With 37 million clients and 5,800 branches, Santander is the leading bank franchise in Latin America.

If you had any doubts about where the smart money is moving globally, you might want to take a look at Grupo Santander, the largest bank in the Euro-zone and one of the largest banks in the world. In recent interviews with everyone from Bloomberg to El País, Santander officials are understandably bullish on Argentina, Brazil and Latin America in general…so much so bank executives feel the region will outperform Asia in the coming years. Santander’s Director for the region Francisco Luzon sees the XXI century as Latin America’s inflection point: “In this century, Latin America will move beyond being a ‘developing’ region. Latin America has talent and structural competitive advantages that will make it a winner in the XXI century.” Luzon believes Latin America is the region best positioned to benefit from the process of globalization, while banks like Santander are well positioned to capitalize on the continued bancarización of LatAm. Santander estimates the financial systems of the seven core Latin countries—Brasil, México, Argentina, Chile, Perú, Colombia y Uruguay—have a current valuation of US$500 billion and could reach $1 trillion by 2015. If full-year projections for 2010 are any indication of what’s to come, it’s easy to understand why a bank like Santander sees the future in Latin America. According to Bloomberg, the region will account for 45% of the bank’s profit this year, up from 39% in 2009.

Dame Dos: BA's Villa Crespo has quickly become the epicenter of outlet shopping in Argentina.

It used to be that Argentines had to travel roughly 4,500 miles to South Florida or Orlando’s International Drive to indulge in deep discount retail therapy, but it seems the outlet concept has caught on fire in one BA neighborhood. Villa Crespo has long been known as a solid, middle-class residential neighborhood, but the 2001 financial crisis left this BA barrio with several abandoned warehouses and residences. Today, according to Clarín, many of those buildings are being bought for upwards of US$500,000 and converted into the BA equivalent of Sawgrass Mills. The phenomenon began five years ago when several large BA clothing stores started opening their first outlets around Gurruchaga and Aguirre. Today there are over 60 outlets in a four-block zone and close to 100 in a 10-block region. The retail pioneers like Hunor Gobos closed their stores on Avenida Florida five years ago, opened the first VC stores and have watched sales and shoppers grow every year since. Clarín says the Boom de los Outlets has really exploded over the last ten months, and the area is teeming with bargain-seeking tourists, especially Brazilians, Chileans and Uruguayans. Daniel Chain of the Buenos Aires Department of Urban Development says prices in Villa Crespo are still lower than Palermo but says they will continue rising, as Villa Crespo will be one of the prime beneficiaries of GCBA’s new infrastructure to control flooding. As for the name of the new retail zone, some refer to it as Palermo Queens, while others call it Villa Crespo Nuevo. Personally, we like the sound of Porteño Mills. (Full article in Spanish)

Regions like San Rafael offer foreign investors a region reminiscent of Sonoma County in the 1970s.

Politicians are a bit like chess players in the way they are constantly plotting their next moves: pushing new agendas, pursuing re-election or seeking higher office. But for one Alaska politician, the next move was as original as it was unexpected. Wasilla City Council member Nancy Hall announced she will step down from her post and move with her husband to run a vineyard in San Rafael, Argentina. Hall and her husband, Gary, traveled to Chile looking for vineyard opportunities in 2009. She returned to work in Alaska but Gary began to focus on Argentina vineyards after visiting their son in Buenos Aires. A few days later Nancy says, “I got this phone call that said, ‘Honey, I bought a vineyard.’“ The couple told the Anchorage Daily News that San Rafael reminds them of California’s Sonoma County in the 1970s before it exploded. Their newly-acquired vineyard, Shadow of the Andes, grows the increasingly-popular Bonarda grapes, but Hall is quick to clarify their role in the overall Argentine wine supply chain: “We grow the grapes, we don’t make the wine.” The couple plans to keep their Wasilla home and divide time between Alaska and Argentina enjoying what the ADN calls “a life of perpetual summer spanning the two hemispheres.” For more information about Argentina vineyards, visit our archives and for a list of vineyards for sale, download the July edition of InvestBA Privada.

Any Questions?: Much like his country, striker Diego Forlan is slowly silencing Uruguay's skeptics.

