Capital flows to Latin America: recent developments

The external environment has deteriorated sharply as a result of the spiraling financial turmoil, and has led to a weakening in commodity prices and fears of a worldwide recession. Latin America and the Caribbean's fastest expansion in 40 years may be threatened as the global credit crunch makes financing scarce and squeezes demand for the region's commodities. This time around the region is better positioned to weather the crisis than in the past, given improvements in macroeconomic and financial policies as well as a reduced net dependency on external capital inflows. However, Latin American markets are feeling the effects of the crisis through a slowdown in capital inflows, large declines in stock price indexes, significant currency adjustments and an increase in debt spreads. Volatility has soared, with the closely watched Chicago Board Options Exchange Volatility Index moving to an all-time high of 70.33 on October 17, indicating that fear (rather than greed) has been ruling the markets.After reaching record lows in May 2007, emerging markets bond spreads are now above pre-Asian crisis levels. The JPMorgan EMBI+ Latin American composite widened by 146 basis points in the third quarter, with spreads reaching 448 basis points at the end of September. Spreads have widened sharply in recent weeks as foreign investors cut back regional exposure for the safety of U.S. Treasuries. The ongoing lack of liquidity and subsequent liquidation of assets is leading to a collapse in asset prices and a sharp widening in spreads. Daily spreads in October have risen to levels not seen since December 2002, making it much more difficult for governments that need financing to get it. Risk premiums for Latin corporates and sovereigns have risen substantially, but have remained well below U.S. junk (high-yield) bonds. Latin corporates are facing a steep rise in foreign exchange borrowing costs (although less than firms in other emerging markets), which raises concerns that refinancing risks will climb.So far, emerging markets vulnerabilities have been more focused on corporates, as sovereigns have improved public debt dynamics and countries' financing needs are under control. Market performance has been driven by the rapid deterioration of emerging markets bank and corporate market, as well as ongoing losses in emerging markets equities. From January to September 2008, the Morgan Stanley Capital International (MSCI) Latin American Index lost almost 28%, while the Emerging Markets Index lost 37% and the G-7 Index lost 24%. While in 2007 the Latin America component gained 47%, almost nine times as much as the MSCI-G7 index for developed markets, since mid-September 2008 stocks in Latin America have been doing worse than stocks in developed countries, as concerns about access to credit and the adverse impact of sharp falls in commodity prices and in local currencies contribute to increased risk aversion and to outflows of capital. Many governments in the region have used revenue from the commodity boom to pay down debt and build reserves. Now, facing a global financial crisis and the threat of recession in developed countries, the biggest question for Latin America is how long and deep this cyclical downturn will be, and how much it is going to reduce commodity prices. Prices for commodities such as soy, gold, copper and oil, which helped fund the region's boom, have fallen 28% since their July 2 high, according to the RJ/CRB Commodity Price Index. According to Morgan Stanley (in a September 29 report), should prices return to their 10-year average, Latin America's balanced budgets would quickly revert to a deficit of 4.1% of GDP. As risk aversion increases, investors are rapidly pulling out massive amounts of money, creating problems for local markets and banks. There is an ongoing shortage of dollars (as investors liquidate assets in Latin American markets), and as currencies depreciate, inflation concerns increase despite the global slowdown. In Brazil and Mexico, central banks deployed billions of dollars of reserves to stem steep currency declines, as companies in these countries, believing their local currencies would continue to strengthen against the U.S. dollar, took debts in dollars. Some companies also made bets using currency derivatives that have led to losses in the billions of dollars. Dramatic currency swings have caused heavy losses for many companies, from Mexico's cement giant Cemex SAB to the Brazilian conglomerate Grupo Votorantim. Mexico's third-largest retailer, Controladora Comercial Mexicana, declared bankruptcy recently after reporting huge losses related to exchange rate bets. As concerns about corporate exposure to dollar-denominated derivatives increases, yields on bonds issued by many of Brazil's and Mexico's leading companies have started to rise, sharply raising the cost of issuing new debt. Latin American external debt issuance came to a halt in the third quarter of 2008, totaling only US$ 690 million. The cost of obtaining loans for capital expenditures, M&A and debt refinancing is also rising substantially for Latin American corporates amid contagion from the U.S. financial crisis. According to bankers, a protracted trend of shortening tenors and widening spreads has intensified in the past few weeks, indicating that bank lending is quickly following the way of bonds and equity. Finally, money transfers from Latin American migrants are expected to decline for the first time this decade, as a result of economic downturns in the U.S. and Spain, inflation and a weaker dollar. The Mexican Central Bank announced that money transfers from Mexicans living in the U.S. dropped a record 12.2% in August. In 2008, migrants from the region will send some 1.7% less in remittances year-on-year when adjusted for inflation, according to the IADB, compounding the adverse effects of the deepening financial turmoil.

