LatAm equity funds were less harmed than other EM investors by an exodus from the asset class, according to data from EPFR Global. LatAm lost around 0.1% of assets in the second week of March, much less than most EM, where investors fretted about the loss of export competitiveness in the face of a slumping dollar. “Russia was the only one of the four BRICs (Brazil, Russia, India and China) markets to post inflows and BRIC equity Funds recorded outflows for the third time in four weeks,” says EPFR. “Flows out of Brazil country and Latin America regional funds were a minimal 0.01% and 0.02% of assets under management, reflecting the region’s close correlation with commodity prices,” it adds.
Yearly Archives: 2008
Posted inDaily Brief
New Fund Targets Brazil Renewable Energy
New York based Gemstone Capital Advisors is looking to invest in Brazil’s booming renewable energy market. The Gemstone Clean Resources fund expects to raise $200m to invest in companies of any size all over Brazil working with the solar, wind and hydro electric power, water treatment and storage sectors, fund manager Michael Hidary tells LatinFinance. The fund plans to invest 80% in stocks of publicly traded companies and 20% directly in private companies in the sector. A June launch is expected, with 6-9 months to implement.
Posted inDaily Brief
BBVA Mexico Sells RMBS
BBVA Bancomer has priced MXP1.48m in 2028 RMBS at 8.85%. Demand reached MXP3.4bn, according to a banker managing the sale. The AAA national scale-rated transaction features more than 2,000 mortgage credits originated by BBVA in Jalisco, the Distrito Federal, Mexico state, Nuevo Leon and Chihuahua. It has insurance from Genworth. Proceeds strengthen the bank’s capital base. BBVA managed the sale.
Posted inDaily Brief
SuCasita Prices MXP1.2bn ABS
Mexican mortgage lender SuCasita has priced MXP1.2bn in bonds backed by construction bridge financing. A 6-year MXP1.13bn senior tranche priced at TIIE plus 120bp, and a 6-year MXP197m subordinated tranche priced at TIIE plus 160bp. Su Casita recently extended a MXP10bn shelf for this type of ABS until 2013. The transactions are infrequent compared to the issuer’s bread-and-butter RMBS, with the most recent done in September 2006 and reopened in March 2007. Proceeds will fund SuCasita’s mortgage loan business. Ixe managed the sale.
Posted inDaily Brief
Funds Still Entering EM Debt
The latest mutual fund investor data for the week ended March 12 shows $103m (0.15% AUM) in new money allocated to EM debt funds, according to ING, which cites EPFR and JPMorgan data. “This continues to reflect greater purchases of local currency and blended fund shares, likely reflecting investors’ desire to hedge their US dollar exposure,” says ING. Hard currency funds saw redemptions of $380m (0.98% AUM) this week, from $64m of outflows the week before, it adds. Local funds meanwhile saw inflows of $339m (1.86% AUM) and blended funds recorded $144m (1.09% AUM) of new money. In the US, crossover HY funds saw outflows of $499m (0.29% AUM) down from $1.2bn the prior week, says ING.
Posted inDaily Brief
Rossi Gets Loan, Plans Share Split
Brazilian real estate company Rossi Residencial has obtained a 1-year BRL200m credit line from Bradesco. It plans to use proceeds to finance 2008-2009 expansion. The developer canceled February 28 a registration to hold a primary public offering on the Bovespa, due to market volatility. Rossi has also approved a two-for-one share split, leaving it with 157.7m shares outstanding.
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Petrobras, Mitsui in Bioenergy Joint Venture
Petrobras and Mitsui have established a 50-50 joint venture in Brazil to invest in bioenergy projects, particularly ethanol for export to the Japanese market. The new venture, Participações Nippo Brasileira em Complexos Bioenergéticos, will also pursue power generation from sugarcane bagasse. The new projects will focus on meeting Japanese demand for ethanol, says Petrobras.
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Xignux Buys Sara Lee Stake
American baked goods company Sara Lee announced plans to sell its 49.9% stake in Monterrey-based ham and cheese maker Qualtia Alimentos to joint venture partner Xignux. The amount of the deal was not disclosed, but it is expected to be completed within a month. Mexico’s Xignux operates in the electrical, automotive and food business.
Posted inDaily Brief
IFC Approves $80m Cemar Loan
The IFC has approved an $80m equivalent 8-year BRL-linked loan to Brazil’s Companhia Energética do Maranhão (Cemar) to improve and expand its electricity distribution system. This is IFC’s first BRL-linked loan for Brazil’s power sector and its first local currency disbursement to a non-financial sector company in the country. Pricing was not disclosed. IFC says the deal will help Cemar expand service in rural areas, as well as strengthen reliability and quality.
Posted inDaily Brief
Peru GDP Growth Seen Slowing: CS
Peru’s impressive expansion looks set to slow, according to Credit Suisse, which predicts real GDP growth of 6.5% in 2008, from 8.9% in 2007. The shop sees tightening in monetary policy and a less favorable global environment as slowing factors. Domestic demand growth will ease to 9% this year, down from 12% in 2007. A gradual decline in consumer spending growth in coming quarters could happen since consumer sentiment has gradually weakened since 2Q 2007. Private investment growth will also likely decelerate due to weaker domestic and global demand, says CS. Import growth will likely also fall this year in real terms, in tandem with domestic demand, but the change in net exports will still drag down real GDP growth by about 2.7 percentage points, the shop says.