emerging World Bank may diffuse the effort, capital, and talent dedicated to global economic development. BRICS may also struggle to secure their rightful influence over the original.
Brazilian billionaire buys time from Gulf 26 Mar 2012 Eike Batista may be the richest man in Latin America’s biggest economy, but he runs a cash-hungry empire. His sprawling oil and mining group is in its infancy. The $2 bln infusion of patient Abu Dhabi money should help Batista try to make good on his promise.
Chevron’s criminal scrape may backfire on Brazil 21 Mar 2012 A prosecutor in Brazil is chasing the oil titan for a spill about 0.1 percent the size of BP’s Gulf gusher. This over-reaction may reflect one lawyer’s ambitions. Still the fact that Petrobras has escaped such punishment will add to worries that outsiders face a double standard.
No winners in Vale’s tax clash with Brasilia 9 Mar 2012 The Brazilian mining giant is embroiled in an escalating legal row over back taxes. The new CEO is looking more like his own man than a state functionary. But investors are right to focus more on Brasilia’s growing temptation to extract that pound of flesh.
Brazil is falling short of its BRIC status 8 Mar 2012 Its 2011 GDP growth of 2.7 pct suggests it’s no longer a real emerging market. The government is largely to blame. Populist mandates have bloated state spending while restrictions and meddling have increased risk. Maybe investors should downgrade Brazil from BRIC to brick.
Brazilian banking star puts $15 bln value to test 1 Mar 2012 In three short years, André Esteves has dealt his way to a six-fold increase in the price of his BTG Pactual. Wall Street can only dream of such riches. Former owner UBS must be quietly weeping. But the planned IPO will reveal just how solid the investment bank’s foundations are.
New Petrobras CEO needs to flex political muscle 10 Feb 2012 A 52 pct drop in Q4 profit shows what Maria das Graças Foster is up against. The $200 bln Brazilian energy group’s refining losses, exploration bottlenecks and swollen capex budget are more political than operational problems. Foster’s engineering skills alone won’t solve them.
Itaú’s $6.8 bln Redecard bid may depend on Lazard 7 Feb 2012 The big Brazilian bank’s offer for the 49.9 pct of the card processor it doesn’t own looks fair - but it’s no knockout. Minority shareholders may push for a sweetened price. With its money manager owning almost a tenth of Redecard, Lazard could make or break any deal.
Brazil’s oil plutocracy flexes its muscles 30 Jan 2012 A foreign offshore driller has put off its IPO to appease corporate concerns of state-owned giant Petrobras. Meantime, the country’s richest man, Eike Batista, is set to extract his first barrel after navigating the bureaucracy in record time. Brazil’s oil winners keep winning.
New Petrobras CEO has it all – except independence 23 Jan 2012 There’s plenty for shareholders to like about Maria das Graças Foster becoming the oil giant’s boss. A veteran engineer, she has the qualifications needed to help boost output. But her close friendship with Brazil’s president reinforces the company’s subordination to the state.
Brazil’s Itaú is the bank to watch next year 23 Dec 2011 It bills itself as “The Global Latin American Bank.” Thing is, it’s not - or at least not yet. But solid finances, determined management, a robust stock-market value and a wealth of opportunities from the misfortunes of others could make Itaú’s bold ambitions come true in 2012.
Mercosur searching for alternatives to Adam Smith 23 Dec 2011 With members led by leftists, it’s not surprising the Latin trade bloc is raising tariffs and promoting anti-market policies. Mercosur has lots of commodities but relatively uncompetitive manufacturing, even in Brazil. One risk of economic experimentation is a return to poverty.
Supersized IMF not just for little guy bailouts 9 Dec 2011 Europe’s promise to lend another $270 bln takes the fund’s pot over $1 trln. The move also raises the chance of fat contributions from the BRICs, who have insisted on more euro zone self-help. The muscled-up fund may soon have the scale to help rescue big nations like Spain.
BRIC success shows the power of a good idea 28 Nov 2011 Goldman’s Jim O’Neill invented the acronym for the leading emerging markets 10 years ago. What started as a good economic theme became a state of mind – the embodiment of a global power shift. So far, so good, but at least one BRIC is likely to disappoint in the next decade.
Sinopec’s M&A strategy gets a little smarter 11 Nov 2011 The Chinese oil major’s $5.2 billion investment in Brazilian oil resembles a deal it did last year – but at 20 pct less per barrel. Non-financial considerations explain some of the difference. But state-owned Sinopec appears to be learning more tricks of the M&A trade.
Brazil won’t solve all of TNK-BP’s problems 2 Nov 2011 The Anglo-Russian venture’s $1 billion deal to explore for oil in the Amazon is its most significant international foray. TNK-BP needs to diversify away from Russia, where its mature fields are declining. But such expansion is only a partial solution to its strategic dilemma.
Brazil’s corruption best tackled on soccer field 27 Oct 2011 Losing the minister of sport to scandal seems the least of President Dilma Rousseff’s worries amid an increasingly troubled coalition. But it may be a symbolically significant opportunity. Restoring broader trust could start with soccer, Brazil’s epicenter of national pride.