Santander ― Latin America
Research Handbook
April 2014
Latin America Research
LATIN AMERICA RESEARCH TEAN
Jesus Gomez
Head of LatAm Research &
Equity Strategy
Agribusiness
Education
Food & Beverage
Oil, Gas &
Petrochemicals
Retailing
Strategy
Christian Audi
Bruno Giardino, CFA
Luis Miranda, CFA
Christian Audi
João Mamede
LatAm Equity Strategy
Gustavo Allevato
Daniel Gewehr
Andres Soto
Gustavo Allevato
Bruno Taveira
Walter Chiarvesio
Reinaldo Santana
Andres Soto
Jesus Gomez
João Mamede
Mauricio Serna
Bruno Taveira
Mauricio Serna
Ronaldo Kasinsky
Ronaldo Kasinsky
Capital Goods
Electric &
Other Utilities
Healthcare
Pulp & Forest Products
Telecom, Media &
Technology
Daniel Gewehr
Maria Carolina Carneiro
Daniel Gewehr
Alex Sciacio, CFA
Valder Nogueira
João Noronha, CFA
Luis Miranda, CFA
João Saad
Nicolas Schild
Felipe Reis
Rodrigo Ordoñez
Bruno Mendonça
Mauricio Serna
Thiago Silva
Walter Chiarvesio
Bruno Giardino, CFA
Francisco Echeverria
Financial | Banks
Financial | Non Banks
Metals & Mining
Toe Matsumura /
Fabiola Gama
Boris Molina
Felipe Reis
Andres Soto
Jose Antonio Parra
Henrique Navarro
Nicholas Schild
Walter Chiarvesio
Coverage List
Renata Cabral
Walter Chiarvesio
Brazil
Daniel Gewehr
João Noronha, CFA
Chile
Walter Chiarvesio
Cement &
Construction
Renan Manda
Rodrigo Ordoñez
Argentina
Francisco Errandonea
Rodrigo Ordoñez
Reinaldo Santana
Stefano Rizzi
Alex Sciacio, CFA
Rodrigo Ordoñez
Walter Chiarvesio
Real Estate
Fabiola Gama /
Toe Matsumura
Renan Manda
Jose Antonio Parra
Transportation
Francisco Errandonea
Mexico
Pedro Balcão
Hector Chavez
Ana Reynal, CFA
Arturo Espinosa
Bruno Amorim, CFA
North Andean Countries
Quant
Renata Cabral
Stefano Rizzi
Andres Soto
Corporate Access
Latin America Research
BRAZIL RESEARCH TEAM
Valder Nogueira
Head of Brazil Research
Agribusiness
Consumer Goods
Financial | Banks
Financial | Non Banks
Pulp & Forest Products
Transportation
Christian Audi
João Mamede
Henrique Navarro
Alex Sciacio, CFA
Pedro Balcão
Gustavo Allevato
Bruno Taveira
Luis Miranda
Boris Molina
Felipe Reis
Bruno Amorim, CFA
Ronaldo Kasinsky
Capital Goods
Education
Daniel Gewehr
Renata Cabral
Strategy
Healthcare
Real Estate
Bruno Giardino, CFA
Daniel Gewehr
Fabiola Gama
Daniel Gewehr
João Noronha, CFA
Daniel Gewehr
Bruno Giardino, CFA
Renan Manda
João Noronha, CFA
Jesus Gomez
Chemicals & Oil
Electric &
Other Utilities
Metals & Mining
Technology, Media &
Telecom
Felipe Reis
Valder Nogueira
Alex Sciacio, CFA
Bruno Mendonça
Christian Audi
Gustavo Allevato
Coverage List
Maria Carolina Carneiro
João Saad
Thiago Silva
Corporate Access
Latin America Research
Christian Audi (Sector Head)
New York, USA
AGRIBUSINESS
(+1) 212 350 3991 | [email protected]
Gustavo Allevato, Brazil
(+55) 11 3012 6042
[email protected]
Coverage: Cosan | Cosan Limited | São Martinho
Best Recent Calls:
Preference of Ultrapar over Cosan. Throughout 2013, we reiterated our preference for Ultrapar vs. Cosan based on the fuel distribution segment in Brazil—the
most attractive in the world, in our view—representing a much more significant part of Ultrapar’s EBITDA (close to 70%) vs. only around 30% for Cosan. Ultrapar
outperformed Cosan by close to 30% during the year.
Preference of São Martinho over Cosan. With an eye focused solely on the sugar and ethanol businesses, we also reiterated our preference for São Martinho vs.
Cosan, driven by SMO’s stronger FCF generation as well as likely higher dividend going into 2014. SMO has outperformed Cosan by almost 10% since our postCancun conference report.
Corporate Access:
Differentiated corporate access included a well-timed roadshow with Cosan’s CFO right before the company’s Cosan Day events, which included, among other news,
the information that the collapse of Cosan’s two shares into one would not happen in 2013.
Coverage List
Corporate Access
Latin American Equities
Daniel Gewehr (Sector Head)
Sao Paulo, Brazil
CAPITAL GOODS
(+55) 11 3012 5787 | [email protected]
João Noronha CFA, Brazil
Luis Miranda CFA, Mexico
Mauricio Serna, Mexico
(+55) 11 3012 5734
(+52) 55 5269 1926
(+52) 55 5269 1931
[email protected]
[email protected]
[email protected]
Coverage: Alfa | Autometal | Grupo Carso | Iochpe Maxion | Mahle Metal Leve | Marcopolo | Mexichem | Randon | Romi | Weg
Best Recent Calls:
Active portfolio rotation, with strong results. We initiated coverage of Mahle Metal Leve on July 18, 2013, with the stock gaining 21% in four months. The team
downgraded Marcopolo in January 2013 at R$6.70. After a correction of 28%, we upgraded to Buy on January 2014.
Industry benchmark reports. Daniel Gewehr has been covering Capital Goods since 2001, on both the buy and sell-side, and has a deep understanding of the
industrial chain, as can be seen in his thematic reports like Weathering the South Storm—Does Expected BRL Devaluation Offsets Weaker Sales to Argentina?
(February 11, 2014). The team recently created a one-stop-shop chart book for the sector, which offers a 360 º view of listed companies and its peers.
Corporate Access:
The best corporate access on the Street, including benchmark event Santander Capital Goods Trip. Daniel and his team have close access to management,
hosting Non-Deal Road Shows/Events (and writing reports about them) with all Capital Goods companies under Santander’s coverage during 2013, namely Autometal,
Iochpe, Marcopolo, Mahle, Randon, Romi, and Weg. In 2013, Daniel also conducted the Second Santander Capital Goods Trip, an opportunity to meet 21
companies/sources meetings in five days, including eight site visits.
Coverage List
Corporate Access
Latin American Equities
CEMENT & CONSTRUCTION
Toe Matsumura / Fabiola Gama
Mexico City, Mexico
São Paulo, Brazil
(+52) 55 5257 8172
(+55) 11 3012 7414
[email protected] [email protected]
Andres Soto, USA
Renan Manda, Brazil
Rodrigo Ordoñez, Chile
Walter Chiarvesio, Argentina
(+1) 212 407 0976
(+55) 11 3012 6535
(+56) 22 336 3358
(+54) 11 4341 1564
[email protected]
[email protected] [email protected] [email protected]
Coverage: Ara | Cementos Argos | Cementos Pacasmayo | Cemex | Cemex LatAm Holdings | Cresud | Ferreycorp | GEO | Homex | ICA | IRSA | Parque
Arauco | Urbi
Best Recent Calls:
Out-of-consensus call on MRV. Taking a contrary view from the market, which did not believe in MRV’s turnaround, we reiterated our positive view on MRV in June
2013, stating that the worst was behind MRV and that the company was approaching the margin inflection point. We called investors’ attention to the company’s solid
cash flow generation and excessively discounted valuation. In four months’ time, the stock climbed over 50% versus 13% for the Ibovespa, and as of this date, the stock
is trading 17% higher versus -5% for the Ibovespa since June 2013.
Cemex Latam Holdings: We initiated coverage of Cemex Latin Holdings with a Buy rating in April 2013. We argued that CLH deserved a valuation premium to
Cementos Argos at a time when the market had an opposite view. Three months after that, CLH had outperformed CEMARGOS by 11%.
