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MoneyShow: Why Argentina Is Latin America’s Hidden Treasure

On December 14, 2010, In a-bric, foreign investment, by InvestBA
BBVA Argentina

BBVA, one of MoneyShow's picks, understands Argentine consumers like to hide their personal treasure.

A confluence of good news yesterday on several fronts: The market price for Argentina’s three major AgExports rose, the country risk fell another 3.5%, LCD prices have fallen 30% since the World Cup and debt repayment negotiations began in earnest with the Paris Club.

Despite the onda positiva, it’s important to remember that each of these indicators is highly volatile and subject to external variables like extreme weather, unforeseen risk, punitive tariffs and French egos. So what about something more tangible, more long-term, more big picture to hang our collective hopes on?

MoneyShow and Carla Pasternak’s Global Perspectives to the rescue. Pasternak, director of income research for High-Yield International, scours the globe looking for income plays in developing countries, and she certainly seems fond of Argentina. “A Hidden Treasure,” “the fastest-growing country in the region,” and “the booming country” are just three of the cumplidos macroeconomicos she sends Argentina’s way.

True, inflation is above normal and investor confidence was crippled a decade ago with the $95 billion default but, writes Pasternak, “The good news is all that is in the past. Argentina is in the midst of an economic revival.” One of the keys to success is the shifting nature of Argentina’s external dependence away from the Untied States and rapidly towards BRIC nations like Brazil which imports the majority of Argentine auto production, China which has joint ventures stretching from Tucuman to Tierra del Fuego and India which continues to broaden bilateral relations with Argentina. (Full Story)

For more information about Argentina investment opportunities, download the new issue of InvestBA Privada.

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“Virgen Extra”: Argentina Olive Oil Investments

On July 22, 2010, In a-bric, energy & agriculture, entrepreneurs, foreign investment, by InvestBA
Argentina Olive Oil

With global demand & changing consumption patterns, olive oil has grown into a  $10 billion dollar industry.

Of all the agribusiness investment opportunities in Argentina and Uruguay, olive oil estates are some of the youngest and most promising. Increasingly health conscious consumers in foreign countries are stoking global demand for olive oil which has tremendous health benefits including heart disease protection and colon cancer prevention.

Industry publication Olive Oil Times says Argentina has capitalized on growing demand in both aging and emerging markets like China and recent droughts in the Mediterranean to emerge as a major producer of aceite de oliva.

The online magazine features an interview with Luis Feld, agribusiness expert, former president of the Terranova winery and current owner of a large olive oil estate in the Cuyo region that produces the Vero Andino product line. Even though Feld only planted his first trees five years ago, the success prompted his group to launch a company that markets and sells fractional ownership opportunities in other Cuyo-based olive oil estates.

With global consumption approaching 3 million tons per year and average price per ton around US$3,600, we are talking about a roughly US$10 billion industry. In addition to annual rents of 18-20%, the group touts olive oil fractionals as “an attractive alternative for those who believe land, water and agribusiness are strategic businesses of the future.”

For more information on agribusiness opportunities in Argentina and Uruguay, visit our archives and download the new issue of InvestBA Privada.

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China To Back Argentina Rail Renaissance

On July 15, 2010, In a-bric, foreign investment, by InvestBA
The Belgrano Cargas rail line in Argentina

The Belgrano Cargas line connects BA with 13 of Argentina's richest commodity-producing provinces.

With close to 30,000 miles of functioning tracks, Argentina’s rail network was one of the world’s most extensive and profitable by the middle of the last century, but you wouldn’t know it by visiting the country today.

Sixty years of neglect have left the once robust freight and passenger railroads a rusting shell of their former selves. For example the train connecting Buenos Aires and Cordoba was suspended in 1993, reinstated in 2005, but today the tracks are so dilapidated the 385-mile trip can take as long as two days.

The most recent glimmer of hope for a rail renaissance was the 2008 announcement of a Bullet Train (Tren Bala) connecting Buenos Aires and Cordoba, but there has been no progress on that front for two years.

