Archive for the ‘Region: South America’ Category

Overview of Brazilian Investment Banks – Market Realist

Wednesday, February 27th, 2013

According to Market Realist’s Emerging Market’s Analyst:

In a previous article we reviewed the main Brazilian Retail banks to give investors in EWZ some background on MSCI Brazil Index’s 25% exposure to the Brazilian financial sector.  This article will focus on the domestic investment banks.

Santander and HSBC occupy the #6 and #7 spots in the Top 10 Brazilian Banks by assets, with shares of 8% and 3% respectively.  Other major foreign banks such as Citi, J.P. Morgan, Credit Suisse and Deustche Bank are small market players in the retail banking arena, each with shares between 0.5% and 1% of the total banking assets.

While most of these banks are not leaders in the Brazilian retail banking landscape, all these foreign banks are part of the top 10 banks by investment banks by fees for Latin America (consisting mainly of Brazil and Mexico).  This classification includes fees for M&A (merger and acquisitions advisory), loans (credit lending), DCM (debt capital markets, i.e., bonds) and ECM (Equity Capital Markets, i.e. stock issuance).

The local Brazilian investment banks

The only local banks within the top 10 investment banks are BTG Pactual (leading the table), Itau BBA, and Santander BBI.  The table below shows the league table rankings as of Aug 2012:

BTG Pactual has an interesting story and has been referred to by some as the Goldman Sachs of Latin American or its “tropical version”.  The bank was sold by Brazilian investment banker Andre Esteves to UBS in 2006 for US$3.1bn when he was just 37 years old.  Three years later he bought it back for USD2.5bn when UBS hit a rough patch during the financial crisis.  Pactual currently has a joint venture with Caixa Economica Federal that jointly owns Banco PanAmericano.  This is BTG Pactual’s first acquisition of a retail bank.

Itau BBA, the investment bank arm of Itau Unibanco Holding, was created in 2002 when Itau acquired Banco BBA-Creditanstalt in 2002.  In 2011 it achieved third place in the Top 10 Brazilian Investment Banks table; as of August it was placing fourth for 2012.  Earlier this year it received the Best Investment Bank for Brazil 2012 Award by Euromoney.

Bradesco BBI was #7 in the Top 10 table for 2011 and so far this year its holding the #8 spot, followed closely by foreign banks Santander and HSBC.  Earlier this year it also received the Best Investment Bank – Brazil 2012 Award, this one was awarded by Global Finance.

For more information, please visit Market Realist’s emerging market section: Emerging Markets

Chavez is the New Mother Theresa?

Thursday, March 3rd, 2011

Since when can Chavez promise world peace?  The dictator in Venezuela has confiscated billions worth of private interests, has nationalized industries, and has ruled with an iron fist over his country for years, exploiting its oil wealth.  He has done so poorly, that he has had to de-value his currency multiple times, despite the oil revenue Venezuela generates.  In an interesting turn of events, Chavez made a call to another dictator, Qaddafi, calling for an end to the riots in Libya.  ”We want world peace!” he said.

Did Chavez win here, where Obama, the UN, and the  entire developed world failed?  Did WTI crude oil fall from $103 to $101 on Chavez’s remarks?  Of course not, it was temporarily overbought.  Let’s wait until the Rage Riots in Saudi Arabia on March 11th to see oil’s true color.  (Beware the ides of March? Unfortunately, doesn’t fall on the same date)  Here is a response from the Arab league:

“A proposal by Venezuela’s president to solve the current crisis in Libya does not include a clear plan, Hisham Youssef, assistant Arab League secretary, said on Thursday.

On 17 February, a popular uprising erupted In Libya against the regime of Libyan leader Muammar al-Qadhafi, who has been in power for 42 years. Thousands of protesters have been reported dead during the clashes with pro-Qhadafi forces.

President Hugo Chavez had suggested an international mediation delegation of representatives from Latin America, Europe and the Middle East be sent to Libya in a bid  to hash out a peaceful resolution through negotiations between protesters and Qadhafi’s regime.

Youssef said Venezuela’s foreign minister phoned Arab League Secretary General Amr Moussa to introduce Chavez’s proposal and that Moussa described the ideas as vague.

“There were no definite ideas, we need to know the basis for the suggested negotiations and where to start them”, Youssef told Al-Masry Al-Youm.

Youssef said the Arab League’s stance on the Libyan crisis was expressed on Wednesday during a meeting of Arab foreign ministers. “This crisis should be handled in  a way that responds to the aspirations of the Libyan people, and not only from a security perspective,” he said.”

So, Chavez certainly our new Mother Teresa.  In honor of this public servant, here is a short biography below:

Mother Teresa (26 August 1910 – 5 September 1997), was a Catholic nun of Albanian ethnicity and Indian citizenship, who founded the Missionaries of Charity in Calcutta, India in 1950. For over 45 years she ministered to the poor, sick, orphaned, and dying, while guiding the Missionaries of Charity’s expansion, first throughout India and then in other countries. Following her death she was beatified by Pope John Paul II and given the title Blessed Teresa of Calcutta.