Sector piece on Colombian cement companies. In October 2013, we introduced our YE2014 target prices for CLH and CEMARGOS and named those stocks our top
picks in Colombia. CLH’s stock has rallied 11% since then.
Corporate Access:
Timely corporate access/events. Among the events we hosted in 2013 we highlight: (i) Lunch meeting with PDG’s CEO, Mr. Carlos Piani. The event took place during
a critical period in the company’s restructuring process, providing timely information on PDG’s turnaround and short-term outlook; (ii) Road show with MRV’s IR Director,
Ms. Monica Simão: hosted in September, when MRVE3 began to outperform the market due to improved results, the road show clarified skeptical investors’ inquiries
about the company’s earnings recovery and intended pace of growth; and (iii) Road show with CEF (Caixa Economica Federal): following a period of much noise
concerning the discontinuation of the French amortization system in mortgage origination, we were on the road with CEF to separate untruths from facts as well as to
provide an update on the development of MCMV program..
Coverage List
Corporate Access
Latin American Equities
Bruno Giardino, CFA (Sector Head)
Sao Paulo, Brazil
(+55) 11 3012 5914 | [email protected]
EDUCATION
Daniel Gewehr, Brazil
(+55) 11 3012 5787
[email protected]
Coverage: Anhanguera | Estácio | Kroton | Ser Educacional
Best Recent Calls:
Reiterating preference for the outperformer Kroton. Bruno maintained Kroton as his top pick during the whole year, and the stock outperformed its peers for the
second year in a row, appreciating 73%—even when Anhanguera’s discount to the merger’s share swap ratio started to widen. Bruno’s call was based on Kroton’s
best-in-class fundamentals and on a risk-return perspective.
Favoring SER and Estacio. Santander was a joint bookrunner of SER’s IPO, which rose 34% in two months. Bruno worked in the IPO and initiated coverage in
December. He has also favored Estacio for most of the year, and the stock appreciated 47% in 2013.
Amongst the most significant sector pieces published over the last few months, we would highlight (i)The Quality Watchman series, an in-depth analysis of MEC’s
quality assessments; and (ii) coverage of main industry events: Private Education Congress and ABED’s Distance-Learning International Conference.
Corporate Access:
5th Santander Education Conference established itself as an insightful event, based on presentations by nonlisted companies and industry experts, in addition to all
listed higher education companies. The team also organized events with reputable industry sources.
Coverage List
Corporate Access
Latin American Equities
ELECTRIC & OTHER UTILITIES
Maria Carolina Carneiro
Sao Paulo, Brazil
(+55) 11 3012 6682 | [email protected]
João Saad, Brazil
Nicholas Schild, Chile
Thiago Silva, Brazil
Walter Chiarvesio, Argentina
(+55) 11 3553 9666
(+56) 22 336 3361
(+55) 11 3553 2555
(+54) 11 4341 1564
[email protected]
[email protected]
[email protected]
[email protected]
Coverage: AES Gener | AES Tiete | Aguas Andinas | Alupar | Cemig | Cesp | Colbun | Comgas | Copasa | Copel | CPFL Energia | E-CL | Eletrobras |
Eletropaulo | Endesa Chile | Energias do Brasil | Enersis | Eneva | Equatorial | IAM | Light | Renova Energia | Sabesp | Taesa | Tractebel |
Transmissao Paulisa
Best Recent Calls:
Negative view on Copel: Curbing market expectations on apparently low multiples. In September 2013 we released a report on integrated companies in which we
highlighted our view that Copel’s adjusted multiples should account for lower implied return, worse operating and regulatory performance, and less growth sustainability
in the longer term.
Positive calls on Taesa and Alupar. In Santander’s LatAm Universe Book, published in early January, we highlighted the attractiveness of the two cases before the
start of rationing discussions, based on solid cash flow generation, higher than average operating parameters, and good IRRs. In our 4Q13 preview, with the two stocks
overdiscounted, we reiterated the calls, and in both reports we have published on the hydro situation (early February and end of February), we highlighted our
preference toward TransCos, even in our nonrationing cases.
The team published a number of insightful thematic reports, among them Brazil Economics/Utilities/Strategy: Crying in (No) Rain—Talking about Rationing Again;
February 2014, Brazil Utilities: Fifth Brazilian Utilities Day: Help on the Way but Uncertainties Remain, March 2014.
Corporate Events:
VII EuroLatAm Infrastructure & Utilities Conference in NY—Top Management from Cemig, Sabesp, TAESA, and Alupar—October 2013
Cancun CEO Latam Conference—Top Management from Endesa, Enersis, Colbun, Cemig, TAESA, and Alupar.
Fifth Brazilian Utilities Day—Top Management from Tractebel, CPFL, and AES; CCEE board member and Aneel representative—March 2014
Coverage List
Corporate Access
Latin American Equities
FINANCIALS | BANKS
Boris Molina (Sector Head)
New York, USA
(+1) 212 350 3977 | [email protected]
Henrique Navarro, Brazil
(+55) 11 3012 5756
[email protected]
Nicholas Schild, Chile
(+56) 22 336 3361
[email protected]
Renata Cabral, Brazil
(+55) 11 3012 5731
[email protected]
Coverage: Banco de Chile | Banco do Brasil | Banco Macro | Banco Pine | Banorte | Banregio | BBVA Frances | BCI | Bradesco | Corpbanca | Credicorp |
Davivienda | Gentera | GF Galicia | GF Inbursa | Grupo Aval | Intercorp | Itaú Unibanco | Itaúsa
Best Recent Calls:
Remarkable report The End of the Repression: After recommending caution with respect to Brazilian banks for close to three years, Boris Molina and Henrique
Navarro published a report in October 2013 foreseeing a tapering of the policy of strong public sector loan growth, predicting a recovery in ROEs and market share at
private banks, offering a more positive view on the sector, and naming Itaú Unibanco as their top pick in Brazilian banks. The latest data from the Brazilian Central
Banks indicates that their thesis was spot-on, with a recovery in spreads and a slowdown in public bank loan growth, as anticipated in the report.
Remarkable calls of the year: Boris was persistent in his call of a Buy rating on Davivienda in Colombia in 2013, correctly anticipating that Bancolombia would
underperform due to the need to increase capital to bolster capital ratios as the closing of the acquisition in Panama. His upgrade of Bancolombia to Buy in early 2014,
ahead of the capital increase, also proved to be the right call, as the stock rallied ahead of the deal. In a similar way, Boris was ahead of the market with Banorte, with
a Buy rating on Banorte before its capital increase in mid-2013, again anticipating a that the stock has overly discounted the share overhang. Likewise, in Mexico, his
timely upgrade of Compartamos (Gentera) as a likely winner in the new regulatory environment in Mexico also paid off handsomely, while he correctly recommended
that investors to stay way from Bolsa for the duration of the year on the weak cost outlook and regulatory uncertainties.
Coverage List
Corporate Access
Latin American Equities
FINANCIALS | NON BANKS
Boris Molina (Sector Head)
New York, USA
(+1) 212 350 3977 | [email protected]
Henrique Navarro, Brazil
Nicholas Schild, Chile
Renata Cabral, Brazil
(+55) 11 3012 5756
(+56) 22 336 3361
(+55) 11 3012 5731
[email protected]
[email protected]
[email protected]
Coverage: AFP Habitat | BB Seguridade | BM&F Bovespa | Bolsa Mexicana de Valores | Brasil Insurance | CETIP | Cielo | Grupo Sura | Multiplus | Porto
Seguro | Smiles | Sul America | Valid
Best Recent Calls:
Top Insurance Coverage - Timely Recommendation on Brazilian Insurance Companies. Henrique is ranked in the top positions in accuracy and timing of his
recommendations on insurance companies, according to Bloomberg analyst rank. He covers all four listed insurance Brazilian companies namely: BB Seguridade,
Porto Seguro, SulAmerica and Brasil Insurance. His timely reports provides an in depth update and is precise in anticipate the insurance seasonal characteristics – soft
and hard cycle incorporating an extensive cross-check of views with possible impacts of industry leading indicators as: unemployment level vs. insurance penetration
and anticipated analysis of Brazilian rainy season vs. auto insurance market, which position his research apart from mainstream.