Capital Flows to Latin America and the Caribbean: Recent Developments

For six years, the global economy has been driven by the U.S. Federal Reserve’s policies of easy money. Liquidity has flowed from developed to developing economies, financing infrastructure and corporate investment and allowing consumers to indulge in credit-fuelled retail spending. Thus the effective ending of the Fed’s third round of asset purchases (QE3) at the end of October represents both a watershed and the beginning of a new stage in the world economy. The end of asset-purchases comes at a challenging time for emerging markets, with China’s economy slowing, the Euro zone struggling to avoid a recession and the Japanese economy already in recession. The unwinding of the U.S. monetary stimulus, while the European Central Bank and the Bank of Japan step up their monetary stimulus, has underpinned an appreciation by the U.S. dollar, in which most commodities are priced. An appreciated dollar makes dollar-denominated commodities more expensive to buyers, thereby creating pressure for sellers to lower their prices. Latin American markets ended the third quarter of 2014 under pressure from a stronger U.S. dollar. In this changing external context, there are many signs that a slowdown in Latin American and Caribbean (LAC) financial markets, particularly debt markets, which have been breaking issuance records for the past six years, may slowdown from now on. Commodity prices – including those of oil, base metals and some goods – are in a prolonged slump. The Bloomberg commodity price index, a benchmark of commodity investments, has fallen to a five-year low as China’s economy slows down, and with it the demand for commodities. Investment into the LAC region has decelerated, in large part because of a deceleration of mining investments. Latin American currencies have suffered depreciations, as current account deficits have widening for a number of countries. And LAC companies, having issued record amounts of foreign currency bonds may now struggle to service their debt. In October, credit-rating agency Moody’s downgraded the bonds of Brazil’s Petrobras to tow notches above speculative grade because of the impact of falling oil prices and the weaker real on its debt. Growth prospects look brighter in 2015 relative to 2014, but a strengthening U.S. dollar, uneven global growth and weakness in commodity prices are skewing the risk toward the downside for the 2015 forecasts across the region. The Institute of International Finance expects the strengthening of the dollar to have a divergent impact across the region, however, depending on trade and financial linkages. The Institute of International Finance, Capital Flows to Emerging Markets, October 2, 2014. A stronger dollar lifts U.S. purchasing power, supporting exports, growth and capital inflows in countries with close trade links to the U.S. economy. However, rising dollar financing costs will increase pressure on countries with weak external positions. Given the effects of falling oil prices and a stronger dollar, some companies in the region, having issued record amounts of foreign currency bonds, may now struggle to service their debts. Prospects of Fed rate hikes resulting in tighter global liquidity amid the rapid rise in the corporate external bond stock has indeed raised concerns over some companies. However, there is still a shortage of bonds at a global level and the region still enjoys good economic policy management for the most part, so LAC debt markets may continue to enjoy momentum despite occasional bursts of high volatility – even if not at the record levels of recent years.

Abertura de capital como estratégia de gestão jurídica e financeira de empresas do setor sucroalcooleiro

Pós-graduação em Direito - FCHS

Estimativa do custo médio ponderado de capital em produtos agrícolas

Pós-graduação em Agronomia (Energia na Agricultura) - FCA

Disseminação da informação em empresas de capital aberto e os processos de mediação da informação

Corporate governance can be understood as management mechanisms that through external and internal controls are going to reduce the distance between minority stakeholders and the control power of the company. In that context, the information management, the information mediation and the information dissemination is very necessary, because the establishment of the good communication, quick, clear and voluntary, in order to establish a confidence climate in the relation of the company with the society, creditors, and collaborators especially with investors. In Brazil, the model created by the stock exchange of São Paulo called of new market , brings in his additional conduct rules purpose to them required by the Brazilian legislation and possessed like base the equity in the handling between part, the transparency in the disclosure of information and responsibility in the installment count. This article presents some considerations about the model of information management and accountability based on legal criteria, in additional standards of information disclosure, and the information mediation process relationship the corporate governança in the business environment.

