Brazilian bank lending rose 1.6% in March, the fourteenth straight monthly increase, to $201 billion after rising 1.4% in both February and January. Lending has risen 30% since September 2003 when President Inácio Lula da Silva began a program of payroll loans to make borrowing more affordable by reducing the risk of defaults. The program allows workers to borrow at lower costs because repayments are deducted directly from their wages.
Category: Daily Brief
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Cemex Sells Stake in CBB
Mexican cement producer Cemex has sold its 12% stake in Chilean cement producer Cementos Bío Bío (CBB) for about $66 million. Cemex sold its 31.44 million CBB shares on the Santiago Stock Exchange to Santander Investment at the minimum fixed price of $2.08 per share. Cemex has decided to sell non-core assets in order to pay off debt after it completed its purchase of UK ready-mix concrete maker RMC for $5.8 billion in March.
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Dart Seeks Freeze on Bonds
Billionaire investor Kenneth Dart, who spurned an offer to swap defaulted Argentine bonds for new securities valued at 30 cents on the dollar, asked a US appeals court to prevent Argentina from exchanging $7 billion of government bonds for new debt. Dart hopes to seize those bonds to collect on a lower court ruling that Argentina owes him $700 million. The case is holding up Argentina’s $104 billion debt restructuring, which was scheduled to begin April 1.
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Gol and AIG Sell Stock
Brazil’s low-cost carrier Gol and its shareholder AIG Capital Partners, have raised $204.7 million with the sale of new and existing shares in the airline. Gol and an affiliate of AIG Capital, sold 14.7 million non-voting preferred shares. Gol sold 5.5 million new shares and AIG’s affiliate BSSF sold 9.2 million shares it held in the carrier. Gol, now Brazil’s third airline, went public last year in a New York and São Paulo IPO.
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Statoil Enters Gulf of Mexico
Statoil, Norway’s largest oil and gas group, has said it would pay $2 billion for the entire US Gulf of Mexico deepwater portfolio of EnCana Corporation, a Canadian oil and natural gas producer. EnCana owns a number of high quality discoveries and exploration opportunities in the Gulf, with the potential to deliver 30,000 net barrels oil equivalent per day by 2008-9. Output could be three times greater by 2012.
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Televisa Reports Results
Mexico’s largest media company Televisa posted a net profit of $54 million in the first quarter, up 21% year-on-year. Sales rose 17% to $575 million, while the company’s total debt load came in at $1.8 billion ($210 million of which is short term). Televisa also announced it has bought the rights to broadcast the 2006 World Cup, which will take place in Germany.
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Telmex’s Net Rises
Net profit at Mexico’s biggest telecom network Telmex rose 10% in the first quarter to $568 million, while revenue jumped 28% to $3.5 billion. The company’s total debts rose 54% to $9.3 billion. Telmex is taking on debt to invest in Brazil and other parts of South America. Revenues from Mexico, where Telmex controls 95% of the market, have stagnated in recent years.
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Bradesco to Issue Bonds
Banco Bradesco, Brazil’s biggest private sector bank, will sell $1.6 billion worth of 20-year bonds on the domestic market and scale back borrowing overseas. The bank will cut by more than half the $2 billion of bonds it planned to sell on international markets this year. Brazilian companies have boosted domestic bond sales as the fastest economic growth in a decade helps drive demand for local-currency debt. Bradesco’s leasing arm will issue the debt, and use the proceeds to meet increased demand for financing.
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Brazil’s External Accounts Strengthen
Brazil posted a March balance of payments surplus of $3.6 billion, even after making its first payment of the year to the IMF of $1.17 billion. The current account was $1.76 billion in surplus. The current account surplus hit a new record of $12.71 billion in the twelve months through March, equivalent to 2.05% of GDP. Profit and dividend remittances were $661 million, down from February’s $1.35 billion. The capital and financial accounts posted a $1.56 billion surplus. Total private sector debt amortizations were $800 million. FDI flows were $1.4 billion. Gross international reserves climbed to $61.96 billion, or about $38 billion in net terms.
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Chile Posts Trade Surplus
Chile posted a trade surplus of $770 million from April 1 to 15, with exports at $1.97 billion and imports at $1.20 billion. Copper exports stood at $475 million. Chile is the world’s largest copper producer, accounting for one third of global copper output.