.
Out of Consensus calls – Cielo and BM&F Bovespa. Henrique started 2014 with out of consensus call on Cielo, being the single analyst with underperformance
recommendation, anticipating the competitive environment for the acquiring industry for 2014. He also maintained an out of consensus view on BM&F Bovespa after
close two years, maintaining the proved negative view on traded volumes. He changed his recommendation to hold on October 2013, with a more constructive view
driven by the priced in impact on competition and attractive company’s dividend yield.
Corporate Access:
Strong Corporate Access – Events and Road Show: Henrique and team have also close access to financial institutions management, hosting several events in 2013
as: Mortgage Morning with top management from the largest Brazilian banks, Insurance Day with all of the Directors from Brazilian insurance companies present,
Loyalty Day with listed and non-listed company’s top management. Henrique also hosted the first event with investors with ATS Brasil in March
Coverage List
Corporate Access
Latin American Equities
Luis Miranda, CFA (Sector Head)
FOOD & BEVERAGE
Mexico City, Mexico
(+52) 55 5269 1926
[email protected]
Andres Soto, USA
Bruno Taveira, Brazil
João Mamede, Brazil
Mauricio Serna, Mexico
Ronaldo Kasinsky
(+1) 212 407 0976
(+55) 11 3553 9602
(+55) 11 3553 0699
(+52) 55 5269 1931
(+55) 11 3553 2396
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
Coverage: AmBev | Andina | Arca Continental | Brasil Foods | CCU | Coca-Cola Femsa | Concha y Toro | FEMSA | Gruma | Grupo Bimbo | Grupo Herdez |
Grupo Modelo | Grupo Nutresa | JBS | Marfrig | Minerva | Pesquera Exalmar
Best Recent Calls:
We have maintained a strong conviction call for Gruma. The company was the best-performing stock in the sector in the last two years. We identified the
turnaround and deleveraging process of the company.
For Ambev, we maintained a good flow of information on the corporate restructure process. Also, we maintained a cautious view on the stock due to valuation
and identified a good entry point in late 2013, as volumes bottomed out at the end of the year. What’s more, our team fostered communication with nonpublic
companies (Schin/Kirin).
We remain bearish on the bottlers in Mexico. The main reasons were (1) the expensive valuation levels and (2) expectation of more normalized growth. The
environment was further complicated by new excise taxes in Mexico.
Coverage List
Corporate Access
Latin American Equities
Daniel Gewehr (Sector Head)
Sao Paulo, Brazil
HEALTHCARE
(+55) 11 3012 5787 | [email protected]
Bruno Giardino CFA, Brazil
Francisco Echeverria, Chile
Reinaldo Santana, Mexico
(+55) 11 3012 5914
(+56) 22 336 3358
(+52) 55 5269 1920
[email protected]
[email protected]
[email protected]
Coverage: DASA | Fleury | OdontoPrev | Qualicorp | Cruz Blanca Salud | Inversiones La Construcción | Genomma Lab
Best Recent Calls:
Industry benchmark Healthy Actions Required report. Daniel, who has experience as a buy-side analyst, produced unique industry reports such as Brazilian
Healthcare: Healthy Actions Required-Takeaways from Our 7th Annual Trip, where he provided an in-depth update of his coverage and healthcare subsegments. His
research incorporates an extensive cross-check of views on the healthcare sector, including nonlisted entities in the industry such as regulators, hospital providers,
brokers, health consultants, and reinsurers, which position his research apart from mainstream.
Active healthcare portfolio rotation, with strong results. Daniel has been very timely in the case of OdontoPrev, upgrading the stock to buy on June 24, 2013.
After the stock outperformed by 13%, Daniel downgraded it on January 9, 2014 (ODPV has corrected 12% since then). In October 2013, he changed his top pick to
Qualicorp from OdontoPrev.
Benchmark event: Healthcare Trip (already in its 7th edition). Daniel and team have close access to management, hosting Non-Deal Road Shows with all the
healthcare companies under coverage during 2013. Daniel also conducted the 7th Healthcare Trip with all listed companies.
Coverage beyond Brazil. Besides the coverage in Brazil, Daniel sponsors the coverage of Genomma in Mexico and ILC and Cruz Blanca Salud in Chile.
Coverage List
Corporate Access
Latin American Equities
Felipe Reis, Sector Head
METALS & MINING
Sao Paulo, Brazil
(+55) 11 3012 5758 | [email protected]
Alex Sciacio CFA, Brazil
Rodrigo Ordoñez, Chile
Walter Chiarvesio, Argentina
(+55) 11 3012 5870
(+56) 22 336 3358
(+54) 11 4341 1564
[email protected]
[email protected]
[email protected]
Coverage: Buenaventura | CAP | CSN | Gerdau | Grupo Mexico | Magnesita | Siderar | Southern Copper | SQM | Ternium | Usiminas | Vale | Volcan
Best Recent Calls:
Anticipating structural changes and turnarounds. 2013 was a turnaround year for the sector, with stocks going up significantly during the second half of the year
after a long period of underperfomance. We were able to identify the trend and upgrade the sector in the middle of the year, enjoying most of the outperformance.
Alerting investors on Vale. In a sequence of roadshows during the year it become clear to us that the main factor driving Vale's shares was the top-down view rather
than bottom up. With that, in spite of the company's good fundamentals and management achievements, we were able to alert investors about our skepticism on the
stock given the negative expectations about iron ore prices and China.
Corporate Access:
During the year we organized some meetings with company CFOs, including those of Gerdau, Usiminas, and Magnesita.
Coverage List
Corporate Access
Latin American Equities
OIL, GAS & PETROCHEMICALS
Christian Audi (Sector Head)
New York, USA
(+1) 212 350 3991 | [email protected]
Gustavo Allevato, Brazil
Walter Chiarvesio, Argentina
(+55) 11 3012 6042
(+54) 11 4341 1564
[email protected]
[email protected]
Coverage: Braskem | Ecopetrol | HRT | IEnova | Lupatech | OGX | Pacific Rubiales | Petrobras | Queiroz Galvão E&P | Tenaris | Ultrapar
Best Recent Calls:
Early bird on IEnova in Mexico: Initiated coverage in mid-2013 with a strong-conviction Buy rating and the highest target price in the Street based on its strong
fundamentals, defensive growth, and attractive non-energy-reform related opportunities. The stock has outperformed the Mexican Bolsa by 40% since our
initiation report entitled The Right Stock, at the Right Time.
Ultrapar as Top Pick in Brazil: Reiterated the stock as our top pick in April 2013 based on the differentiated event with Ultrapar’s CEO (first meeting ever with
investors in Rio); the stock has
outperformed the Brazilian Bovespa by 17% since our report.
Braskem in Brazil: Upgraded the stock to Buy in April 2013 based on strong international spreads, a weakening BRL, and solid volumes; the stock has
outperformed the Brazilian Bovespa by 16% since our upgrade.
Corporate Access:
Varied corporate access, including road shows in different geographic areas with CEO of Petrobras, CEO of Ultrapar, CEO of Queiroz Galvao, CEO of Sete Brasil,
CFO of Allesat, as well as events with key industry associations: first meeting of President of Sindicom with investors in 2014; President of Abiplast, among others.
Coverage List
Corporate Access
Latin American Equities
PULP & FOREST PRODUCTS
Alex Sciacio, CFA (Sector Head)
Sao Paulo, Brazil
(+55) 11 3012 5870 | [email protected]
Felipe Reis, Brazil
Rodrigo Ordoñez, Chile
(+55) 11 3012 5758
(+56) 22 336 3358
[email protected]
[email protected]
Coverage: CMPC | Copec | Duratex | Fibria | Klabin | Suzano
Best Recent Calls:
Klabin: perfectly timing the equity offering overhang and share rebound. Our out-of-consensus negative read on the conditions proposed for Klabin’s equity
offering proved correct, and the stock declined 20% since the announcement in June. In August, with the stock reaching two-year lows, we upgraded Klabin to Buy,
as we understood that the overhangs were already fairly priced in. Since the report, the stock price increased 25%.
