Publish in Analysis - Thursday, December 17, 2020
Sao Paulo, Brazil's business hub. Brazil's economy fared better than expeected this year and also surprised with a boom in IPOs, largeeely led by local investors. (Photo: Sao Paulo City Government)
The best news in Latin America business in 2020.
BY LATINVEX EDITORS
The best events in Latin American business this year, according to Latinvex editors.
#1 Brazil IPO Boom
Despite COVID-19 and an economic crisis, Brazil this year saw a boom in initial public offers – most recently the $2.2 billion IPO of Brazilian hospital company Rede D'Or São Luiz -- the largest IPO in Brazil since 2013.
The boom has been largely spurred by historically low interest rates that have attracted local investors to the stock market. In fact, this boom has largely been driven by local rather than foreign investors.
Initial expectations for a record year gradually damned as many planned IPOs were shelved due to oversupply of offers.
Yet, there is no doubt that the many IPOs this year were a welcome surprise amidst the pandemic and related negative impact on the economy.
#2 USMCA Implemented
On July 1, 2020 the United States-Mexico-Canada Agreement (USMCA) entered into force and replaced the North American Free Trade Agreement (NAFTA), which had been in place since January 1994.
Despite criticism that USMCA is actually worse than NAFTA, many see it as better than the alternative – no U.S.-Mexico trade agreement, as could well have been the result thanks to the anti-NAFTA and anti-Mexico bias and protectionist policies of President Donald Trump.
#3 Brazil Recovers Faster Than Expected
Brazil’s economy has been recovering much faster than expected.
Brazil surprised analysts with stronger-than-expected employment and budget numbers for October, a sign that the economic recovery seen in the past few months is gaining speed in the beginning of the fourth quarter, Bloomberg reported.
The key auto sector has also fared better than initially feared.
#4 Mexico Drives Major Deals Mexican companies led the way in top deals in Latin America this year. Mexico-based America Movil sold its US-based prepaid phone business Tracfone to Verizon for $6.1 billion, while US-based Sempra upped its stake in its Mexico unit IEnova by $6.1 billion. They helped offset what is expected to be a lacklustre 2020 when it comes to M&A activity in Latin America.
#4 Mexico Drives Major Deals
Mexican companies led the way in top deals in Latin America this year. Mexico-based America Movil sold its US-based prepaid phone business Tracfone to Verizon for $6.1 billion, while US-based Sempra upped its stake in its Mexico unit IEnova by $6.1 billion.
They helped offset what is expected to be a lacklustre 2020 when it comes to M&A activity in Latin America.
#5 Dominican Republic Changes Course
Four months into his presidency, Luis Abinader has shaken up the Dominican Republic – in a positive way.
He has significantly boosted transparency in the traditionally corrupt country, started to cut needless government waste and managed the economy prudently amidst the COVID-19 crisis.
His handling of the key tourism sector has won particular praise.
Meanwhile, Abinader’s decision to grant full independence to the Attorney General’s Office has helped it as it pursues several cases linked to relatives of former president Danilo Medina and re-initiates Odebrecht bribe probes that were mishandled by the Medina government.
© Copyright Latinvex
LATIN AMERICA BUSINESS: YEAR IN REVIEW
Latin America Business: Best