Venezuela’s populist revolution runs out of gas 4 Dec 2015 The Andean nation has the world’s biggest oil reserves but can’t get basic goods like milk and medicine into stores. Voters will punish the inept heirs of leftist caudillo Hugo Chavez in Sunday’s legislative elections, but no quick turnaround is coming. Default is a risk in 2016.
Argentina’s vote for Macri may show Brazil the way 23 Nov 2015 The pro-business mayor of Buenos Aires has won the presidential runoff after promising to break with the unsustainable populism of outgoing leader Cristina Fernandez. He plans to push through reform in Latin America’s third-largest economy. It’s a process Brazil can learn from.
It may be Miller time for buyout barons 16 Sep 2015 If AB InBev can buy rival SAB, its U.S. arm probably will be divested. Miller’s partner, Molson Coors, would struggle to raise the $12 bln or so Breakingviews estimates it would take to gain control. That could open the brewery door for private equity to put some $6 bln to work.
Ditching Dilma would bring Brazil new problems 14 Aug 2015 Many Brazilians want to impeach President Rousseff, unpopular due to an ailing economy and corruption scandals. But any bid by lawmakers to oust her would raise political uncertainty, discouraging investors. Finding a way to get along would be a smarter option.
Mexican gusher will benefit from Brazil’s missteps 11 Jun 2015 A new discovery in the Gulf of Mexico comes just as historic energy reforms kick off that should reduce the ability of state oil company Pemex to gum things up. Brazil’s flawed handling of the massive reserves it found in 2007 provides a blueprint for what not to do.
Venezuela adds hazy Rosneft $14 bln to leaky pail 28 May 2015 President Nicolas Maduro is touting the misleading investment sum from Russia’s oil giant. Though U.S. sanctions have boosted his popularity, he can’t escape high inflation, low reserves and power shortages. A further run-up in crude prices may be one of the country’s last hopes.
Rob Cox: Bolivarian bank dream faces Andean climb 26 May 2015 Brazilian lender Itaú has pursued a strategy to create the first truly pan-Latin America financial institution. Its biggest effort to date is at an impasse. The merger it thought it cleverly struck with Chile’s CorpBanca is backfiring in ways that may cost it treasure and face.
Colombia’s economic peace dividend may be elusive 15 May 2015 Latin America’s No. 4 economy hopes for an economic boost of maybe 1 pct of GDP a year if it can reach a peace accord with leftist rebels. But as with merger deals, expected financial returns often fail to materialize. The real work only begins after signing on the dotted line.
Mexico oil sale gets $6 bln show of support 6 May 2015 A local conglomerate and private investors are offering a 35 pct premium for Pacific Rubiales. That sounds high for a company hit hard by oil’s plunge and a deal unlikely to have many synergies. But it’s a sign of confidence in Mexico’s pending, long-awaited oil liberalization.
GM miss hints at broader struggle for U.S. autos 23 Apr 2015 Restructuring, higher taxes and weaker sales in Russia and Brazil hit the carmaker last quarter. The strong dollar’s effect is more worrying, though. It hurt in Latin America, and Japanese and European rivals are gaining an advantage over Detroit’s Big Three in the U.S. market.
Petrobras poised to extract itself from deep water 21 Apr 2015 Brazil’s state oil giant is set to announce delayed results and quantify the costs of corruption. Along with new bosses and financing, Petrobras may be ready to start emerging from its murky mess. Though there is more work to be done, its home country would benefit, too.
Mexico faces hardest task kicking Latam graft 30 Mar 2015 The Petrobras kickback probe shows Brazil is getting better at dealing with corruption. A Chilean boardroom dispute highlights the role foreign pressure can play. NAFTA has helped set new rules in Mexico, but its one-party history and drug money present huge obstacles.
Elliott emits ray of pragmatism in Argentina feud 23 Mar 2015 The hedge fund and a U.S. judge say Citi can process two of the country’s bond payments, despite a court-ordered block. It’s a concession to cover the bank’s back, not a broader shift in holdout creditors’ intractable spat with Argentina. But it may qualify as progress.
U.S. sanctions help Venezuela’s Maduro, for now 10 Mar 2015 Declaring the Latin American nation a security threat helps the hapless leftist president more than it hurts, making Uncle Sam an easy scapegoat for self-inflicted economic woes. New decree powers Maduro seeks in response are more about an upcoming election his party may lose.
Winning inflation fight could salvage Dilma legacy 9 Mar 2015 Brazil’s efforts to curb inflation are taking on a Paul Volcker-like air of resolve as the central bank cranks up rates, with another hike expected. President Rousseff’s drive to fix an economy she hobbled in her first term is losing her friends but offers a shot at redemption.
Brazil water crisis heats up climate tail risks 2 Mar 2015 Sao Paulo’s drought stems from statistical hubris similar to the Wall Street models that failed to predict the 2008 financial crash. Decisions to prop up banks and markets had near immediate effect, though. Climate-related black swans are likely to prove more pernicious.
Petrobras downgrade tests Rousseff’s fiscal faith 25 Feb 2015 The Moody’s decision to strip Brazil’s state oil giant of its investment-grade rating redoubles the need for the president to support her economic lieutenants, who are trying to repair Latin America’s biggest economy. To do so, Rousseff will have to face down rising resistance.
Brazil scares away investment with Petrobras pick 6 Feb 2015 Dilma Rousseff tapped a party favorite from another state company, Banco do Brasil, to run the scandalized energy giant. Aldemir Bendine lacks oil industry experience and has been called a “puppet” of Brasilia. Brazilian assets deserve to trade at a steep discount.
Brazil must cast wider, global net for Petrobras 4 Feb 2015 The exit of CEO Maria das Graças Foster and other top bosses offers a chance to rebuild the $50 bln oil giant, and salvage Brazil’s reputation. Tapping internationally credible oil execs with a clear mandate would be the best way to start over – assuming anyone wants the job.
Guest view: Hard to spell Colombia without o-i-l 15 Jan 2015 Latam is exposed to varying degrees to the steep drop in the price of crude. Itaú economists expect Brent to rebound to $70 this year, but the uncertain outlook means Colombia has much to lose. Brazil, Argentina and Mexico can’t afford a prolonged slump. Chile is a clear winner.