Fibria: curbing market enthusiasm on pulp prices. After hosting a meeting with Fibria’s CFO and commercial director, we reiterated our cautious view on the stock,
which was trading close to four-year highs based on the expectations that pulp prices would rise further. Our counter-consensus view materialized, pulp prices
corrected, and Fibria’s ADR’s declined 18%.
Suzano: a farsighted call on delayed capex and challenging FCF outlook. Back in September, we were early birds in highlighting Suzano’s delayed capex issues
and flagged that consensus was too bullish on 2014 FCF estimates—a view that indeed was borne out in March, when a 60% higher-than-consensus capex was
announced. Since then, Suzano has consistently underperformed the Ibovespa and its main peers.
Duratex: pounding the table on unjustified stock underperformance. Following our meeting with Duratex’s management at Santander’s Brazil Conference in
August, we reiterated our Buy rating, as the stock’s steep 20% decline was unjustified. Three weeks after our report, the stock had rebounded 20%.
Coverage List
Corporate Access
Latin American Equities
REAL ESTATE
Fabiola Gama / Toe Matsumura
São Paulo, Brazil
Mexico City, Mexico
(+55) 11 3012 7414
(+52) 55 5257 8172
[email protected]
[email protected]
Jose Antonio Parra, Mexico
Renan Manda, Brazil
(+52) 55 5269 1904
(+55) 11 3012 6535
[email protected]
[email protected]
Coverage: BR Malls | BR Properties | Cyrela Brazil Realty | Direcional Engenharia | Even | EZ Tec | Fibra Uno | Helbor | Iguatemi | MRV Engenharia |
Multiplan | PDG Realty | Rodobens | Rossi Residencial | Tecnisa | Vesta
Best Recent Calls:
EZTec as a high-quality asset has paid off. In early 2013 we named EZTec as our top pick among the Brazilian homebuilders due to still inexpensive valuation visà-vis its profitability level and the expected pickup in earnings driven mainly by the EZTowers project and reliable execution. By November, 2013, the stock was up
26% YTD, at which point we downgraded the stock purely on rich valuation. After the downgrade the stock declined 13% by year-end.
Increases in TP for Fibra Uno and Vesta. In 1Q14 we published reports on Fibra Uno and Vesta, reinforcing our positive view on both names. We believe Fibra Uno
will grow as it integrates properties and continues with organic growth. We expect Vesta to grow as it spends cash still available from its last follow-on to develop its
pipeline, which includes a major project with Nissan.
Corporate Access:
Timely corporate access/events. Among the events we hosted in 2013 we highlight: (i) Lunch meeting with PDG’s CEO, Mr. Carlos Piani: The event took place
during a critical period in the company’s restructuring process, providing timely information on PDG’s turnaround and short-term outlook; (ii) Road show with MRV’s IR
Director, Ms. Monica Simão: Hosted in September, when MRVE3 began to outperform the market due to improved results, the road show clarified skeptical investors’
inquiries about the company’s earnings recovery and intended pace of growth; and (iii) Road show with CEF: following much noise concerning the discontinuation of
the French amortization system in mortgage origination, we were on the road with CEF to separate untruths from facts as well as to provide an update on the
development of MCMV program.
Property tour in Mexico City: We had a property tour in January of 2014, which included properties of Fibra Macquarie, Fibra Terrafina, and Fibra Danhos; the tour
was useful to a major European client in making an investment decision.
Coverage List
Corporate Access
Latin American Equities
João Mamede (Sector Head)
Sao Paulo, Brazil
(+55) 11 3553 0699
RETAILING
[email protected]
Reinaldo Santana, Mexico
Andres Soto, USA
Bruno Taveira, Brazil
Mauricio Serna, Mexico
Ronaldo Kasinsky
(+52) 55 5269 1920
(+1) 212 407 0976
(+55) 11 3553 9602
(+52) 55 5269 1931
(+55) 11 3553 2396
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
Coverage: Almacenes Exito | Alsea | B2W | CBD | Cencosud | Chedraui | Cia Hering | Comerci | Falabella | Grupo Famsa | Grupo Sanborns | Hypermarcas |
IMC | Kimberly Clark | Liverpool | Lojas Americanas | Lojas Renner | Natura | Ripley | Saraiva | Soriana | Sports World | Unicasa Móveis | Via
Varejo | Walmex
Best Recent Calls:
We anticipated the sector de-rating in Brazil. In our December 12, 2013, Brazil Retail & Consumer Goods report, Uncertainties to Continue for a While Longer, we
revised our sector outlook and highlighted our negative view on the consumption environment in Brazil for 2014. We also noted the demanding valuation at which most
stocks were trading and we recommended selectivity. In February this year, retailers strongly underperformed, followed by a de-rating, with the sector’s average 2014E
P/E dropping from 19x to 16x.
We prefer Mexico over Brazil—Liverpool and Lojas Americanas are our top picks. We recently published the report Mariachi or Samba—Dancing to Different
Beats in which we highlight our more constructive view on Mexico over Brazil, as we expect economic activity to recover throughout 2014, especially in the second half
of the year. Our top pick in the region is Liverpool, as we think this department store chain is well positioned to take advantage of the positive structural changes in the
Mexican apparel segment. In Brazil, our top pick is Lojas Americanas, as we believe this Brazilian retail chain’s model provides one of the best alternatives for the
challenging economic environment the country is experiencing. We like the company´s defensive profile (resilient sales mix and low dependence on credit) and its
track record of good results.
Corporate Access:
We hosted a conference with listed and nonlisted retailers. The event allowed buy-side analysts to interact with companies that usually do not speak to the
investor community.
Coverage List
Corporate Access
Latin American Equities
TELECOM, MEDIA & TECHNOLOGY
Valder Nogueira (Sector Head)
Sao Paulo, Brazil
(+55) 11 3012 5747 | [email protected]
Bruno Mendonça, Brazil
Rodrigo Ordoñez, Chile
Walter Chiarvesio, Argentina
(+55) 11 3012 5759
(+56) 22 336 3358
(+54) 11 4341 1564
[email protected]
[email protected]
[email protected]
Coverage Telecom: America Movil | Entel | Oi | Telecom Argentina | Telefonica Brasil | TIM Participações
Coverage Media: Televisa
Coverage Technology: Linx | Positivo Informatica | Sonda | Totvs
Best Recent Calls:
The go-to team to understand corporate events, including the Oi-PT amalgamation and the potential sale of TIM Brasil. We closely analyzed and have been
successfully guiding investors in understanding the intricacies of the main corporate events in the sector. We first detected the major side effects on all parties of the
proposed Oi-PT merger and have carefully guided investors on the non-obvious steps that may (or may not) lead to a potential M&A involving TIM Brasil through an inmarket consolidation or through the entry of a new player.
The early bird on the TIM M&A news flow. We now have a more cautious stance. In late July we called investors’ attention to upcoming (September) changes in
Telecom Italia’s controlling group (Telco) that could led to M&A noise on TIM Brasil. From its low ~R$8/share in late July, TIMP3 rose almost 60% through late January.
We grew more cautious on the stock before the peak price on the grounds that the intricacies of doing an in-market consolidation deal (where the most value could be
added vs. entry of a newcomer) would make it unlikely to materialize.
Corporate Access:
Custom-made and out-of-the-box corporate access. We moved away from the main tream large/group events and shifted our corporate strategy focus to small and
custom-designed meetings with key industry specialists (in the telecom and tech sectors), selecting for these meetings company officials, legal/fiscal advisors, and
private companies.
Coverage List
Corporate Access
Latin American Equities
TRANSPORTATION
Pedro Balcão (Sector Head)
Sao Paulo, Brazil
Ana Reynal CFA, Mexico
Bruno Amorim CFA, Brazil
Jose Antonio Parra, Mexico
(+55) 11 3012 5765 | [email protected]
(+52) 55 5269 1900
(+55) 11 3012 6016
(+52) 55 5269 1904
[email protected]
[email protected]
[email protected]
Coverage: ALL | Arteris | Asur | CCR | Copa | Ecorodovias | Embraer | GAP | Gol | JSL | LatAm | Localiza | OHL Mexico | OMA | Santos Brasil
| Tegma |
Triunfo | Volaris
Euro-LatAm edge knowledge. Not only do we have a consistent analysis across LatAm, but we also work closely with our Infrastructure team in Europe.