Now it seems an Argentina rail renaissance may actually begin with backing and financial support from the world’s largest importer of just about everything: China. No stranger to infrastructure development projects in Africa and the Americas to expedite the flow of commodities she craves, China has committed to work on Argentina rail projects valued at roughly $10 billion.

According to Bloomberg, the rail upgrades will take place on the The Belgrano Cargas line, a freight network connecting BA with 13 provinces, and the Ferrocarril Belgrano. Future Chinese-backed infrastructure enhancements in Argentina may also include a $1.8-billion subway system for Cordoba and a rail line extension connecting BA with Ezeiza International Airport.

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The Argentine Economy Recovers Strength

On June 28, 2010, In a-bric, competitiveness, foreign investment, by InvestBA
Argentina Real GDP Growth graph in Wells Fargo Report

With private expenditure and GDP growth, Wells Fargo sees signs of a recovery in Argentina.

The buzz about Argentina seems to be having an impact on investors of all stripes. After Sunday’s 3-1 defeat of Mexico, global betting sources say the Albiceleste’s odds of winning the World Cup improved to 15/4, third only to Spain and Brazil. Whether sports gambling qualifies as “investing” is certainly open to debate; however, a more sober cadre of long-term investors are also starting to take note.

San Francisco-based financial giant Wells Fargo featured an unlikely subject for this week’s front-page Economic & Financial Commentary: Argentina. The analysis showed Argentina’s 7.9% growth rate in the 4th quarter of 2009 followed by a healthy 6.8% year-over-year rate in 1Q10.

Meanwhile, Argentine private consumption expenditures which rose a mere 0.5% in 2009, grew 7.3% in the first quarter of this year alone. The nation’s spending recovery is also reflected in the current trade balance, as imported goods and services jumped 30% in the first quarter. Unfortunately, exported goods and services only rose 4%, although Wells Fargo notes the strength of the Brazilian economy as a contributing factor in Argentina’s recovery.

While over-dependence on Brazil’s fortunes is a concern, the ongoing China soy conflict highlights the need for 1.) less federal government intervention and 2.) cultivation of more international trade relationships in the Americas, the Euro-zone and Asia. To read the full Wells Fargo Securities report, click here.

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Score! Argentina Meets China in the 2010 World Cup

On June 10, 2010, In a-bric, arts & entertainment, lifestyle, by InvestBA
Chinese Models World Cup 2010

Chinese advertisers are banking on scantily-clad models draped in Argentine and Brazilian jerseys.

Much to the delight of fans here in Argentina and Uruguay, the 2010 World Cup begins its month-long run tomorrow in South Africa. Earlier this week, we looked at Argentine and U.S. brands spending millions on sponsorship deals and advertisements to create an emotional connection with fan bases whose loyalty knows no bounds.

But what happens when you have 1.3 billion fans and you don’t qualify for the 32-team field? Well, according to People’s Daily, you should capitalize on two truisms in advertising: 1.) Sex sells, and 2.) Associate yourself with winners.

Toward that end, Chinese networks, advertisers and websites are all featuring dozens of local models draped in jerseys of Argentina, Brazil and other tournament favorites. “First off the plane will be the ‘Soccer Super Babes’ group G3, who are being touted as the first Chinese dancers to perform at the opening ceremony of the World Cup,” writes the Daily adding one minor detail, “there does seem to be a certain amount of ongoing discussion about when they will actually perform.”

While CCTV will broadcast all 64 games, other Chinese networks will go a different route. Model Zhai Ling will host a program on World Cup fashion. Ironically, the article notes, she became famous for not wearing clothes on the Internet. Not to be outdone in the soccer skin game, another Chinese website “released 32 pictures of babes representing the squads, dressed in just bikini bottoms and body paint.”

So even if they won’t be fielding a team this year, it seems China is setting a new standard for World Cup exposure. (Full Story)

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