Monday, February 19, 2018

Monday, Feb

By Financial Times

After the collapse of the commodity boom, South America suffered a long, hard and deep slowdown. But now growth is coming back. It may even be stepping up a gear.

In Brazil, falling inflation and a steep drop in interest rates has helped expand consumption. Colombia is enjoying the same. In Argentina, fiscal pump priming ahead of October’s crucial midterm elections is helping to goose activity. Temporary factors that weighed on growth in Chile (a mining strike) and Peru (floods) have also passed. According to Capital Economics, its GDP tracker for Latin America is now expanding at a three-year high of 3 per cent. Bring it on!

This return to growth is a blessed relief for the region. In 2015, Latin America’s $6tn economy registered no growth whatsoever. Last year, it shrank by 1 per cent. Yet the deceleration has in fact been going on far longer. Growth peaked in 2013 at 6 per cent. Since then, it has been a straight line downhill.

If it lasts, this return growth will have important political effects — especially in Argentina. For example, poverty rates there have now started to fall, as President Mauricio Macri’s economic policies start to benefit lower-income families. Sprouting “green shoots” may also take some of the rancour out of the Brazilian and Colombian presidential elections next year.

Sadly, though, that won’t be the case for all countries that have scheduled elections next year. In Mexico, abetted by the uncertainty of the... (Read More)

By Business Insider

Merval, the main index of the Buenos Aires Stock Exchange, increased 0.33%, cutting back the gains obtained as soon as it opened, after the government announced that it would lift price control on... (Read More)

By Buenos Aires Times

In most parts of the world it is agreed that from now on a country’s “competitiveness” will depend on the academic level of its inhabitants. Experts tell us that for those countries in which lots of people have university degrees or, at the very least, have learned a useful trade, the future will be bright, while others will lag further and further behind.

This view is fully shared by Mauricio Macri and his advisors. They take it for granted that Argentina’s labour force urgently needs upgrading. Like their counterparts elsewhere, they want youngsters to acquire skills that will enable them to... (Read More)

By Buenos Aires Times

Despite an unresolved deadlock with the United States on the biodiesel front, Argentina obtained some joy this week as it  regained access to the European Union after a successful challenge of Europe’s anti-dumping duties, upheld by the World Trade Organisation (WTO) last year.

On Thursday, EU member states voted to sharply downscale by the end of this month the tariffs slapped on Argentine biodiesel  in late 2013. They accepted a European Commission proposal to... (Read More)

By Bloomberg

Where in the world can you get more than 11 percent from bonds since June and 41 percent from bank stocks this year, with inflation evaporating as the gross domestic product and currency strengthen? That would be Argentina, a financial integrity scofflaw for most of the past century, now bringing a bonanza to global investors.

Since he was elected president almost two years ago, former Buenos Aires Mayor Mauricio Macri is delivering on his promise to reverse the runaway cost of living and peril of default. He ended currency, price and trade controls and plans to... (Read More)

By Barron

Argentina under free-market reform President Mauricio Macri is attempting to reverse more than a decade of inward-looking leftist protectionism. Although inflation has proved tough to tame and growth hard to come by, there are definite signs of progress.

The country’s inflation rate is now expected to tumble from roughly 40% in 2016 to 20% this year and then to half that in 2018. Gross domestic product is forecast to expand by 2.7% in 2017, versus a decline of 1.9% last year, according to the World Bank.

And the government’s return to the international bond market was met with gusto after it resolved payments on defaulted debt in 2016, though Argentina’s debt rating remains in the junk category. Argentina now constitutes 3.4% of the J.P. Morgan Emerging Markets bond global diversified index, having raised $32 billion since April 2016. That excludes another $21 billion raised by companies and quasi-sovereign issuers. The country’s stocks remain in MSCI’s frontier category, but that hasn’t prevented the Global X MSCI Argentina exchange-traded fund (ticker: ARGT) from jumping 35% in 2017.

A key test of where Argentina is headed will come at election time in October. Leftist populist and former president, Cristina Fernández de Kirchner, is running for a seat in the Senate, opening the way for a possible presidential run in 2019. The push away from socialism, however, appears inexorable.

Dallas-based hedge fund manager Highland Capital Management is all in with the change. The firm was one of the largest investors in defaulted Argentine debt and profited from its eventual repayment. Highland last year expanded its provincial debt and equity holdings and this summer purchased a hedge fund with an estimated $80 million in Argentine equity and debt assets. We recently chatted with Mauro Staltari, a Highland analyst covering Latin America, who believes Argentina’s stocks have more room to run as the country catches up with its Latin American peers.

“Argentina is the trade of the decade, and it has just begun,” says Staltari of his home country.

STALTARI FAVORS DOLLAR-DENOMINATED bonds in provinces aligned with the government. In equities, some of his picks are up more than 50% in U.S. trading this year. But he still favors financials in light of low consumer credit penetration and declines in inflation, and he likes utilities as tariffs gradually move toward market prices and improve profitability.

Among his picks are Banco Macro (BMA) and Grupo Supervielle (SUPV), which should benefit from improved loan demand. He also likes BBVA Banco Frances (BFR), which has underperformed peers, and has “room to improve.” Staltari recommends utilities Transportadora Gas del Sur (TGS) and Empresa Distribuidora y Comercializador Norte (EDN), as well as Pampa (PAM), an integrated electricity and oil and gas producer.

Buyer beware: The government’s slow pace of fiscal consolidation means elevated financing needs over the next two years, and that makes markets vulnerable to a reversal in... (Read More)

By Los Andes

Sin prisa pero sin pausa los cultivos orgánicos siguen avanzando sobre la superficie productiva del país y Mendoza. 

Esta realidad quedó plasmada en un informe titulado “Situación de la Producción Orgánica en la Argentina durante 2016” realizado por el Servicio Nacional de Sanidad y Calidad Agroalimentaria (Senasa).

De acuerdo con esta entidad la superficie total en el país cosechada de productos orgánicos aumentó 11% respecto de 2015, y las exportaciones totales de productos orgánicos crecieron 8% en comparación con 2015. 

En líneas generales, en el concierto nacional, en Mendoza, de 10 mil hectáreas bajo seguimiento de certificadoras orgánicas, 80% está destinado a... (Read More)

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