Best Recent Calls:.
Infrastructure: During the year, we have insisted on two calls: (i) that toll roads are bond proxies and therefore there was a significant risk for Brazilian names;
and (ii) Overweight Mexico vs. Underweight Brazil, based on different momentum in long-term interest rates in the two
countries and expensive valuations in Brazil (IRR below risk free) vs. reasonable valuations in Mexico (IRR above Ke). Thus, we have maintained a negative stance on
CCR and a positive one on OHL Mexico.
Mexican Airports: We downgraded Mexican airports in January 2013 and then upgraded the sector (with an in-depth report) in November 2013, with OMA as top pick.
We find GAP’s valuation reasonable but were concerned about the conflict among shareholders; with respect to ASUR, we identified a real risk of tariff falls and a rich
valuation.
Negative on airlines due to the challenging macro scenario that, in our view, should more than offset the correct conservative management stance on capacity. Copa
was the exception. It was always our only Buy. We were the only analysts to publish a report on Volaris alerting the market to a price war in Mexico. Please see our
initiation of coverage last December.
Negative on Santos Brasil, due to a different view on competition and renewal of concession from consensus.
Positive on Localiza. Throughout the year, we kept our 2013 earnings estimate clearly above the consensus, which proved correct as lower revenue was offset by
lower depreciation, lower-than-expected financials, and a recovery in car sales in 2H13.
Downgrade of Tegma in January 2013 was in anticipation of a very bad performance of Integrated logistics. We upgraded it to Buy on January 9, 2014.
JSL: In-depth initiation of coverage in December 2012 with a Buy rating.
Corporate Access:
Access to top management and benchmark events, including the one EuroLatam InfraConference on the Street. During 2013, we had several interesting events,
including: (i) a Brazilian Infrastructure trip, including site visits and meetings with top management and government officials; (ii) the VII EuroLatam InfraConference,
with the presence of main companies in the sector in LatAm and Europe.
(iii) At our Cancun conference, almost all LatAm Transportation and Infra companies were present and represented by top management.
Coverage List
Corporate Access
Latin American Equities
LATAM STRATEGY
Jesus Gomez (Head of LatAm Research, Strategist)
Andres Soto, USA
Arturo Espinosa, Mexico
Daniel Gewehr, Brazil
Francisco Errandonea, Chile
New York, USA
(+1) 212 407 0976
(+52) 55 5269 1924
(+55) 11 3012 5787
(+56) 22 336 3357
(+1) 212 350 3992 | [email protected]
[email protected]
[email protected]
[email protected] [email protected]
Best Recent Calls:
Hector Chavez, Mexico
João Noronha, Brazil
Stefano Rizzi, USA
Walter Chiarvesio, Argentina
(+52) 55 5269 1925
(+55) 11 3012 5734
(+1) 212 350 3979
(+54) 11 4341 1564
[email protected]
[email protected]
[email protected]
[email protected]
Our out-of-consensus call of playing the Fed relief rally following the tapering talks correction in June by overweighting Brazil vs. Mexico generated outperformance of
more than 26% in USD terms through October 2013. Our more negative than consensus view on Chilean equities due to political volatility and weak flow dynamics
materialized, as the country was one of the worst-performing LatAm markets of 2013.
Underweight stance toward consumption sectors toward end of 1H13 due to stretched valuations and macro headwinds, especially for food retailers in Mexico and
discretionary retailers in Brazil, was consistent with strong underperformance. Strong overweight in education and investment-related sectors, such as cement &
construction and infrastructure, materialized, as they were the best-performing sectors in 2013.
Our staple publication LatAm All Stars, in which we outline our top 10 large/mid- and small-cap top picks, outperformed the benchmark by more than 9% in 2013. Topperforming calls were Gruma, IEnova , Bancolombia, and Cementos Argos. On the quantitative front, we accurately predicted vast majority of additions/deletions for
rebalancing of MSCI LatAm indices.
Outlook:
The top-down view for LatAm remains challenging in the short term. As outlined in our Funds & Flows weekly reports, our case for more supportive equity flows in
2H14 remains, as better relative valuations in EM vs. DM coupled with lower headline risk stemming from China should continue to serve as a catalyst for investors,
especially among institutional foreign investors that remain underweight LatAm.
We continue to prefer Mexico and Colombia to Brazil and Peru. We remain neutral on Chile and Argentina.
Top Picks:
Ambev, Banorte, Braskem, IEnova, Ultrapar, Copa, Gruma, OMA, and Parque Arauco.
Coverage List
Corporate Access
Latin America Research
ARGENTINA STRATEGY
Walter Chiarvesio (Strategist)
Buenos Aires, Argentina
(+54) 11 4341 1564 | [email protected]
Boris Molina, USA
Christian Audi, USA
Rodrigo Park, Argentina
(+1) 212 350 3977
(+1) 212 350 3991
(+54) 11 4341 1080
[email protected]
[email protected]
[email protected]
Best Recent Calls:
Hold recommendations on Southern Copper, GMEXICO, and Volcan.
Buy recommendation on Argentina following electoral results in mid-term elections. Top picks: Banco Macro and YPF.
2013 Sector Outlook:
Cautious view on base metal companies.
Coverage List
Corporate Access
Latin America Research
Daniel Gewehr (Strategist)
BRAZIL STRATEGY
Sao Paulo, Brazil
(+55) 11 3012 5787 | [email protected]
Christian Audi, USA
João Noronha, Brazil
Pedro Balcão Brazil
Valder Nogueira, Brazil
(+1) 212 350 3991
(+55) 11 3012 5734
(+55) 11 3012 5765
(+55) 11 3012 5747
[email protected]
[email protected]
[email protected]
[email protected]
Best Recent Calls:
Differentiated thematic reports. Daniel, who has experience as a buy-side analyst, produced unique strategy reports such as Hey Competition, Can You Jump a
Wide Moat?Our Approach to Competitive Advantages of Listed Companies, offering a different perspective regarding investment screening of Brazilian listed
companies. Daniel also published the reports Moving out of Comfort Zone and Playing the Hurdle Races, where he suggested out-of consensus picks and scenarios
for Brazil equities.
Adopting a more cautious view on Brazilian equity market since 2013 has paid off. Daniel built a recommended portfolio which outperformed the benchmark by
16 pp in LTM, helped by its bottom-up construction acquired in his 13 years’ experience in sector coverage.
Complete line of strategy products. Daniel offers one-stop-shop coverage of Brazilian strategy, with products including the Chart Book, thematic reports,
Quantitative Portfolio, Small Caps Portfolio, Brazil Investor trip, and Weekly News Flow, among others.
Corporate Access:
During 2013-14, the Brazil Equity Strategy team has provided investors with the possibility to meet (1) political experts (Eurasia Group, Marcelo Marinis, and Alberto
Almeida); (2) industry scholars (Claudio Frischtak); and (3) a range of cross-checks and industry sources, such as (a) IBOPE (Brazilian specialist on shopping malls);
and (b) Mr. Marcelo Cherto (retail franchise consultant).
Santander’s Strategy Team also hosted the 7th Brazil Trip, a unique investor event focused on nonlisted sources in order to cross-check main market sectors.
Coverage List
Corporate Access
Latin American Equities
Francisco Errandonea (Strategist)
CHILE STRATEGY
Santiago, Chile
(+56) 22 336 3357 | [email protected]
Francisco Echeverria, Chile
Nicholas Schild, Chile
Rodrigo Ordoñez, Chile
(+56) 22 336 3358
(+56) 22 336 3361
(+56) 22 336 3358
[email protected]
[email protected]
[email protected]
Best Recent Calls:
On June 20, 2013, we rated Endesa as Buy, on our assumption that hydrology had limited downside, and that even in the case of a dry year, Endesa’s results
were not going to suffer, because of the entry of new efficient coal capacity and the disciplined commercial policy of the company. Back then this was an out-ofconsensus call as, historically, Endesa’s results have had a correlation with the level of rains in Chile. We have reiterated the call on a quarterly basis, and since
then the stock has been one of the best performers in the market, outperforming the local benchmark by 12%.
