The Temer administration appears to have lost the communication battle. It has achieved several advances on the economic agenda, and according to Carlos Pereira, this has been achieved at a cost – in terms of cabinet appointments and budget allocations in favour of lawmakers – lower than that paid under previous presidents. All the same, mistrust prevails, with a distorted interpretation of more or less any initiative undertaken by government.
CAF tapped the international markets – Argentina raised interest rates by 100bp – Banorte and Interacciones to merge – Colombia pre-paid a bond – Brazil cuts rates – Banco Hipotecario issued a ARS6.3bn bond – Colombia’s stable outlook affirmed – Televisa’s head to step down – Venezuela to restructure USD60bn worth of debt
Nafin to return to the yen market – CFE issued a triple-tranche bond in the local market –Petrobras gets upgraded – Gerdau sold USD650mn in fresh debt – Argentina raises rates – Consumer prices to fall in Peru – The IMF might bail out Venezuela – PDVSA´s assets continue to rally – Guatemala gets downgraded – Bancolombia issued a ten-year bond
The past 15 years in Brazil were marked by retrogression in the electricity sector, with questionable investments and misguided regulations. The Rousseff administration aggravated the situation alarmingly. There was no lack of warnings from specialists. There was too little dialog and too much incompetence. More recent developments suggest that likely solutions to the sector’s woes can often come from unlikely places.
China has over the years moved to strengthen its ties to Latin America in a range of areas, and a recently proposed free trade agreement between the Asian powerhouse and Mexico could take that one step further – potentially opening up a vast new trade and capital corridor between the two regions.
Some bad ideas are often repeated, hampering productive dialogue on a country’s economic agenda. In Brazil, many people think the decline in inflation was an inevitable result of the recession. Besides this, the Central Bank was supposedly lucky because of the bumper harvests of staple crops and benign external environment, which allowed the exchange rate to appreciate. Therefore, the economic recovery now under way would have occurred in any event, because in economic terms what goes down must come up.
The Fed slows rate hikes – AT&T mulls LatAm payTV divestment – Amazon Inc. to build gigantic Mexican distribution warehouse – Mexico quake to trim GDP by 0.1-0.3% - Petrobras completes swap – Temer’s approval ratings at all-time low – Argentina outlook mixed, current account data suggests – Peru lowers policy rate for third time in 2017 – Venezuela running out of fiscal room – Chile MinFin says public spending to grow 3% in 2018
When the money runs out it’s never good, but there is a positive side. It guides the economic agenda to find better allocation and greater efficiency in public spending. In Brazil, we spend very poorly, both from the standpoint of economic efficiency as well as social justice.
Brazil’s telecom sector was one of the region’s strongest performers, accounting for about 4% of the country’s GDP last year. But it was not immune to some of the country’s broader political and economic challenges, which in recent years has led to a liquidity crunch amidst even the largest reais-driven companies. Thankfully, a more prominent drive towards reform in Brazil means that trend is starting to reverse. We speak with Adrian Calaza, CFO of TIM Brasil about the company’s impressive turnaround and the borrowing environment in South America.
A fortnightly review of Latin America's debt capital markets, covering the latest loan and bond deals, rating actions, policy and credit market developments... NAFTA negotiations refocus on labour costs – Uncertainty around Mexico’s CAT bonds following quake – Mexico gets growth forecast lift – Brazil introduces secured lending, covered bond reforms – Argentina to boost borrowing from concessional lenders in 2018 – Uruguay VP resigns ahead of fund misuse investigation – Peru plans to issue USD6bn in 2018 – Chile’s economic team resigns – Panama’s Banistmo issues fresh Eurobonds
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