Information access law and disclosing of information by joint-stock companies in Brazil: open data and Extensible Business Reporting Language (XBRL) standard

The strategic management of information plays a fundamental role in the organizational management process since the decision-making process depend on the need for survival in a highly competitive market. Companies are constantly concerned about information transparency and good practices of corporate governance (CG) which, in turn, directs relations between the controlling power of the company and investors. In this context, this article presents the relationship between the disclosing of information of joint-stock companies by means of using XBRL, the open data model adopted by the Brazilian government, a model that boosted the publication of Information Access Law (Lei de Acesso à Informação), nº 12,527 of 18 November 2011. Information access should be permeated by a mediation policy in order to subsidize the knowledge construction and decision-making of investors. The XBRL is the main model for the publishing of financial information. The use of XBRL by means of new semantic standard created for Linked Data, strengthens the information dissemination, as well as creates analysis mechanisms and cross-referencing of data with different open databases available on the Internet, providing added value to the data/information accessed by civil society.

O desenvolvimento do mercado imobiliário e a abertura de capital desse setor no Brasil

This paper aims to present a study on the development of the real state market in Brazil. The analysis starts from the historical perspective, since the establishment of bases in that market until today's perspective, initial public offering of real state companies. In addition to this analysis, is also intended to discuss the several forms of financing real estate currently available in the Brazilian real estate market. Finally, and perhaps the most important part, analyze the IPO of 15 companies in the industry, held in 2007, notably through comparative graphical analysis, noting the factors that influence stock returns of these companies

O capital financeiro acionário e suas implicações no território produtivo do etanol paulista

Pós-graduação em Geografia - IGCE

The Effects of Trade Orientation and Human Capital on Total Factor Productivity

We study the effects of trade orientation and human capital on total factor productivity for a pooled cross-section, time-series sample of developed and developing countries. We first estimate total factor productivity from a parsimonious specification of the aggregate production function involving output per worker, capital per worker, and the labor force, both with and without the stock of human capital. Then we consider a number of potential determinants of total factor productivity growth including several measures of trade orientation as well as a measure of human capital. We find that a high degree of openness benefits total factor productivity and that human capital contributes to total factor productivity only after our measure of openness passes some threshold level. Before that threshold, increases in human capital actually depress total factor productivity. Finally, we also consider the issue of convergence of real GDP per worker and total factor productivity, finding more evidence of convergence for the latter than for the former.

Políticas sociales, cooperativas y capital social : Estudio sobre la promoción de cooperativas de trabajo en la ciudad de Río Gallegos

El presente trabajo profunda la relación establecida entre las Cooperativas de Trabajo de la ciudad de Río Gallegos promovidas por el gobierno provincial y el desarrollo de capital social de sus asociados. Se optó por este eje conductor porque se consideró que la organización cooperativa tiende a favorecer el desarrollo de este activo. Frente a las transformaciones del mercado laboral sufridas en la década del ?90, cuyos efectos persisten hasta la actualidad, las cooperativas de trabajo aparecen como una opción para la progresiva inserción en el mercado laboral formal, hecho que se refleja en el incremento sostenido de la cantidad de cooperativas de trabajo a lo largo de todo el país a partir de mediados de los 90?. En este contexto, describir la relación establecida entre estas cooperativas y el desarrollo de capital social de sus miembros, se vincula con la inclusión de esta estrategia, cuyos contenidos no siempre se explicitan, en las líneas de acción de las políticas sociales. En vista del objetivo antes mencionado y a la luz del análisis bibliográfico sobre dicho concepto, se realizaron entrevistas en profundidad orientadas a identificar los precursores de capital social puestos en juego y a examinar la distribución del stock de capital social (individual, grupal y externo) en los cooperativistas

Políticas sociales, cooperativas y capital social : Estudio sobre la promoción de cooperativas de trabajo en la ciudad de Río Gallegos