We offer on-the-ground coverage of the Chilean elections since the primary elections, with a series of reports on the candidates’ main proposals.
Corporate Access:
We organized the XV edition of our CEO conference in Santiago , which we have now expanded with additional days in Lima, Bogotá, and Medellin. We hosted 26
events, such as meetings with CEOs, government officials, and consultants, as well as site visits, with a reduced group of international investors..
Coverage List
Corporate Access
Latin American Equities
MEXICO STRATEGY
Hector Chavez (Strategist)
Mexico City, Mexico
(+52) 55 5269 1925 | [email protected]
Ana Reyna CFA, Mexico
Arturo Espinosa, Mexico
David Franco, Mexico
Luis Miranda CFA, Mexico
(+52) 55 5269 1900
(+52) 55 5269 1924
(+52) 55 5269 1932
(+52) 55 5269 1926
[email protected]
[email protected]
[email protected]
[email protected]
Reinaldo Santana, Mexico
Toe Matsumura, Mexico
(+52) 55 5269 1920
(+52) 55 5257 8172
[email protected]
[email protected]
Best Recent Calls:
Evaluation of 2013 strategy: During the beginning of 1H13, we recommended a cautious investment strategy due to high valuation and increased downside risks.
The Mexican IPC registered a decrease of 18% in 1H13 from a maximum of around 46,000 points to a minimum 37,517 points. After reaching this minimum level and
despite valuations remaining expensive, we called for a more aggressive investment strategy. In the second half of the year, the IPC rebounded 14% to 42,727 points
by year end.
During 2013, our Mexican Model Portfolio outperformed the Mexican stock market by 331 bps (with a positive 1.07% return vs. -2.24% for the IPC).
In our January 2014 strategy report (Market View: Volatility Risks Suggest a Defensive Strategy), we highlighted that 2014 would be a complicated year for Mexican
equities because of stubbornly high valuations and the volatility in GEM currencies and stock markets that the U.S. Fed’s tapering process would generate. To date,
the Mexico IPC Index is down 6.9% in U.S. dollars.
Since mid-2013, we have been very negative on the TMT sector due to the strong competitive environment facing AMX in its various markets and because of
regulatory risk in Mexico. We also have been quite cautious on the food retailer sector due to a very weak consumer environment since mid-2013 and the expected
negative effect that the fiscal reform would have on the Mexican consumer environment in 1H14. These two sectors have underperformed the Mexican Mexico IPC in
the past 12 months.
We have had strong conviction on Fibra Uno, which despite a significant correction in 1H13 due to higher interest rates, outperformed the Mexican market by 1,070
bps. In 1Q14, Fibra Uno also outperformed the Mexican market by 514 bps.
Coverage List
Corporate Access
Latin American Equities
NORTH ANDEAN COUNTRIES STRATEGY
Andres Soto (Strategist)
New York, USA
(+1) 212 407 0976| [email protected]
Boris Molina, USA
Christian Audi, USA
Luis Miranda CFA, Mexico
(+1) 212 350 3977
(+1) 212 350 3991
(+52) 55 5269 1926
[email protected]
[email protected]
[email protected]
Best Recent Calls:
Cemex Latam Holdings: We initiated coverage of CLH with a Buy rating in April 2013. We argued that CLH deserved a valuation premium to Cementos Argos at a
time when then market had an opposite view. Three months after that, CLH had outperformed CEMARGOS by 11%.
Sector piece on Colombian cement companies. In October 2013, we introduced our YE2014 target prices for CLH and CEMARGOS and named those stocks our
top picks in Colombia. CLH’s stock has rallied 11% since then.
Almacenes Exito: We downgraded the stock to Hold in July 2013. Over the next six months, the stock performed in line with the COLCAP index. On March 3, 2014,
we upgraded to Buy, arguing that the stock was undervalued vs. other retailers in the region. The stock has rallied 10% since our upgrade.
Corporate Access:
During the week of August 26, we organized the XV Annual Andean Trip. A five-day agenda included 25 meetings with the CEOs and CFOs of the most
representative companies, government officials, and political and economic analysts in Colombia, Peru, and Chile.
During the year we have organized several bespoke trips to Colombia and Peru.
Coverage List
Corporate Access
Latin America Research
CREDIT RESEARCH
Aaron Holsberg
Head of LatAm Credit Research
Corporate Debt
Mariana Emsenhuber
Isidro Arrieta
Victor Schmutzler
Coverage List
Corporate Access
Latin America Research
Aaron Holsberg (Sector Head)
CORPORATE DEBT
New York, USA
(+1) 212 350 0978 | [email protected]
Isidro Arrieta, USA
Mariana Emsenhuber, Brazil
Victor Schmutzler, Brazil
(+1) 212 407 0982
(+55) 11 3012 5776
(+55) 11 3553 2529
[email protected]
[email protected]
[email protected]
Coverage: Arauco | Arcor | Grupo Bimbo | Braskem | Camposol | Cemex | Cencosud | CMPC | CNO | Colbun | Copeinca | CSN | E-CL | EEB | Fibria | Gerdau |
GVO | ICA | MABE | Marfrig | Minerva | ODB Drilling | Pacific Rubiales | Sigma | Suzano | Usiminas | Votorantim
Best Recent Calls:
We Overweighted Braskem bonds (’20, ’21, ’22, and ’41), based on our conviction that Braskem is an improving credit whose investment-grade rating is increasingly
secure. Recent results have indeed shown steady improvement, and this remain a core pick.
We Overweighted Gerdau bonds (’17, ’20, ’21, and ‘23), similarly considering it cheap to investment-grade peers and in view of its improving credit metrics and steady
net debt reduction. Then the bonds tightened 50-75 bp and we took our gain, moving this to Market Weight in February 2014.
We Underweighted GVO bonds (’18 and ’22) in May 2013, and in second half 2014 these bonds fell from 90-95 to the current level of 55-60 on severe credit concerns.
Our main sector pieces on LatAm credit were the briefing books prepared in September following our research trip to Mexico and in October following our Andean
Investor Conference.
Corporate Access:
Events included investor trips to Brazil (April), Mexico (September), and Peru and Chile (October), as well as breakfast with Javer and dinner with Geo in March for
Mexican Homebuilding Day, and two forums where investors met with senior analysts from Moody’s and S&P.
Coverage List
Corporate Access
Latin America Research
MACRO STRATEGY
Alejandro Estevez Bretón
Head of LatAm Macro Strategy
Rates & FX (Local-Market Strategy)
Economics
Alejandro Estevez Bretón
Adriana Dupita
Alejandro Rivera
Cristiano Souza
David Franco
David Franco
Fernanda Consorte
David Duong
Hector Chavez
Juan Pablo Cabrera
Juan Pablo Cabrera
Marcela Bension
Martin Mansur
Mauricio Molan
Rafael Camarena
Rodrigo Park
Salvador Orozco
Sergio Galvan
Tatiana Pinheiro
Coverage List
Corporate Access
Latin America Research
Alejandro Estevez Bretón
New York, USA
ECONOMICS
(+1) 212 350 3917 | [email protected]
Hector Chavez, Mexico
Juan Pablo Cabrera, Chile
Mauricio Molan, Brazil
(+52) 55 5269 1925
(+56) 22 336 3389
(+55) 11 3012 5724
[email protected]
[email protected]
[email protected]
Best Recent Calls:
Our Brazilian team consistently had a lower-than-consensus GDP forecast for 2013 starting in late 2012 and almost matched the actual number (2.30% vs. 2.28%
actual).
Our Mexico team started cutting its GDP forecasts in 2Q13, earlier than the consensus, based on the poor performance of some sectors, and had a few sizable
reductions later in the year, with the final forecast virtually meeting the actual number (1.2% vs. 1.1%).
Our Mexico team anticipated the first Banxico rate cut early in February, way before the consensus started to move, effectively matching both the timing and
magnitude of the actual move (50-bp cut in March 2013).
Macro forecasts for USD/BRL were quite accurate in 2013, closely tracking both the quarterly and end-of-year numbers (ranked 2nd among 37 contributors on
Bloomberg).
