Brazil’s benchmark Bovespa equity index has more than quintupled since July 2002. However, a growing number of investors is braced for a correction.
Category: 2007
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Future Hinges on Politics
Future Hinges on Uncertain Politics
Mexico’s President Calderón must defeat the very forces that swept him into office – the business community – to solidify his administration and spur an economy that struggles to grow by 3%.
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Shelter from the Storm
Shelter from the Storm Issuers and investors in structured credit are guardedly optimistic that local markets will weather the US sub-prime storm. Several weeks into a bout of choppiness exacerbated […]
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ABS Seen Hitting a Bump
Brazil’s fast-growing market for securitization looks set to hit a road bump in coming months. But a slowdown is likely to prove short-lived.
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Goldman Returns
Goldman Sachs has brought its considerable firepower back to Latin America. Competitors say it is too late to the game and question its longer term commitment.
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Shifting to Asset Management
For many years, Latin American countries were known for external debt management,
both good and bad. Many face a new challenge – managing rapidly increasing reserves.
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Acquisition Finance:
Latin American Mergers & Acquisitions (M&A) activity has been continuously increasing over the past years. Either through friendly buyouts or hostile takeovers, Latin American entities have been acquiring companies, financial institutions, or specific assets in the region and worldwide.
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IDB Pushes Private Sector
Repositioning the IDB to better address private sector needs is underway. IDB president Luis Alberto Moreno must produce results quickly to validate his vision.
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Split Personality
Peru and Colombia are the darlings of bankers and investors, while Venezuela and Ecuador continue to distance themselves from the markets.
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All Roads Lead to Brazil
Brazil’s Bovespa has clearly supplanted offshore alternatives as the primary source of equity capital in Latin America. Around 80% of the $28 billion raised through 84 offerings between January and mid-August took place on the Bovespa, according to Dealogic. Argentina’s Banco Patagonia became the first non-Brazilian entity to choose the exchange for a primary listing. And there is a pipeline of issues from countries with capital controls such as Argentina and Colombia mulling primary listings on the Bovespa in coming months, says Sebastien Chatel, head of LatAm ECM at Credit Suisse.
However, as the global credit crisis deepens, the exchange remains highly exposed to the whims of foreign investors. According to the Bovespa, foreign investors bought 73.4% of the 28.9 billion reais in equity capital raised in the first seven months of 2007. The exchange was pummeled by global equity meltdown in August and it remained to be seen how much further Latin markets would fall. But Chatel saw the drop as a healthy correction in the Brazilian market and says a combination of greater risk aversion and a heavy pipeline will make investors more selective going forward.