One of the greatest story lines in this year’s World Cup has been Uruguay. When the tournament started June 11, many futbol experts believed they would lose in the First Round to the likes of mighty France and Mexico. All eyes and wagers were on perennial powerhouse neighbors Brazil and Argentina. When Uruguay advanced to the Round of 16, we contrasted the Maradona-stoked cockiness of Argentina with the humble, workmanlike approach of Uruguay. Now both neighbors are home and Uruguay is two wins away from hoisting its third World Cup. Marie Elena Martinez, a travel writer for the Miami Herald proves Uruguay’s skeptics are alive and well off the field as well. “A lover of big cities, I arrived in Montevideo, Uruguay with low expectations,” she writes, “I wasn’t sure Uruguay could offer anything different than South American spots more popular with tourists — Chile, Argentina and Brazil.” Arriving at Montevideo’s ultra-modern Carrasco International Airport is often a foreign visitor’s first taste that expectations will soon be exceeded. Over the course of her visit, Martinez discovers the beaches of Pocitos, the Mercado del Puerto, the Plaza Fabini and the 14-mile winding waterfront, La Rambla. By journey’s end, her confession is a familiar refrain among one-time doubters in the Switzerland of South America: “I was exhausted, but no longer skeptical. Yes, absolutely: Uruguay.” For more information about investment opportunities in Uruguay, visit our archives or download the July 2010 edition of InvestBA Privada.

Let this ferment: Grape price and yield per acre are the key variables global vintners must consider.

Global investors must weigh a variety of factors like country risk, capital controls and transparency before choosing where in the world to invest. But what about winemakers? The number of wine producing countries (70) is over twice the number of teams playing in this month’s World Cup (32). Plus global grape production (675 million quintals last year) was widely distributed across Europe (44%), Asia (26%), Americas (21%), Africa (6%) and Oceania (3%). With so many choices, what’s a future global vintner to do? Focus on the key metrics, grape prices and yield per hectare (1 ha = 2.47 acres), says Davidson Viticulture, a leading Australian viticulture consulting group. When it comes to grape prices, three of the world’s most attractive markets are Argentina ($2,354/ha), Chile ($2,480/ha) and South Africa ($2,051/ha). At 15-20 tons/ha, California leads the global ranking in terms of average yield compared to 10-15 tons/ha for Argentina and Chile; yet, factor in California’s six-figure cost per acre and South America vineyards begin to make more sense for those seeking lower initial cash outlay and quicker ROI. Furthermore, Davidson says advanced technology and irrigation techniques give growers in regions like California and Australia “no real advantage” over the world’s other warm climate regions like South America and South Africa. For more Argentina wine and vineyard news click here, and for a closer look at Mendoza vineyards for sale, download the July edition of InvestBA Privada.

Production was down, but the 2010 vintage is already being compared with '02. (Photo: Die Guito)

“Better Late Than Never.” That’s how Wine Spectator describes the 2010 harvest in Argentina, a year marked by a slow sugar start, some potentially-damaging weather fluctuations and, ultimately, a lower level of wine production compared to 2009. But fear not, the finished product is still outstanding. “Argentinean winemakers are pleased with lower alcohol levels and ripe tannins which they believe have produced an elegant vintage,” writes James Molesworth. That’s the general consensus from the various winemakers interviewed by WS including Bodegas O. Fournier, Achával-Ferrer and Bodega Catena Zapata. Yields were down anywhere from 10-25% for most of the vineyards in Mendoza, but the lower alcohol levels have produced some beautifully-balanced tempranillos and syrahs. Across the border in Chile, Molesworth says the 2010 growing season was hurt by the earthquake, although some “cool-climate varieties such as Sauvignon Blanc and Pinot Noir” fared well. In other regional wine news, one Chilean producer hopes to boost sales by reaching out to a unlikely group of oenophiles: football fans. Concha y Toro, Chile’s largest exporter of branded wines, just inked a deal with the UK’s Manchester United and will begin advertising alongside Budweiser at home games in the legendary club’s Old Trafford stadium. A Man U rep tried to explain the deal’s synergy, “This is a partnership that unites the two great passions in Latin America: football and wine.” Despite the enthusiasm and Concha’s creative attempt to reach more Asian buyers, we’re not anticipating a Malbec Lounge at the Monumental or Tuesday Tastings at the Bombonera anytime soon. (Wine Spectator 2010 Southern Hemisphere Harvest Report)

Argentina hopes to play more than one game at Johannesburg's Soccer City Stadium.

With only 79 days remaining until the start of World Cup 2010, it seems confidence runneth over among fans of the Selección Argentina.  So far Argentine fans have purchased more match tickets than fans from any other Latin American country, even fierce rival and overall favorite, Brazil. This is quite an emotional turnaround considering the doom and gloom surrounding the club only five months ago when they were on the brink of elimination. According to La Nación, the 25,188 tickets purchased online from Argentina are more than Brazil (18,179), Chile (18,050), Paraguay (8,863) or Uruguay (4,739). Some of the local confidence may stem from headlines in Argentina trumpeting the recent European goal-scoring binges by Lionel Messi and Gonzalo Higuaín. Last Saturday both players scored 3 goals apiece in the Spanish League, and Messi is being referred to as “Dios del Futból” by several media outlets . Off the field, confidence bordering on arrogance was evident when the always-subdued Coach Diego Maradona’s list of remodeling demands for the player’s rooms in Pretoria was made public: Jacuzzis in every bathroom, new LCD televisions, fresh paint and a “perfect” practice field. When asked how the renovations were proceeding, Pretoria General Manager Colin Stlier said, “The work is almost finished, and we are anxiously awaiting the arrival of the great stars from Argentina…although I actually believe it will be easier to keep Messi happy than Maradona.”

