Santander’s global blessing may be a virus curse 27 Oct 2020 Quarterly earnings at the $34 bln Spanish bank rallied, helped by booming loans in Brazil. That justifies boss Ana Botin’s Latin America growth focus. But with over half of profit from states with high Covid-19 infection rates, her global reach may not remain an advantage.
Guest view: Latin America has a Covid-19 cash gap 16 Oct 2020 Economic weakness has helped make the region’s health crisis one of the world’s worst, write former Citibank Chairman William Rhodes and epidemiologist Cristina Valencia. Even if a vaccine arrives, the recovery will demand more direct funding from the international community.
Guest view: Another lost decade for Latin America? 29 Sep 2020 The region is grappling with three challenges, which when combined pose the gravest threat seen in over a century, argues former Citibank Chairman William Rhodes. Leaders can, and must, use the Covid-19 crisis to make long overdue reforms, build institutions and expand trade.
Ecuador is willing pawn in Argentina debt standoff 20 Jul 2020 Quito will tweak voting rules in its $17.4 bln restructuring, helping creditors pressure the larger LatAm debtor to do likewise. It’s an easy change to make and would still help emerging-market borrowers avoid being held to ransom in the future. Buenos Aires should take the hint.
Argentina gets too cheeky with its creditors 8 Jun 2020 The serial defaulter wants to put its restructuring to a creditor vote, but leave room to decide later which votes count and which don’t. That would require a tweak to a common clause designed to make bond negotiations simpler. Emerging-market borrowers would be worse off for it.
Latin America puts new spin on airline distress 26 May 2020 The region’s largest carrier, Latam Airlines, has filed for bankruptcy protection weeks after rival Avianca did. It can’t bank on government bailouts and has hefty dollar liabilities, amplifying the shock of having to ground planes. The future looks a lot smaller.
Mexico cans Corona plant in unaffordable sideshow 24 Mar 2020 The country’s president held a referendum that nixed Constellation Brands’ massive brewery, as the nation faces a manufacturing pullback, rock-bottom oil prices, and a weak peso. Rigid nationalist, anti-corporate politics can be costly in normal times – let alone in a crisis.
Investors’ Brazil dream becomes nightmare 13 Mar 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.
LatAm leaders will be trapped in vicious cycle 26 Dec 2019 Protests across the region will make growth even lousier in 2020, which in turn will make people even angrier. The presidents of Chile and Ecuador are most exposed. Expect them to water down reforms in a bid to stay in office. Whether it works or not, their economies will suffer.
Pemex debt riddle stumps Mexican president 15 Oct 2019 The IMF has panned the isolationist approach AMLO, as he's known, is taking. His budget relies on the state oil giant producing cash, but Pemex needs all the pesos and dollars it can get to boost production and reduce $102 bln of debt. Without private investment, it can't add up.
Casino takes baby step on road to redemption 28 Jun 2019 The French grocer has simplified its Latin American structure. The bankruptcy of Casino’s parent company Rallye frees it to recapture some value for investors, and offloading stakes in Latam supermarkets would cut leverage. A focused French business could be an easier sell.
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.
Honeymoon ends early for Brazil’s Bolsonaro 22 Mar 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.
SoftBank whale jumps into Latin American pond 7 Mar 2019 Masayoshi Son's group is setting up a $5 bln fund to spend from Mexico to Argentina. That's a hefty bet for a region that got barely a third of that last year. It also stretches SoftBank even further. But demographics and sheer clout suggest a favorable result.
Venezuela’s Maduro caught in pincer movement 23 Jan 2019 Protesters are demanding the socialist leader’s ouster. Opposition leader Juan Guaidó has, with U.S. blessing, declared himself interim president. But a self-inflicted wound will get Maduro in the end: By tanking oil output, he robbed himself of a key means of clinging to power.
Brazil’s new president starts with the easy part 3 Jan 2019 Ex-army captain Jair Bolsonaro has fired a salvo of temporary decrees, favoring farmers over indigenous people and crimping NGOs. He may do the same to ease gun controls and start vital pension reform. But conquering Congress, which is needed for lasting change, will prove harder.
Brazil will get energy mostly right; Mexico won’t 28 Dec 2018 New regimes of opposing ideologies in Latam’s two biggest economies will wrestle with balancing 1970s-style nationalism against the need to open up to foreign and private capital to exploit their oil and gas resources. Brazil’s far-right president-elect has the better prospects.
Ghosts of Argentine past will come for Macri’s job 26 Dec 2018 The pro-business president has had to seek IMF help as he tries to steer Latin America’s No. 3 economy to health. That’s a gift to his discredited Peronist opponents. Recovery from drought and currency collapse may come too late to prevent the return of the spendthrifts of yore.
Latam oil opening demands hedged bets 2 May 2018 The region's growing receptiveness to foreign investment in its energy assets could be a dream come true for oil majors. Political winds can change, though, and there is no perfect blend of hydrocarbon potential and legal certainty. Brazil and Mexico will do better than the rest.
Review: The next fight for Latin America’s soul 17 Nov 2017 Dictators and demagogues have come and gone; progress in the region has been impressive. Still, rule of law and effective institutions still lack, Michael Reid writes in "Forgotten Continent." That makes the next steps toward prosperity harder.