Investment Managers Securities Analysts

Bermuda & Cayman

Latin American Stock Markets

Latin American Stock Markets

Source: Bloomberg
Mexico’s Bolsa Index rose as investor confidence was restored following the election of a new president and as Mexico and the US struck a deal on NAFTA.

Latin American Markets

• On July 2 the CEO of Brazil’s troubled food giant BRF SA outlined a plan for major asset sales to curb debt which ballooned after the company lost its investment-grade credit rating. BRF has struggled amid the fallout of a major food safety scandal which resulted in bans on shipments to the European Union. BRF’s share price jumped 12.3 percent on the announcement.

• On July 5 Embraer SA and Boeing Co. signed a $4.75 billion deal for a commercial-jet venture. Under a preliminary deal, Boeing will own 80 percent of the partnership and control Embraer’s commercial airplane and services business and 20 percent will be owned by Embraer. Embraer’s share price had rallied 63 percent since the initial reports of a potential tie-up in December 2017. However, Embraer’s stock fell 14.3 percent on the day of the final announcement, the biggest intraday loss in 17 years, as the deal appeared to undervalue Embraer relative to market expectations.

• On July 31 Cielo SA, Brazil’s largest credit and debit card processor, missed analysts’ expectations for Second Quarter 2018 earnings as increased competition among payment solution companies hurt margins. To compete with newcomers such as PagSeguro Digital Ltd and Stone Pagamentos S/A Cielo doubled marketing expenses in the quarter which led earnings to decline 17.8 percent from the same period in 2017. Cielo’s share price tumbled 9.8 percent on the day.

• On August 17 Brazilian meatpacker Mafrig Global Foods SA agreed to sell its US subsidiary, a key McDonald’s supplier, to Tyson Foods Inc for $2.5 billion. The news was a negative for the Mafrig shareholders because they had expected a higher valuation of $3 billion. The shares of Mafrig declined by as much as 9.3 percent on the day.

• On August 24 Argentina based financial services company Grupo Supervielle S.A reported a 57 percent drop in Second Quarter 2018 earnings relative to the same period in 2017 driven by lower Net Interest Margins (NIMs) and a rise in Non- Performing Loans (NPLs). Supervielle’s share price plunged 30.5 percent on the day.

• On September 12 Colombia’s President Ivan Duque ruled out the sale of Colombia’s biggest state-owned petroleum company Ecopetrol (formerly known as Empresa Colombiana de Petróleos) and said “Ecopetrol must remain a symbol for the country.” The government owns an 88.5 percent stake in the company. Ecopetrol rose 9.8 percent on the day of President Duque’s comments.