Investment Managers Securities Analysts

Bermuda & Cayman

Latin American Stock Markets

Latin American Stock Markets

Source: Bloomberg
Brazil’s Bovespa Index rose as investor confidence was upbeat following the election of a new president.

Latin American Markets

• On October 8 Jair Bolsonaro, a far-right former Army captain, took a huge lead in the first round of Brazil’s presidential elections as voters enraged by years of recession, corruption scandals, and soaring crime rallied around his strongman message. Bolsonaro secured 46 percent of the votes in the first round of elections against leftist Fernando Haddad who received 29 percent of the votes. Throughout his campaign, Bolsonaro said he wants the Brazilian central bank to be more independent and to privatize staterun companies. He also promised to take a tough stance against corruption. Bovespa, the Brazilian stock index, rose 4.6 percent due to Bolsonaro’s market friendly stance.

• On October 29 incoming Mexican President Andres Manuel Lopez Obrador, the leftist who calmed investors with his initial market-friendly approach, scrapped the US$13 billion Mexico City airport project after 70 percent of the 1.07 million people who participated in the national referendum voted against the airport. Mexican Bolsa, the Mexican stock index, fell by 4.2 percent after the nation’s biggest infrastructure project was scrapped.

• On November 1 Ecopetrol, the largest and primary petroleum company in Colombia, missed the earnings estimates for Third Quarter 2018 due to higher than expected exploration and tax expenses. The company has been hit by inflation, limited reserve life, and few signs of production growth. The stock was down 7.4 percent in Bogotá.

• On November 8 Cielo SA, Brazil’s largest credit and debit card processor, announced that they will be cutting prices to new clients to match competitors such as PagSeguro Digital Ltd and Stone Pagamentos SA. Cielo’s share price dropped 9.6 percent on the news.

• On November 8 Mexico’s incoming President Andres Manuel Lopez Obrador introduced legislation to dramatically slash the fees banks can charge clients. The bill would eliminate or curb what banks can charge for things including ATM withdrawals, late payments on credit cards, inter-bank transfers, minimum amounts for credit card terminals, and cashiers’ checks. Mexican Bolsa (MEXBOL), the Mexican stock index, fell by 5.8 percent on the day.

• On December 10 an appeals court in Brazil overturned an order blocking a proposed $4.75 billion tie-up between US aerospace giant, The Boeing Company, and the commercial aviation business of Embraer S.A. The ruling suspended a previous decision from the lower federal court that prevented the outgoing government to take any “concrete acts” on the deal. The deal was announced in July 2018, whereby, Boeing is to take an 80 percent stake in Embraer’s commercial business. The shares of Embraer rose 2.0 percent after the ruling.