Newsletter July-August 2019

Justice Mendes suspends sanction against Queiroz Galvão

Supreme Court Justice Gilmar Mendes granted an injunction to construction group Queiroz Galvão, suspending sanctions applied in 2017 that prevented the company from being hired by the federal government. At the time, the Federal Court of Accounts (TCU) unanimously declared Queiroz Galvão unfit due to fraud in the bidding process related to nuclear plant Angra 3, in Rio de Janeiro. The fraud is estimated to have cost R$400 million to public coffers.

Source: Valor Econômico

http://www.valor.com.br/international

 

Two startups vie to reproduce Tinder model in real estate

New players are entering the real estate market seeking to understand buyers’ demands and match them with suitable properties instead of serving sellers. Keyfast starts operations this month while Kzas launches its service in September. Both will filter available residential units and support the customer during the entire acquisition process, including documentation, and only get paid if the deal is closed. “We want to be the Tinder of the real estate market, matching the right buyer with the right property,” said Eduardo Tinari, the Keyfast partner in charge of operations. “The whole industry works for the seller. I want to work for the buyer, inverting this rationale,” added Eduardo Muszkat, chief financial officer and partner of Kzas.

Source: Valor Econômico

http://www.valor.com.br/international

 

C6 Bank expects to turn a profit within a year

C6 Bank, founded by former BTG Pactual executives, expects to turn an operational profit within one year, Valor has learned. Its primary challenges are to make money from the portfolio of individual accounts and boost the business loan segment. The bank’s net equity stands at R$315 million and management expects to invest R$500 million. C6 has attracted 200,000 new customers since January by offering money transfers, withdrawals and account maintenance free of charge.

Source: Valor Econômico

http://www.valor.com.br/international

Andbank targets R$12bn in assets with bet on wealthy clients

Andorra’s Andbank, focused on private banking, has signed an exclusive deal with Capital Investimentos, an independent firm that has been distributing funds for over 20 years and has about R$3 billion under management. With the deal, Andbank now has R$8 billion under custody and gives another step to reach about R$12 billion by 2020. The shortcut to boost operation in Brazil includes strategic partnerships with more consolidated wealth managers and independent financial advisors. Andbank intends to focus on structures that meet private-banking profiles and wealthy clients with assets starting at R$1 million.

Source: Valor Econômico

http://www.valor.com.br/international

 

Government to start road shows offering projects in five segments

The Ministry of Regional Development is preparing road shows across the US (September), Europe (October) and Asia (November) to offer projects in five different segments in Brazil: street lighting, sanitation, urban mobility, water security and irrigated agriculture. This is the first time the government, usually focused on energy and transportation, offers projects in those areas abroad. The ministry has just finished its first-half figures: it invested R$4.62 billion through June 30 (actual disbursements that include deferrals from previous years) and led the amount spent in the period followed by infrastructure. The largest disbursements were in low-income housing (R$2.5 billion), water security (R$652 million) and regional and urban development actions (R$588 million)

Source: Valor Econômico

http://www.valor.com.br/international

 

Vale expects to settle Brumadinho cases by year-end

Vale expects to reach a final settlement by the end of the year for all claims from the collapsed dam in Brumadinho, Minas Gerais. The disaster at its Córrego do Feijão mine six months ago killed 248 people, while 22 remain unaccounted for. The company also indicated it is comfortable with provisions made so far to cover potential liabilities – the amount currently stands at R$23.2 billion. CFO and investor relations director Luciano Siani also hinted at cost reductions and higher output in upcoming quarters.

Source: Valor Econômico

http://www.valor.com.br/international

Paraguay and Brazil reopen negotiations about Itaipu electricity

Brazilian and Paraguayan officials signed a document yesterday in Asunción reopening technical negotiations involving power generated by Itaipu Binacional. With that move, the previous document signed in May, which triggered a political crisis in Paraguay, became ineffective. Local legislators had threatened to start impeachment proceedings against President Mario Abdo Benítez after his administration accepted a $250 million difference between the country’s declared and actual electricity consumption. This amount would be reversed to Brazilian consumers between 2019 and 2022. General Joaquim Silva e Luna, who heads the Brazilian side of Itaipu, told Valor that, on a political level, the crisis was overcome. “There was common sense from both parties and the discussion will go back to the technical area,” he said.

Source: Valor Econômico

http://www.valor.com.br/international

 

Mall sales have best first half since 2014

The Brazilian Association of Shopping Malls (Abrasce) will report today the best first-half sales since 2014, when the recession started hitting consumer spending harder. Data obtained exclusively by Valor show sales rising 8.4% in January-to-June from the same period of 2018. Nominal retail sales rose 5% in the year to May, according to official data. In real terms (excluding official inflation measure IPCA), mall sales may have risen as much as 6.04% in the first half. Abrasce is maintaining a forecast of 7% expansion this year despite the first-half spike. “It’s still an expansion over a weak comparison base,” Abrasce president Glauco Humai reckoned, warning there are no clear signs the trend will continue through the rest of 2019.

Source: Valor Econômico

http://www.valor.com.br/international

 

Brazil and US formalize negotiations for free-trade deal

Brazil and the US formalized their negotiations for a free trade deal. “What was just a thought now is this: we are officially starting negotiations with the US,” said Economy Minister Paulo Guedes after a meeting yesterday with Secretary of Commerce Wilbur Ross, who had previously met with President Jair Bolsonaro. According to Mr. Bolsonaro, Mr. Ross warned him about “traps” in the Mercosur-European Union agreement that could prevent an understanding between Brazil and the US. Brazilian officials say they want to keep negotiations with the US going even after specific issues, like ethanol and wheat trade, are solved. On the other hand, the agreement with the Europeans is seen as a key element to keep the pressure on the US. Valor has learned that all negotiations may bump into political uncertainties, with elections in Argentina this year and in the US in 2020.

Source: Valor Econômico

http://www.valor.com.br/international