Brazil & ADRs (American Depository Receipts)

 

Was talking with someone a little earlier on Skype chat on Latin America & where these markets are headed when the Dow & NASDAQ & other western bourses are getting slammed.

Interestingly enough, although most indexes on LatAm are way down on a YTD basis, they are all showing signs of moving off their lows at present.

Brazil in particular seems to be attracting inward cash flow, which you can see here on Bank of New York Mellon’s ADR site

The chart below gives you an idea of where Brazil is going when compared to BoNY’s 100 Developing Markets Index, just starting to peak upward. Definitely worth keeping an eye on. With todays momentum, it looks as though its going to break a 10% gain.

Another increasing development is the ensuing wave of consolidation going on within Brazil’s banking industry, as outlined in the New York Times blog.

Banking mergers may be cooling down in the United States, but in Brazil they are just heating up.

The state-controlled Banco do Brasil announced Thursday that it was buying a 72 percent stake in Banco Nossa Caixa for 5.4 billion reals, or about $2.25 billion.

The all-cash deal comes just three weeks after a deal valued at 38.1 billion reals, or about $17.7 billion, was announced between the Brazilian banking giants Banco Itaú and Unibanco. That merger would create the largest bank in the southern hemisphere, with 21.5 percent of the nation’s deposits under its roof.

By acquiring Banco Nossa Caixa, Banco do Brasil would become only the nation’s second-largest bank, much to the chagrin of the Brazilian government.

“We want Banco do Brasil to be far bigger than any other bank in the country,” President Luiz Inácio Lula da Silva of Brazil told reporters on Tuesday.

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One response to this post.

  1. […] discussed in an earlier post, Brazil is going through a wave of banking acquisitions & consolidation, Santander cannily bought up ABN Amro’s Banco Real operation last year, […]

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