P.S. WTI crude is back at $102.50 at 10:25 PM EST, March 3, 2011.

Most Common Face in the World – National Geographic

Thursday, March 3rd, 2011

National Geographic Magazine released a video clip, below, showing the most “typical” human face on the planet as part of its series on the human race called “Population 7 billion.”

The researchers conclude that a male, 28-year-old Han Chinese man is the most typical person on the planet. There are 900 million of them.  No wonder I see so many on Wall Street.  The Chinese are showing prowess both at home and abroad!

The image above is a composite of nearly 200,000 photos of men who fit that description.

Don’t get used to the results, however. Within 20 years, the most typical person will reside in India.

A similar resource exists for the most common female faces in the world. According to UK Daily mail, these are the average faces of women from 24 different nations, all quite beautiful. Observations here include that Peruvians and Iranians have bigger mouths, Ethiopians and Samoans have curlier hair, and fringes seem to be big in Latvia and Poland.

Some anomalies can be explained by how the pictures were compiled. The prevalence of mousy hair is a result of blondeness being easily ‘diluted’.

South African Photographer Mike Mike – who inspired the images with a web project called The Face of Tomorrow compiling the faces of various cities – explains: ‘Blonde hair gets lost pretty quickly when you start averaging.

‘You’d need a population 75 per cent blonde to get it visibly remaining. You’d probably have to go to Iceland for that result.’ Please see their pictures below:

Check out our intensive investment banking, private equity, and sales & trading courses! The discount code Merger34299 will be activated until April 15, 2011. Questions? Feel free to e-mail thomas.r[at] with your inquiries or call our corporate line.

Soros Backs Sugar in Latin America

Tuesday, February 2nd, 2010

Brazil Sugar
So it seems as though even Soros has a sweet tooth like Mr. Buffett…although he is more interested in rising sugar prices than an occasional Cherry Coke…
Soros, the legendary founder of the Quantum Fund recently invested in a venture called Adecoagro, which focuses on energy and agricultural investments in Latin America.  This week, the fund considered an IPO to fund sugar projects in Brazil.  According to a Bloomberg interview with, the company’s Director Viera said:
“We never had difficulties in raising capital from shareholders, but if market conditions are attractive, we could go for an IPO, why not?  The sugar and ethanol sector in Brazil is thriving so we decided to focus our new investments here.”

The Adecoagro venture owns and leases about 840,000 acres of farmland in Argentina, Brazil and Uruguay.   Here, it grows agricultural commodities including coffee and soybeans.  Adecoagro is also the largest rice grower in Argentina.  This is certainly a play on food scarcity and price appreciation in the near future.  It is surprising to the LA Team, however, that ethanol production is still rising in these parts.  Land prices have skyrocketed in the area along with commodity prices.  It seems as though these prices are here to stay for the near to medium term.

According to Bloomberg, companies that include Royal Dutch Shell Plc also are expanding into ethanol in Brazil.  According to a reporter, Adecoagro operates two mills, one in Minas Gerais and the other in Mato Grosso do Sul state.  One unique aspect of the mills is that they also produce energy from cane waste, which is known as bagasse.

Soros currently owns 30% of the venture.  To date, Soros has built a fortune of over $11 billion, according to Forbes magazine.

According to Bloomberg, “Sugar prices have more than doubled in the past year because of a global deficit after above-average rains in Brazil and a drought in India pared yields. German research company F.O. Licht revised its deficit forecast today to 8 million tons in the season that began in October, from 6 million tons forecast on Nov. 17.

Prices should ease after Brazil starts harvesting in March, Vieira said. He said prices are set to remain above 20 cents a pound during 2010.”


For more information, please visit Bloomberg…

Venezuelan Inflation to reach 45%!

Wednesday, January 20th, 2010


According to Morgan Stanley,  inflation is set to rise to 45% for Venezuela in 2010.  This is after President Chavez cut the value of the Venezuelan currency by 50% months before the country’s reelections.  Depreciating Venezuela’s currency will boost the socialist state’s revenues, while spurring price instability.  Already, prices soared 25% in 2009.

Chavez said in an unprecedented speech that the bolivar would have two levels, a rate of 2.6 per dollar for food and health essentials and a 4.3 petro-dollar rate for everything else.  This depreciation could affect Chavez’s ratings amongst the country’s 28 million residents if it sparks political tensions.  The impact of this devaluation will severely impact Venezuela’s trade partners, especially Colombia.

Venezuela also devalued its currency in 2005 from 1,920 bolivars to 2,150 bolivars per dollar.   In 2006, inflation climbed to 103%.  However,  in 2008, it re-denominated the currency, ignoring the three zeros at the end of it!

In the short term, the value may help the country pay of its near term debts by increasing the revenues generated by oil exports.

For more information, please see Bloomberg…