Macro forecasts for USD/ARS were quite accurate in 2013, closely tracking both the quarterly and end-of-year numbers (ranked 1st among 17 contributors on
Bloomberg).
Coverage List
Corporate Access
ECONOMICS (continued)
Latin America Research
Adriana Dupita, Brazil
Cristiano Souza, Brazil
David Franco, Mexico
Fernando Consorte, Brazil
(+55) 11 3012 5726
(+55) 11 3012 5180
(+52) 55 5269 1932
(+55) 11 3012 7114
[email protected]
[email protected]
[email protected]
[email protected]
Carlos Martin Mansur, Argentina
Rafael Camarena, Mexico
Rodrigo Park, Argentina
Salvador Orozco, Mexico
(+54) 11 4341 1096
(+52) 55 5269 1927
(+54) 11 4341 1080
(+52) 55 5269 1933
[email protected]
[email protected]
[email protected]
[email protected]
Sergio Galvan, Argentina
Tatiana Pinheiro, Brazil
(+54) 11 4341 1728
(+55) 11 3012 5179
[email protected]
[email protected]
Coverage List
Corporate Access
Latin America Research
RATES & FX (LOCAL- MARKET STRATEGY)
Alejandro Estevez Bretón
New York, USA
(+1) 212 350 3917 | [email protected]
Alejandro Rivera, USA
David Duong, USA
David Franco, Mexico
Juan Pablo Cabrera, Chile
(+1) 212 350 0734
(+1) 212 404 0979
(+52) 55 5269 1932
(+55) 22 336 3389
[email protected]
[email protected]
[email protected]
[email protected]
Best Recent Calls:
FX:
(1)
We went short BRL/ long MXN (opened on January 30 and closed on April 1 for a 3.8% return) on political consensus to push forward reforms in Mexico,
while overall macro policy continued to deteriorate in Brazil. A partial resolution to the U.S. fiscal cliff and a substantial reduction in risks in Europe would help
the MXN, while FX intervention would prevent BRL from moving below 2.
(2)
We went short USD/BRL the next trading day after the Central Bank announced an FX intervention program (opened on August 23 and closed on September
5 for a 2% return), as we thought the BRL had weakened too much and positioning was already far too crowded with long USD positions. We thought the
intervention would be successful to reverse the recent losses seen in the BRL.
(3)
We went long USD/COP (opened on September 24 and closed on November 12 for a 2% return), as the market seemed to move too quickly to price in the
possibility that BanRep would let its reserve accumulation program expire.
Bonds:
We bought Mexican MBonos Dec. ‘15s without FX hedge in November 2012 (opened on November 20, 2012, and closed it on September 5, 2013, for a return,
including MXN gains, of 8.8%) given Banxico’s recent hawkish tone at the time, which we though would be reversed due to softening economic momentum and
phasing out of the supply shock affecting inflation. Our view was that Banxico was likely to sound much less hawkish over coming months and might even opt for a
rate cut in 1H13.
Coverage List
Corporate Access
Latin America Research
Alejandro Estevez Bretón
SOVEREIGN DEBT
New York, USA
(+1) 212 350 3917 | [email protected]
Alejandro Rivera, USA
David Duong, USA
David Franco, Mexico
Juan Pablo Cabrera, Chile
(+1) 212 350 0734
(+1) 212 404 0979
(+52) 55 5269 1932
(+55) 22 336 3389
[email protected]
[email protected]
[email protected]
[email protected]
Best Recent Calls:
September 2013: Detailed commentary on Argentina judicial proceedings and impact assessment , suggesting good short-term performance despite legal uncertainty.
Flagged potential for Venezuela to underperform after recent rally, given falling liquid reserves that could prompt issuance (PDVSA issued October 2013) and overall
lack of economic policy implementation. Benchmark 27s dropped 10 pts in under two months after the recommendation
November 2013: Trade idea to rotate out of Brazil front end to Colombia front end (Sell Brazil 19s vs. Buy Colom 17s) just before Fitch upgrade of Colombia.
Coverage List
Corporate Access
Latin America Research
Corporate Access
Latin American CEO Conference
Mexico Day
Healthcare Trip
Capital Goods Trip
Education Conference
Utilities Conference
Brazil Day
Mexico Day
Equity Conference
Annual Brazil Conference
Andean Trip
EuroLatAm Infrastructure & Utilities Conference
Coverage List
Corporate Access
Latin America Research
Latin American CEO Conference
2014 LatAm Conference at a Glance
3,662 One-on-One Meetings
145 Participating Companies
367 Investors
LAWRENCE SUMMERS
FERNANDO H. CARDOSO
Coverage List
FELIPE CALDERÓN
CARLOS SLIM
ERNESTO ZEDILLO
LUIS VIDEGARAY
Corporate Access
Latin America Research
US Conferences
Coverage List
Corporate Access
Latin America Research
Europe Conferences
Coverage List
Corporate Access
Latin America Research
Brazil Conferences
Coverage List
Corporate Access
Latin America Research
Brazil Conferences
Coverage List
Corporate Access
Latin America Research
Brazil Conferences
Coverage List
Corporate Access
Latin America Coverage List ( 1 of 3 )
Coverage List
Agribusiness
Cosan
Cosan Limited
São Martinho
Capital Goods
Alfa
Autometal
Grupo Carso
Iochpe Maxion
Mahle Metal Leve
Marcopolo
Mexichem
Randon
Romi
Weg
Cement & Construction
Ara
Cementos Argos
Cementos Pacasmayo
Cemex
Cemex LatAm Holdings
Cresud
Ferreycorp
Geo
Homex
ICA
Irsa
OHL Mexico
Parque Arauco
Urbi
Coverage List
Education
Anhanguera
Estácio
Kroton
SER Educacional
Electric & Other Utilities
AES Gener
AES Tiete
Aguas Andinas
Alupar
Cemig
Cesp
Colbun
Comgas
Copasa
Copel
CPFL Energia
E-CL
Eletrobras
Eletropaulo
Endesa Chile
Energias do Brasil
Enersis
Eneva
Equatorial
IAM
Light
Renova Energia
Sabesp
Taesa
Tractebel
Transmissao Paulista
Financials | Banks
Banco de Chile
Banco do Brasil
Banco Macro
Banco Pine
Bancolombia
Banorte
Banregio
BBVA Frances
BCI
Bradesco
CorpBanca
Credicorp
Davivienda
Gentera
GF Galicia
GF Inbursa
Grupo Aval
Intercorp
Itaú Unibanco
Itaúsa
Corporate Access
Latin America Coverage List ( 2 of 3 )
Coverage List
Financials | Non Banks
Food & Beverage (ctd)
Oil, Gas & Petrochemicals
AFP Habitat
BB Seguridade
BM&F Bovespa
Bolsa Mexicana de Valores
Brasil Insurance
CETIP
Cielo
Grupo Sura
Multiplus
Porto Seguro
Smiles
Sul America
Valid
Food & Beverage
JBS
Marfrig
Minerva
Pesquera Exalmar
Health Care
Braskem
Ecopetrol
HRT
IEnova
Lupatech
OGX
Pacific Rubiales
Petrobras
Queiroz Galvão E&P
Tenaris
Ultrapar
Pulp & Forest Products
CMPC
Copec
Duratex
Fibria
Klabin
Suzano
Real Estate
BR Malls
BR Properties
