"What I recommend to young people is to study, prepare and enjoy the process." - Reynaldo Pacheco (Bolivian actor)

MARKETS

May 22, End Of Day

• Argentina
  • S&P MERVAL Index = 2,314,896.98 (YTD = -8.36%)
• Brazil
  • BOVESPA Index = 137,272.59 (YTD = 14.12%)
• Chile
  • S&P IPSA Chile = 4,367.95 (YTD = 20.84%)
• Colombia
  • MSCI COLCAP = 1,641.31 (YTD = 18.97%)
• Mexico
  • IPC Mexico BMV = 57,894.82 (YTD = 16.93%)
• Peru
  • S&P/BVL Peru = 31,087.40 (YTD = 7.34%)

BUSINESS

Key Outcomes of the Recent Brazil-China Meeting

Last week, Brazilian President Luiz Inácio Lula da Silva visited Beijing for a high-level summit with Chinese President Xi Jinping. The meeting marked a major milestone in bilateral relations, resulting in a wave of new agreements and investment commitments designed to shape cooperation for the next five decades.

Major Agreements and Strategic Cooperation

• Brazil and China signed 20 new agreements and adopted 17 additional documents aimed at strengthening cooperation across diverse sectors for the next 50 years. These agreements cover areas such as technology transfer, infrastructure, artificial intelligence, energy transition, climate, and trade diversification.
• A notable agreement includes the joint establishment of a Technology Transfer Center and a declaration of intent to share space data with Latin American and Caribbean countries.

Economic and Trade Initiatives

• Both countries reaffirmed their commitment to defending free trade and multilateralism, explicitly opposing unilateralism and protectionism in global commerce.
• China remains Brazil’s largest trading partner, with bilateral trade reaching $160 billion. The leaders expressed a desire to diversify exports beyond commodities and increase the value-added content of traded goods.
• China lifted previous restrictions on Brazilian soybean exports from five companies, reinforcing Brazil’s dominant role as a supplier to China, which sources over 70% of its soybean imports from Brazil.

Investment Commitments

• Chinese companies pledged significant investments in Brazil, including more $1.05 billion USD in the port sector and interest in major infrastructure projects like the Santos-Guarujá Tunnel.
• Additional investments were announced in renewable energy, technology, and the automotive sector, with companies such as Envision, Meituan, CGN Power, and Great Wall Motor outlining projects totaling billions of dollars.

CURRENT AFFAIRS

Argentina: The government approved Rio Tinto’s $2.5 billion Rincon lithium project in Salta, the first greenlit under its new RIGI investment regime. The move aims to revive investor confidence amid delays for other mining applications and to boost foreign currency inflows. Argentina, the world’s fourth-largest lithium supplier, is prioritizing the sector to support economic stability.

Latin America: Startup investments in the region rose 26% in 2024, outpacing Europe and Southeast Asia, according to Endeavor and Glisco Partners. Growth was led by mature companies, with later-stage rounds making up 65% of total capital, though local investor participation remained low. Mexico and Argentina stood out, with fintechs like Clip, Justo, and Uala driving large deals.

Brazil: The government raised its 2025 GDP growth forecast to 2.4%, citing stronger agriculture and Q1 performance, while inflation is now seen at 5.0% this year. The Finance Ministry warned of slower growth ahead due to high interest rates, now at a 20-year peak of 14.75%. Officials said it's too early to assess the economic impact of the country's first commercial bird flu outbreak.

FURTHER READING

Check our recently published insights here.

🌱 ESG in Latin America: Challenges and Opportunities

• Early but Rising Adoption – Only 45% of companies have ESG strategies; fewer than 20% have dedicated sustainability officers.
• Transparency Lags – Less than 40% publicly disclose ESG data; over half are unprepared for global reporting standards.
• Uneven Progress – Chile leads in ESG adoption, while Brazil and Mexico face distinct environmental and social priorities.
• Opportunity Ahead – Emissions reduction, circular economy, and community engagement could position the region as a sustainability leader.

📖 Read more here.