“The day you think there is no improvements to be made, is a sad one” - Lionel Messi (Argentine footballer)

MARKETS

September 19, End Of Day

• Argentina
  • S&P MERVAL Index = 1,847,053.09 (YTD = 98.67%)
• Brazil
  • BOVESPA Index = 133,122.67 (YTD = -0.76%)
• Chile
  • S&P IPSA Chile = 3,432.10 (YTD = -1.02%)
• Colombia
  • MSCI COLCAP = 1,320.58 (YTD = 10.49%)
• Mexico
  • IPC Mexico BMV = 52,918.04 (YTD = -7.79%)
• Peru
  • S&P/BVL Peru = 29,213.76 (YTD = 12.53%)

BUSINESS

Brazil's Dual Role: Climate Champion and Oil Producer

Brazil finds itself at a crossroads, striving to become a global leader in the fight against climate change while simultaneously seeking to expand its oil production to boost economic growth.

1. Brazil’s Global Climate Leadership

• Luiz Inácio Lula da Silva, Brazil’s president, has positioned the country as a global leader in the fight against climate change. Since taking office, Lula has focused on curbing deforestation in the Amazon, achieving a significant reduction in deforestation rates in 2023. His government has also pledged to end all deforestation by 2030 and increase Brazil’s emissions reduction targets.
  • Amazon Deforestation: Under Lula’s leadership, Amazon deforestation rates dropped by 42% during his first year in office.
  • Renewable Energy: In 2023, 89% of Brazil’s electricity came from renewable sources, the highest in the G20.

2. Brazil’s Push to Become an Oil Giant

• While championing climate initiatives, Brazil also aims to become the world’s fourth-largest oil producer, up from eighth place. The discovery of vast oil reserves in the “pre-salt” layer has made oil central to Brazil’s economic strategy. The government plans to expand offshore drilling, including controversial proposals near the Amazon.
  • Oil Output: Brazil produced 3.2 million barrels of oil daily in June 2023, accounting for 10% of the country’s GDP.
  • Pre-Salt Reserves: These reserves, located deep underwater, are seen as key to Brazil’s future oil production and economic growth.

3. Balancing Sustainability and Economic Growth

• Brazil faces criticism for its dual role, with environmental activists arguing that expanding oil production undermines its green credentials. However, the government argues that oil revenues are crucial for poverty alleviation and funding the country’s energy transition.
  • Controversial Oil Drilling: The proposal to drill in the Foz do Amazonas basin has sparked opposition, with concerns about the environmental impact on ecologically sensitive areas.
  • Revenue Potential: The government estimates that new offshore reserves could generate $200 billion in tax revenues, which could be used for social and environmental projects.

Fundraising picks of the week

Pura Mente: Pura Mente is a leading wellness and meditation platform, with consistent growth traction (25% QoQ), over 30k paying users, and more than 2 million downloads. Dive deeper into the case here.

Aperta Salud: A chain of low-cost primary healthcare centers with a focus on user experience and digital solutions, to empower patients in Bolivia to receive efficient inclusive, and affordable healthcare. Dive deeper into the case here.

Cuadds: Productivity tool designed with Lego-like elements, offering flexibility and power in managing tasks, projects, files, and messaging all-in-one unified platform. Get to know the case here.

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Dive deeper into other fundraising firms in LatAm here.

CURRENT AFFAIRS

Peru: Peru's economy expanded for the fourth consecutive month in July, growing by 4.47% year-on-year, surpassing central bank estimates. This growth was driven by gains in manufacturing, up 10.91%, and the mining and hydrocarbons sector, which grew 3.10%. However, the agriculture sector contracted by 3.93% due to weather issues and early harvesting. Peru, a major copper producer, is targeting 3.2% economic growth for 2024 after a 0.6% contraction last year.

Mexico: MercadoLibre has secured $250 million in financing from JPMorgan to boost its fintech arm, Mercado Pago, in Mexico. The deal aims to expand Mercado Pago’s credit offerings, benefiting small and medium-sized businesses. Mercado Pago has seen rapid growth in the country, with its loan portfolio reaching $1.5 billion by mid-2024. The fintech is also pursuing a banking license in Mexico to offer services like savings accounts, loans, and mortgages.

Colombia: Colombian startup Rappi, backed by SoftBank, could be ready for an IPO on the New York Stock Exchange within 12 months, according to cofounder Simon Borrero. The on-demand delivery app operates in nine Latin American countries and has a valuation exceeding $5 billion. Despite being IPO-ready, Borrero emphasized that Rappi is not in a rush due to its current profitability.

FURTHER READING

Check our recently published insights here. Recent post:

🚀 Transforming HR Practices with HRtech in Latin America

HRtech is reshaping human resources in Latin America, enabling businesses to manage their human capital more efficiently and adapt to evolving market demands.

Emerging Trends in HRtech:

1. 🌐 Cloud-Based HR Systems: Enhancing scalability and remote accessibility, helping businesses thrive in hybrid work environments.
2. 🤖 AI in Recruitment: Streamlining hiring processes and improving the quality of talent acquisition.
3. 📈 Talent Management Platforms: Leveraging data to optimize employee development and performance management.
4. 🔍 Predictive Analytics: Using data to anticipate workforce trends and improve employee retention and productivity.
5. 🌟 Employee Engagement Platforms: Boosting morale and maintaining engagement in increasingly remote work settings.

As the region embraces digital transformation, these innovations are crucial for companies aiming to remain competitive and responsive to the fast-paced changes in the global market.

🔍 Read more here.