Latin American stocks outperforming emerging markets index

Brazil slated with top performing LATAM stocks for 2019, Chile leading the way for electric cars, Venezuelan President cuts ties with U.S. and more from Latin America

Latin American stocks outperforming emerging markets index

The recently elected Bolsonaro administration’s promises of market-friendly policies and privatization have promoted investor confidence in Brazilian markets. According to the Bloomberg article, money managers say

“Brazil is the country of the future, or of 2019 at least.“

The MSCI Emerging Markets Latin America Index is up 12% this year, outperforming the MSCI Emerging Markets Index at +5%.

LATAM index on 🔥

                                                                                                   LATAM index on 🔥

Venezuelan President Maduro cuts diplomatic ties with the U.S.

Venezuelan President Nicolás Maduro announced Wednesday that he is severing diplomatic ties with the US.

According to The New York Times, Maduro made this announcement hours after President Trump expressed his support for Venezuelan opposition leader Juan Guaidó, a 35-year old politician who swore himself in as interim President.

Associated Press reports

“Maduro said ‘Before the people and nations of the world, and as constitutional president…..I’ve decided to break diplomatic and political relations with the imperialist U.S. government.’” President Maduro has given US diplomats 72 hours to leave the country.

Chile at the forefront of clean mobility in LATAM as leader of electric vehicle transportation

Chile is now the Latin American leader in access to electric vehicles while working to revolutionize capital city Santiago’s public transport system. A shipment of the first 100 electric buses were introduced in Santiago last November, meaning Chile is now the nation with the second largest quantity of electric buses in the world, behind China.

Susana Jiménez, Chilean energy minister, told Reuters

“the government wanted electric vehicles to account for 40 percent of Chile’s private fleet and 100 percent of public transportation on the roads by 2050.”

Amazon’s long-awaited launch of Brazilian Fulfillment Center

Amazon will finally begin its in-house fulfillment and delivery network in the largest Latin American economy, Brazil.

While the company entered the Brazilian market on a small scale in 2012, Amazon found itself playing catch up with well-established local competitors. A recent New York Times article discusses the company’s small-scale presence that focused primarily on selling their Kindle e-reader and books. Amazon is now transitioning from a consumer marketplace to directly stocking and delivering goods.

The nation’s complicated tax system and logistics previously posed challenges for Amazon. However, this expansion is

“expected to intensify competition for fast delivery of goods… as [Brazil] exists a painful recession.”

Amazon’s emerging role in the Brazilian economy should help open up the market to other foreign businesses.

Scooter and bike apps offer alternative response to Mexican fuel shortage

In response to fuel shortages in Mexico following President Lopez Obrador’s fuel policy crackdown, companies offering alternative transportation services such as scooters and bikes are experiencing a recent surge in business within Mexico City. According to CNBC,

“Mobility as a Service for Latin America, a trade group representing firms such as Chinese bike-sharing company Mobike and California scooter outfit Bird, reported a spike in demand as people who normally drive scramble for alternatives.”

More growth underway for Latin America’s fintech market

Big news for Latin American fintech with Advent International’s acquisition of 51% stake of Prisma Medios de Pago: the leading payments company in Argentina, formed as a joint venture between Visa International and local Argentinean banks.

Latin America’s growing prominence for international investment has been made evident as fintech startups hit billion-dollar valuations and raise hundreds of millions of dollars.

According to a McKinsey study cited by Fintech Futures,

"In 2018, roughly half the population of Latin America was unbanked. In Brazil, about 40% of the country have no access to traditional banking services and its small businesses face a credit gap of $237 billion,”

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