The Argentina Investment Report for April 5, 2016

By Patrick Archer

MADRID – Only four years removed from Argentina’s expropriation of YPF under the Kirchner administration, Spanish companies are looking at Argentina with renewed optimism. This week executives from Abertis, BBVA, Gas Natural, Gestamp, Iberia, Mapfre, NH, and Santander traveled to Buenos Aires to participate in yesterday’s Argentina-Spain Business Forum at the Alvear Palace Hotel. After the United States, Spain is currently the largest foreign investor in Argentina with accumulated capital of US$8.9 billion. “The central idea behind the reforms of Macri is to bring order to the chaos, eliminate bureaucratic hurdles that discourage investment, and create a legal framework for companies,” writes Expansión’s Yago Gonzalez. (Expansión)

BUENOS AIRES – The three-year period from 2013 to 2015 was the worst stretch in history for new construction in Buenos Aires. In 2015, the 6.64 million square feet (617,00 m2) of new construction in BA was less than 30% of the historic average, according to Reporte Inmobiliario. The total area of new construction fell from 24 million square feet in 2011, the year USD currency controls were implemented under the previous administration, to less than 8 million in only two years. Between 2002 to 2015, almost 40% of Buenos Aires new construction has taken place in the top five (out of 48) barrios in Capital Federal: Palermo, Caballito, Villa Urquiza, Belgrano and Flores. (Reporte Inmobiliario)

PANAMA – This week’s leak of over 11 million files from one of the world’s largest offshore law firms, Mossack Fonseca is making headlines across Latin American countries including Argentina where the files include the names of 570 Argentine businessmen, celebrities, politicians and pro athletes. For neighboring Brazil, the “Panama Papers” indicate 107 offshore companies with ties to the current Petrobras scandal, Operation Car Wash. And in Chile, the release of the Panama Papers resulted in the immediate resignation of the president of…wait for it…Chile Transparente, the Chilean chapter of Transparency International. (BBC Mundo)

MONTEVIDEO – A combination of factors including the Fed’s reluctance to raise interest rates, portfolio diversification on the part of institutional investors, and the strong reputation that Uruguay has among emerging markets is generating increased demand for Uruguay paper among Argentines and other foreign investors, says FDI’s Mariano Sardans in an interview with El Observador. The BVMBG index of Uruguay bonds is up 5.2% over the past 70 days and its highest level since last June. Simultaneously, the country’s risk index, as measured by JP Morgan, fell another 30 basis points last month to 274 compared to 427 in Brazil and 459 in Argentina.  (FDI Argentina)

ROSARIO – Even though Argentine farmers are in full summer harvest mode with corn and soybeans, trade activity at the Bolsa de Comercio was limited yesterday due to the heavy rainfall which is limiting grain shipments to the various ports along the Paraná. Soybeans are trading between 3,100 and 3,300 pesos (US$210-224), while the May position for soybeans at the MATBA remains stable at US$221 per ton and the July contract dipped slightly to US$227.40. The global strength of soybean oil prices and weakness of the dollar against the Euro, which boosts the competitiveness of US commodity exports, is limiting the downside of soybean prices locally, writes La Nación’s Dante Rofi. (La Nación)

BUENOS AIRES – Argentina capital, investment funds and international markets took center stage at the two-day Argentine Economic Congress held at the Hilton Puerto Madero, according to dbiz. today. Panel discussions at the 4th annual expo covered a wide range of topics related to Argentina’s capital markets and borrowing needs. “The public sector will need US$19 billion this year, and the provinces and private sector will need US$6 billion or US$25 billion in total. If Argentina is going to grow 4% this year, we will need between US$25 and $30 billion in debt plus equity issuance and foreign direct investment,” said Alejo Costa, Head Strategist at Puente. (dbiz.today)

CORDOBAStarbucks Coffee Argentina is opening its fifth location in Córdoba near the Plaza España at Jose Manuel Estrada 175. The 2,700-square foot location with natural tones and wood accents has capacity for 170 patrons with 17 baristas and staff providing the Starbucks Experience, according to Webretail. Córdoba is the Argentine city with the second-most number of locations with a total of five; there are now 96 locations nationwide. With SBUX locations in Argentina, Mexico, Chile, and Colombia; Mexico-based Alsea plans to quadruple its number of locations over the next decade. (Webretail)

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