“Necessity made me” - Antonio Valencia (Ecuadorian footballer)

MARKETS

August 15, End Of Day

• Argentina
  • S&P MERVAL Index = 1,643,874.96 (YTD = 76.82%)
• Brazil
  • BOVESPA Index = 134,153.42 (YTD = -0.02%)
• Chile
  • S&P IPSA Chile = 3,471.26 (YTD = 0.11%)
• Colombia
  • MSCI COLCAP = 1,360.00 (YTD = 13.79%)
• Mexico
  • IPC Mexico BMV = 54,264.92 (YTD = -5.44%)
• Peru
  • S&P/BVL Peru = 28,952.53 (YTD = 11.53%)

BUSINESS

The Energy Transition

Latin America’s energy transition is progressing, but the region faces unique challenges that could impact its future sustainability goals. Here are the three main takeaways from the World Economic Forum’s 2024 report on fostering effective energy transitions:

1. Slow Growth in Energy Transition Index (ETI) Scores

• Latin America’s ETI scores have increased by only 3% over the past decade, marking the slowest growth among global regions.
• Despite leading in sustainability due to hydropower reliance, investment in renewables has dropped by 70% over the same period.
• Declines in education, human capital, and innovation scores are undermining long-term sustainability efforts.

2. Brazil and Chile: Regional Leaders with Challenges

• Brazil: Long-term commitment to hydropower and biofuels; recent solar energy expansions; potential global leader in energy transition.
• Chile: Significant improvements in renewable energy capacity; reduced energy imports; strong potential for energy independence.
• Both countries need to focus on energy equity and social implications of the transition.

3. Opportunities for Acceleration

• The region’s abundant renewable energy resources (solar and wind) provide a strong foundation for growth.
• Increased investments in education, innovation, and infrastructure are crucial to overcoming current challenges.
• Strengthening regulatory frameworks and public-private partnerships could drive further progress.

Fundraising picks of the week

TELL Toolkit Inc: TELL Toolkit is pioneering the use of AI in digital health to analyse speech for early detection of neurodegenerative diseases such as Alzheimer's and Parkinson's. This innovative, low-cost solution is remote, non-invasive, and quick, offering analysis within 5 minutes and achieving gold-standard accuracy. Get to know the case here.

Biotalife Skin: Biotalife Skin harnesses technology to transform skin health, offering tailored treatments based on real microbiome testing. Their patented mixing device uniquely blends capsules with a vehicle, ensuring customized care. Dive deeper into the case here.

Kigüi: Kigüi uses AI to cut food waste and optimize supply chains, boosting sales of CPGs in supermarkets. Operating mainly in Mexico and Argentina, Kigüi partners with brands like Heineken and Walmart, achieving 5X revenue growth in Q2 2024. Dive deeper into the case here.

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Dive deeper into other fundraising firms in LatAm here.

CURRENT AFFAIRS

Brazil: The World Bank issued a $225 million, nine-year bond linked to Amazon reforestation, its largest outcome bond yet. The bond, fully principal-protected, ties returns to carbon removal efforts in Brazil. A portion of proceeds supports reforestation by Brazilian company Mombak, with Microsoft purchasing the carbon units. Returns range from 1.745% to 4.362% based on project success.

Mexico: Mexico’s central bank cut its interest rate to 10.75% amid slowing economic growth and global volatility. Despite rising inflation, the bank focused on downside risks, with growth forecasted at 1.8% for 2024. The peso strengthened after the decision, but economic uncertainties remain, especially with the upcoming left-wing government under Claudia Sheinbaum.

Argentina: Explorador Capital predicts Argentina could lead global returns over the next five years under President Javier Milei. The investment firm highlights the potential of Argentine assets, driven by reduced government size, economic reforms, and expected capital inflows. Key sectors like energy, agriculture, and financial services are positioned for growth. Explorador Capital plans to increase its investments in Argentina as conditions improve, particularly with the anticipated removal of capital controls.

FURTHER READING

Check our recently published insights here. Recent post:

🚀 AI Startups in Latin America

The AI startup ecosystem in Latin America is expanding, with a diverse range of companies applying AI across sectors such as healthcare, finance, and agriculture.

Key Points:

• Talent Development: The region hosts a growing number of skilled AI professionals.
• Investment Growth: Increased funding from various sources supports the development of AI startups.
• Global Expansion: Startups are reaching beyond local markets, addressing global needs.

Challenges like funding access and regulatory environments remain, but the sector continues to grow, supported by initiatives like the Latin American Artificial Intelligence Index launched at ECLAC.

🔍 Read more here.