El presente trabajo profunda la relación establecida entre las Cooperativas de Trabajo de la ciudad de Río Gallegos promovidas por el gobierno provincial y el desarrollo de capital social de sus asociados. Se optó por este eje conductor porque se consideró que la organización cooperativa tiende a favorecer el desarrollo de este activo. Frente a las transformaciones del mercado laboral sufridas en la década del ?90, cuyos efectos persisten hasta la actualidad, las cooperativas de trabajo aparecen como una opción para la progresiva inserción en el mercado laboral formal, hecho que se refleja en el incremento sostenido de la cantidad de cooperativas de trabajo a lo largo de todo el país a partir de mediados de los 90?. En este contexto, describir la relación establecida entre estas cooperativas y el desarrollo de capital social de sus miembros, se vincula con la inclusión de esta estrategia, cuyos contenidos no siempre se explicitan, en las líneas de acción de las políticas sociales. En vista del objetivo antes mencionado y a la luz del análisis bibliográfico sobre dicho concepto, se realizaron entrevistas en profundidad orientadas a identificar los precursores de capital social puestos en juego y a examinar la distribución del stock de capital social (individual, grupal y externo) en los cooperativistas

Políticas sociales, cooperativas y capital social : Estudio sobre la promoción de cooperativas de trabajo en la ciudad de Río Gallegos

El presente trabajo profunda la relación establecida entre las Cooperativas de Trabajo de la ciudad de Río Gallegos promovidas por el gobierno provincial y el desarrollo de capital social de sus asociados. Se optó por este eje conductor porque se consideró que la organización cooperativa tiende a favorecer el desarrollo de este activo. Frente a las transformaciones del mercado laboral sufridas en la década del ?90, cuyos efectos persisten hasta la actualidad, las cooperativas de trabajo aparecen como una opción para la progresiva inserción en el mercado laboral formal, hecho que se refleja en el incremento sostenido de la cantidad de cooperativas de trabajo a lo largo de todo el país a partir de mediados de los 90?. En este contexto, describir la relación establecida entre estas cooperativas y el desarrollo de capital social de sus miembros, se vincula con la inclusión de esta estrategia, cuyos contenidos no siempre se explicitan, en las líneas de acción de las políticas sociales. En vista del objetivo antes mencionado y a la luz del análisis bibliográfico sobre dicho concepto, se realizaron entrevistas en profundidad orientadas a identificar los precursores de capital social puestos en juego y a examinar la distribución del stock de capital social (individual, grupal y externo) en los cooperativistas

Return of Equity Issues in the Spanish Stock Market from the Investor’s Perspective, during the 1997-2012 Period

Is it profitable for an investor, from a risk-return perspective, to acquire a stake in a quoted company when a capital increase is announced? This paper analyses the return obtained from the investment in equity issues with cash contribution and pre-emptive rights, aimed at funding corporate activities: acquisitions, investments in new facilities and/or strengthening the balance sheet of the companies undertaking the equity issue. During the 16 years covered by the study, the results show a negative average excess risk-adjusted return of almost 5%, from the moment that the equity offer is announced until the completion of the preferential subscription period. To obtain this excess return, the difference between the nominal Internal Rate of Return (IRR) and the expected return, using the CAPM, is computed for each equity issue. The intention behind this method is to eliminate the effects of time and any other possible effect on the stock price during the period of the analysis.The results from this article are consistent with the Pecking Order theory for the Spanish Stock Market also six months after the preferential subscription period. However, there is a positive return after three months.

Efectividad de las señales de compromiso de suscripción ante el anuncio de ampliaciones de capital en España

