By Dimitra DeFotis
The iShares Latin America 40 exchange-traded fund (ILF) fell 3.3% Monday, a sour day for global markets, and while the fund was trading higher pre-market, its year-to-date drop is an abysmal 32%.
European Pressphoto Agency
Brazilian President, Dilma Rousseff.
Here are some headlines from Latin America we’re reading:
Latin Americans are shedding their ideologies for extremes, The Economist reports. Here’s the magazine’s lagging list of explanations, which may be a contrary indicator for investors:
“Mexicans are up in arms over the disappearance and presumed murder of 43 student activists; Venezuelan streets have erupted in occasionally violent protests against the authoritarian and economically incompetent government of Nicolás Maduro; and Brazilians are calling for the impeachment of their president, Dilma Rousseff, as a result of a kickback scandal and a credit-rating downgrade.”
BRAZIL: Brazil’s currency, the real, slipped almost 3 percent Monday, while the benchmark Bovespa stock index shed about 2 percent on Monday. Reuters reports investment banks managing the initial public offering of the insurance unit of the state-controlled Caixa Econômica Federal want to delay the public offering until 2016. Proceeds from the Caixa Seguridade IPO could raise as much as 10 billion reais ($2.43 billion) to help the government plug its budget deficit. The advisors on the deal include Banco do Brasil (BDORY), UBS Group (UBS) and Goldman Sachs Group (GS). The iShares MSCI Brazil Capped ETF (EWZ) fell 4.6% Monday.
VENEZUELA: Fuel subsidies cost Venezuela an estimated $15 billion a year, and some of that cheap oil seeps over the border to Guyana. With Venezuela’s economy ravaged by shortages and soaring inflation, attention may turn from contraband escaping into Colombia to illegal oil trading in Guyana, Bloomberg reports. The added complication: A huge natural-gas and oil discovery off of Guyana’s coast has renewed Venezuela’s centuries’ old claim to nearly two-thirds of Guyanese territory, including a border area that thrives on Venezuelan fuel.
ARGENTINA: Pope to Argentines: “You Are Crazy.” See the Philadelphia Magazine story about one Argentine family’s travels through 13 countries in a VW van from Argentina to the City of Brotherly Love that earned a Pontifical rendez-vous. Wonder what kind of mileage they are getting on that 1980 Volkswagen (VLKAY) Kombi bus, and if they have any tips for executives embroiled in the Volkswagen diesel engine emissions scandal. In other Argentina news: the leading candidate in Argentina presidential election, Daniel Scioli, attempted to differentiate himself from President Cristina Kirchner by saying he wants to reduce the rate of inflation to the single digits from the current level, which may be near 25%, The Wall Street Journal reports. And shares of Telecom Argentina (TEO) fell 7% Monday after Goldman Sachs downgraded the stock. The Global X MSCI Argentina ETF (ARGT) fell 4.2% Monday.