Wealthy Argentines prefer cash when buying high-end properties like TGLT's Forum Puerto Madero.

It’s been almost two years since the Argentina stock exchange celebrated an IPO, but local homebuilder TGLT is ready to end the BA Bolsa’s offering drought. The Wall Street Journal’s Matthew Cowley reports, “TGLT plans to raise between $50 million and $70 million from an initial public offering of shares, equivalent to about 30% of the company’s total capital. About half of the shares are expected to be sold in Argentina and the rest to foreign investors.” TGLT and other Argentine real estate companies have waited patiently on the sidelines while private developers in Brazil, Chile and Mexico have raised close to $3 billion in equity capital since 2003. Cowley says TGLT “seeks to emulate the considerable success that home builders have had in (these) Latin American countries…meeting the massive pent-up demand for housing.”  Brazilian firm PDG Realty referenced this “pent-up demand” in a PowerPoint presentation back in 2007 when they purchased a stake in TGLT. Explaining the high-end preferences of the BA market, Jose Rozados of real estate journal Reporte Inmobiliario says, “Wealthy Argentines often eschew the banking system and financial investments, and instead buy property. They aren’t highly speculative investors nor are they looking for quick returns. That makes them fairly solid.” Another bullet point worth considering for foreign companies contemplating joint ventures with Argentine homebuilders: 90% of high-end homes bought in Buenos Aires are cash transactions. A nice change of pace from the mortgage meltdown landscape abroad.

Sebastian Piñera becomes Chile's next President in March. He is pro-business & foreign investment.

2011 will be a critical presidential election year in Argentina and aspiring candidates would do well to look at neighboring Chile and Uruguay for lessons in economic transformation. Both countries have elected presidents who ran on platforms prioritizing pro-business, foreign investment solutions over government programs and additional bureaucracy. Uruguay’s new president, Jose Mujica, takes office in March and “begins an international campaign for enticing investors to the country,” according to UPI. “Mujica said Uruguay needs more investment to create a greater number of better jobs and his government would ensure the right conditions are created for investors to be drawn to the Uruguayan economy. He realized the economy could not be improved only with legislation and that investors needed to have faith in Uruguay’s economic future.” And if Uruguay stands as the emerging model, Chile on the opposite border is the veteran shining star with a solid, twenty-year track record of attracting foreign investment across industries.  Building on that success, Investor’s Business Daily says the election of pro-free market Sebastian Piñera is a symbol “that an already prospering country (is) preparing to soar.” What has been Chile’s recipe for success? It’s really quite simple says IBD: “Instead of blaming the gringos and waging class warfare in Che Guevara T-shirts, they balanced their budget and respected private property. Instead of squandering a $19 billion state windfall from soaring copper prices, they managed it. They continued free-market privatization of pensions without reflexively opposing its origins, and signed free trade pacts with any nation that asked.” If it wants to remain relevant, much less competitive in the global economy, Argentina had better get its act together and do the same.  (Full IBD editorial)

The mighty Touaregs return to Argentina on New Year's Day to compete in Dakar 2010.

After two decades of races from Paris to Senegal, the 2010 edition of the Dakar Rally will be unleashed in the Argentine wilderness on New Year’s Day. Recent political instability in Africa prompted the trans-Atlantic crossing of the annual event to South America last year when the race was first run from Buenos Aires across the Andes into Central Chile, north into the Atacama Desert and back to Buenos Aires. (2009 Course) This year’s event will take place from January 1-17, and tourists, technology and Twitter will play expanding roles building on last year’s success. There were major public turnouts in 2009 given Argentines and Chileans shared love for motor sports, and this year’s course, a brutal 9,000 kilometer, counter-clockwise loop should pull solid crowds in Córdoba, Antofagasta, Santiago and of course BA. (2010 Course) As for technology, Adam Hoover of WhoWon.com says “5 pairs of Volkswagen drivers will battle against other competitors in Volkswagen Race Touaregs powered by 280 hp clean diesel, TDI engines. In 2009, Volkswagen scored a 1-2 victory in the Dakar Rally with its Race Touaregs in the car class. The German duo of Giniel de Villiers and Dirk von Zitzewitz took the win.” Arizona native Mark Miller and teammate Ralph Pitchford (New Zealand) finished second making Miller the highest finishing American in Dakar’s history. While 2.9 million unique visitors followed the race last year online, that number should easily exceed 3 million this year thanks in part to Miller who will Twitter his way through the 2010 Rally. (Official Dakar 2010 Site)