El objetivo de esta tesis doctoral es averiguar si el anuncio por parte del accionista significativo de ejercitar su derecho de suscripción preferente elimina o reduce la asimetría de información en las ampliaciones de capital con derecho de suscripción preferente en el Mercado de Valores español. Durante los 17 años analizados, encontramos que ni el anuncio de la ampliación de capital ni el tipo de aseguramiento acordado en cada ampliación tienen un impacto estadísticamente significativo en el Exceso de Rentabilidad Ajustada por Riesgo. Principalmente, el análisis realizado utiliza la información requerida por la Comisión Nacional del Mercado de Valores (CNMV) que deben aportar los accionistas significativos en el Folleto de emisión publicado con carácter previo a la ampliación. Esta investigación desglosa las ofertas en un Grupo 1, el cual incluye aquéllas en las que los accionistas significativos anuncian su intención de ejercitar su derecho en las emisiones, y el Grupo 2, que incluye aquéllas en donde no acuden o simplemente no existía información al respecto ya que no es una información obligatoria a incluir en el Folleto. Para cada ampliación de capital y para tres periodos de tiempo distintos se obtiene el Exceso de Rentabilidad Ajustada por Riesgo (ERAR) como la diferencia entre la Tasa Interna de Retorno y el Retorno Esperado, utilizando el modelo CAPM. De este modo, se trata de aislar el efecto temporal. La principal contribución de esta tesis doctoral es el hallazgo de una rentabilidad negativa estadísticamente significativa cuando el accionista significativo anuncia su intención de no suscribir la ampliación, o no existe información suficiente sobre su intención a este respecto. Adicionalmente, el análisis que se ha llevado a cabo en este estudio muestra un refuerzo estadísticamente significativo de este efecto negativo en la rentabilidad cuando existe simultáneamente una falta de compromiso por parte del accionista significativo y la ampliación no está asegurada. ABSTRACT The aim of this doctoral dissertation is to find out whether or not consideration of significant shareholders announcement of intention to exercise subscription rights makes a difference in eliminating or reducing the effects of asymmetrical information in equity offerings with pre-emptive rights on the Spanish Stock Market. For the 17 years of equity issues covered, we find that neither equity issue announcements nor the type of underwriting arrangements has a statistically significant impact on the issues’ Excess Risk Adjusted Return. The analysis uses the information required by CNMV (Spanish equivalent to SEC) to be provided by the significant shareholders in the equity issue’s prospectus. The doctoral dissertation breaks the offerings down into Group 1, in which the significant shareholders indicated their intention to subscribe, and Group 2, for which there was not enough information provided as to their intentions. For each equity issue, Excess Risk Adjusted Return (ERAR) is obtained, for three different periods, as is the difference between nominal Internal Rate of Return and expected return, using the CAPM. By subtracting the expected return from the IRR, the effect of time or any other variable influencing the stock price during the period, aside from the equity issue, should, in principle, be removed. The main contribution of this study is the finding of a statistically significant negative impact on returns either when the significant shareholders indicate their intention not to subscribe, or when not enough information is provided about their intention. We also find a statistically significant reinforcing negative effect on returns in the case of simultaneous lack of commitment on the part of significant shareholders, and non-underwritten equity issues.

ANÁLISE DAS MUDANÇAS DOS FATORES DETERMINANTES DA ESTRUTURA DE CAPITAL EM FUNÇÃO DO CICLO DE VIDA DAS EMPRESAS BRASILEIRAS

As várias teorias acerca da estrutura de capital despertam interesse motivando diversos estudos sobre o assunto sem, no entanto, ter um consenso. Outro tema aparentemente pouco explorado refere-se ao ciclo de vida das empresas e como ele pode influenciar a estrutura de capital. Este estudo teve como objetivo verificar quais determinantes possuem maior relevância no endividamento das empresas e se estes determinantes alteram-se dependendo do ciclo de vida da empresa apoiada pelas teorias Trade Off, Pecking Order e Teoria da Agência. Para alcançar o objetivo deste trabalho foi utilizado análise em painel de efeito fixo sendo a amostra composta por empresas brasileiras de capital aberto, com dados secundários disponíveis na Economática® no período de 2005 a 2013, utilizando-se os setores da BM&FBOVESPA. Como resultado principal destaca-se o mesmo comportamento entre a amostra geral, alto e baixo crescimento pelo endividamento contábil para o determinante Lucratividade apresentando uma relação negativa, e para os determinantes Oportunidade de Crescimento e Tamanho, estes com uma relação positiva. Para os grupos de alto e baixo crescimento alguns determinantes apresentaram resultados diferentes, como a singularidade que resultou significância nestes dois grupos, sendo positiva no baixo crescimento e negativa no alto crescimento, para o valor colateral dos ativos e benefício fiscal não dívida apresentaram significância apenas no grupo de baixo crescimento. Para o endividamento a valor de mercado foi observado significância para o Benefício fiscal não dívida e Singularidade. Este resultado reforça o argumento de que o ciclo de vida influência a estrutura de capital.