Cyrela Brazil Realty
Ambev
Andina
Arca Continental
Brasil Foods
CCU
Coca-Cola FEMSA
Concha y Toro
FEMSA
Gruma
Grupo Bimbo
Grupo Herdez
Grupo Modelo
Grupo Nutresa
Coverage List
Dasa
Fleury
OdontoPrev
Qualicorp
Cruz Blanca Salud
Inversiones La Construcción
Genomma Lab
Metals & Mining
Buenaventura
CAP
CSN
Gerdau
Grupo Mexico
Magnesita
Siderar
Southern Copper
SQM
Ternium
Usiminas
Vale
Volcan
Direcional Engenharia
Even
EZ Tec
Fibra Uno
Helbor
Corporate Access
Latin America Coverage List ( 3 of 3 )
Coverage List
Real Estate (ctd)
Retail & Consumer Goods (ctd)
Transportation
Iguatemi
Lojas Americanas
ALL
MRV Engenharia
Lojas Renner
Arteris
Multiplan
Natura
Asur
PDG Realty
Ripley
CCR
Rodobens
Saraiva
Copa Holdings
Rossi Residencial
Soriana
Ecorodovias
Tecnisa
Sports World
Embraer
Vesta
Unicasa Móveis
GAP
Retail & Consumer Goods
Via Varejo
Gol
Almacenes Exito
Walmex
JSL
Alsea
Telecom, Media & Technology
LATAM Airlines
B2W
America Movil
Localiza
CBD
Entel
OMA
Cencosud
Linx
Santos Brasil
Chedraui
Oi
Tegma
Cia Hering
Positivo Informatica
Comerci
Sonda
Triunfo
Volaris
Falabella
Telecom Argentina
Grupo Famsa
Telefonica Brasil
Grupo Sanborns
Televisa
Hypermarcas
TIM Participações
IMC
Totvs
Kimberly Clark
Liverpool
Coverage List
Analyst Access
List
Corporate
Santander Latin America
Research Team
Head of LatAm Equities: Ignacio Mendive
CATEGORY: FIXED INCOME
CATEGORY: INDUSTRIES
SECTOR
TEAM LEADER
OTHER TEAM MEMBERS
SECTOR
TEAM LEADER
OTHER TEAM MEMBERS
Agribusiness
Christian Audi
Gustavo Allevato
Capital Goods
Daniel Gewehr
João Noronha, Luis Miranda, Mauricio Serna
Corporate Debt
Aaron Holsberg
Mariana Emsenhuber, Victor Schmutzler
Andres Soto, Jose Antonio Parra, Renan Manda, Rodrigo
Ordoñez, Walter Chiarvesio
Financials |Banks
Toe Matsumura &
Fabiola Gama
Maria Carolina
Carneiro
Boris Molina
Financials | Nonbanks
Boris Molina
Food & Beverage
Luis Miranda
Healthcare
Daniel Gewehr
Henrique Navarro, Nicholas Schild, Renata Cabral
Andres Soto, Bruno Taveira, João Mamede, Mauricio Serna,
Ronaldo Kasinsky
Bruno Giardino, Francisco Echeverría, Reinaldo Santana
Metals & Mining
Felipe Reis
Alex Sciacio, Rodrigo Ordoñez, Walter Chiarvesio
Cement & Construction
Electric & Other Utilities
João Saad, Nicholas Schild, Thiago Silva, Walter Chiarvesio
Henrique Navarro, Nicholas Schild, Renata Cabral
Sovereign Debt
Local Markets Strategy
Alejandro EstevezBreton
Alejandro EstevezBreton
Alejandro Rivera, David Duong, Juan Pablo Cabrera
Alejandro Rivera, David Duong, Juan Pablo Cabrera
CATEGORY: COUNTRIES
SECTOR
TEAM LEADER
OTHER TEAM MEMBERS
Argentina
Walter Chiarvesio
Brazil
Daniel Gewehr
João Noronha, Valder Nogueira
Oil, Gas & Petrochemicals Christian Audi
Gustavo Allevato, Walter Chiarvesio
Pulp & Forest Products
Alex Sciacio
Felipe Reis, Rodrigo Ordoñez
Chile
Francisco Errandonea
Francisco Echeverria, Nicolas Schild, Rodrigo Ordoñez
Real Estate
Fabiola Gama &
Toe Matsumura
Renan Manda, Jose Antonio Parra
Mexico
Hector Chavez
Ana Reynal, Arturo Espinosa, David Franco, Luis Miranda,
Mauricio Serna, Reinaldo Santana, Toe Matsumura
Retailing
Joao Mamede
North Andean Countries
Andres Soto
Boris Molina, Christian Audi, Luis Miranda
Telecom, Media &
Technology
Transportation
Valder Nogueira
Pedro Balcão
Reinaldo Santana, Andres Soto, Bruno Taveira, Mauricio
Serna, Ronaldo Kasinsky
Bruno Mendonça, Francisco Errandonea, Rodrigo Ordoñez,
Walter Chiarvesio
Ana Reynal, Bruno Amorim
CATEGORY: ECONOMICS & STRATEGY
SECTOR
TEAM LEADER
Economics
Alejandro EstevezBreton
Equity Strategy
Jesus Gomez
OTHER TEAM MEMBERS
Adriana Dupita, Cristiano Souza, David Franco, Fernanda
Consorte, Hector Chavez, Juan Pablo Cabrera, Marcela
Bension, Martin Mansur, Mauricio Molan, Pablo Correa,
Rafael Camarena, Rodrigo Park, Salvador Orozco, Sergio
Galván, Tatiana Pinheiro
Anders Soto, Arturo Espinosa, Daniel Gewehr, Francisco
Errandonea, Hector Chavez, João Noronha, Stefano Rizzi,
Walter Chiarvesio
CATEGORY: SALES & TRADING
SECTOR
TEAM LEADER
OTHER TEAM MEMBERS
LatAm Sales
Patryck Pimpao
Alex Pallin, Axel Timmermann , Carlos Prates, Fabio Faraggi,
Fernando Sanchez, Geoffrey Knoell, Jose Acuna, Maria
Lopez Tolentino, Mirella Borin, Nico Drohojowsky, Pablo
Orvananos, Santiago Mosquera, Victoria Santaella
LatAm Trading
Marcio Souza
Alejandro Chavez, Benson O´Hara, Christopher Cohane,
Daniel Ciotti, Darrin Cummings, James Tallarico, Jason
Nardella, Maury Mischel, Michael Hill, Tomas Lyon
Santander Brazil ResearchTeam
When placing your votes for the All-Brazil Research team, please select the Team Leaders only.
Once again, thank you for your consideration.
Category: INDUSTRIES
Category: ECONOMICS & STRATEGY
SECTOR
TEAM LEADER
OTHER TEAM MEMBERS
Agribusiness
Christian Audi
Gustavo Allevato
Capital Goods
Daniel Gewehr
João Noronha
Chemicals & Oil
Christian Audi
Gustavo Allevato
Education
Bruno Giardino
Daniel Gewehr
Electric & Other Utilities
Maria Carolina Carneiro Thiago Silva, João Saad
Financials/Banks
Henrique Navarro
Boris Molina, Renata Cabral
Financial Nonbanks
Henrique Navarro
Boris Molina, Renata Cabral
Mauricio Molan
Equity Strategy
Daniel Gewehr
Victor Schmutzler
Ronaldo Kasinsky, Bruno Taveira,
Sovereign Debt
Luis Miranda
Alejandro EstevezBreton
Category: SALES & TRADING
Felipe Reis
Alex Sciacio
Pulp & Paper
Alex Sciacio
Felipe Reis
Retailing
João Mamede
Ronaldo Kasinsky, Bruno Taveira,
Bruno Mendonça
Pedro Balcão Reis
Bruno Amorim
Adriana Dupita, Cristiano Souza, Fernanda
Consorte, Juan Pablo Cabrera, Tatiana
Pinheiro
João Noronha, Jesus Gomez
OTHER TEAM MEMBERS
Mariana Emsenhuber, Aaron Holsberg,
Alejandro Estevez
Alejandro Rivera, Brendan Hurley, David
Duong
SECTOR
TEAM LEADER
OTHER TEAM MEMBERS
Brazil Sales
Fernando Sanchez
Carlos Prates, Mirella Borin, Eduardo
Toledo
Fernando Sanchez
Vito Madio Mastrorosa, Carlos Augusto
Faria, Lucas Gonçalves, Daniel Ciotti, Cesar
Tashiro , Vinicius Nogueira, Ana Paula Von
Hauenschild , Anderson Souza , Dayane
Pereira , Fernando Ferez
Luis Miranda
Valder Nogueira
OTHER TEAM MEMBERS
Category: FIXED INCOME
Corporate Debt
Metals & Mining
Transportation
Economics
TEAM LEADER
João Mamede
Telecommunications
TEAM LEADER
SECTOR
Food & Beverage
Technology, Media &
SECTOR
Brazil Trading
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