The Argentina Investment Report for March 15, 2016

By Patrick Archer 

BUENOS AIRES – Argentina is expecting a wave of new renewable energy investment from US companies, according to a new report from Energía Limpia XXI which lists biomass, solar and wind energy among the most sought after projects. Despite investing US$1.8 billion in renewable energy over the last five years, the country lags its neighbors. For example, Argentina installed only 8MW of wind energy in 2015 compared to 169MW in Chile, 316MW in Uruguay and 2,754MW in Brazil. (Energia Limpia)

BUENOS AIRES – Rofex contracts forecast the Argentine peso will be at $16 to the dollar in July, $17 by October and $18 by January 2017. Depending on the term, the Lebac, the peso-denominated debt instrument issued by Argentina’s Central Bank, yields between 13% and 33% after FOREX insurance and 1% commission. The Bonad 2016, which matures at the end of October, yields 12% in dollars, while the Bonad 2017, which matures February 2017, has an IRR of 10.5%, the same as the Bonad 2018. The City of Buenos Aires 2019 bond pays 11% while the 2020 pays 11.6%. (Cronista/FDI)

PANAMA – Argentina wants to capture more foreign investment and take advantage of the “enormous business opportunities” that have opened up after a decade of Kirchnerism. That was the message of Argentina vice-president Gabriela Michetti who spoke at the opening of Expocomer in Panama. “Our country is once again attractive for investors worldwide. The whole design of our approach to government administration is to encourage businesses to invest their energies in new ventures.” (Globovision)

BUENOS AIRES – Argentina and the US have a complex relationship with mutual responsibility for the mutual lack of trust. The US is our third most important trade partner and close to 500 US companies have invested over US$14 billion in our country; however, there are numerous problems to resolve: patents, corruption, lack of transparency which make our country unattractive for investors over the long-term, according the State Department. In this sense, we can once again change history.” (Op-ed by Lic. Juan Battaleme in Clarín)

BUENOS AIRES – The Post-Default Country is the headline of an iProfesional analysis which interviews several economists who share the opinion that an agreement with the holdouts is a necessary first step, but one that will be insufficient to restore confidence and investment in Argentina. “You can’t exaggerate this. This will be the removal of an obstacle, but it will not generate all of the necessary conditions to mobilize investment,” says former Finance Secretary Daniel Marx throwing cold water on recent speculation over US$30bn of new bond sales this year. (iProfesional)

LATIN AMERICA – The region’s state oil companies are no longer the generous source of revenue they were over the past decade, writes Diario Financiero’s Ainhoa Murga. The combined debt of the four state oil companies in Brazil, Colombia, Mexico and Venezuela is US$275 billion and, Murga writes, “in the event of collapse would be a milestone in the region, almost tripling the default of Argentina in 2001. With liabilities of US$130 billion, almost four times more than in 2010, Brazil’s Petrobras is the most indebted company in the region.” (Diario Financiero)

BUENOS AIRES – Argentina’s Judiciary is investigating the possibility of bribes paid to almost 100 companies on the suspicion they could have ties back to the Petrobras scandal being investigated under Operation “Lava Jato, the largest corruption investigation in the history of Brazil. The Argentine prosecutor leading the investigation, Sergio Rodriguez, says authorities are examining payments made between 2006 and 2012, because there is reasonable suspicion the payment scheme in Brazil was replicated in Argentina. (El Economista)

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