Brazil’s XP to Acquire Banco Modal; Mexico Inflation Highest in 21 Years

Bloomberg Línea — A roundup of Friday’s news from our reporters across Latin America.

Argentina

Monetary emissions totaled 2.21 trillion pesos ($20.5 billion) in 2021. On the last working day of 2021, Argentina’s Central Bank made a new transfer to the Treasury, with remittances for the whole year totaling between 4.6% and 4.8% of GDP. Despite such assistance decreasing in the first months of 2021, it took on an upward trend in the second half of the year. The first-quarter issuance was 135 billion pesos ($1.3 billion); in the second, $195 billion ($1.88 billion); in the third, $630 billion ($6 billion); and in the fourth, $1.16 trillion pesos ($11.3 billion), analyst Salvador Di Stefano told Bloomberg Línea.

President Alberto Fernández assumed Friday the pro tempore presidency of the Economic Commission for Latin America and the Caribbean (ECLAC), a pan-regional body founded in 2010 that, without the participation of the United States and Canada, is seen as a counterweight to the Organization of American States. Argentina replaces Mexico as holder of the pro tempore presidency of the commission.

Brazil

XP Financial Group has announced its intention to acquire Banco Modal, a move that was positively received by the financial markets and is pending on Modal’s minority holders to go ahead with the deal. Modal shares rose more than 50% on the B3 trading floor, as the transaction contemplates a premium of around 50% over Thursday’s closing price. XP (XP) announced Friday that the company had entered into a binding agreement to merge with Banco Modal (MODL3), a deal to be paid in 19.5 million newly issued XP shares, representing about 3 billion reais ($532.3 million) of equity, implying a 53% premium over Thursday’s Modal share price.

Following the announcement this week that Uber Eats will cease its restaurant deliveries in Brazil from March, its main rivals in the country, iFood and Rappi, reacted to the news and gave their take on the state of play in the app-driven delivery market in Brazil.

Chile

Chile closed 2021 with 7.2% inflation, the highest since 2007. The Consumer Price Index registered an increase of 0.8% in December with respect to the previous month, according to data from the national statistics bureau.

President Sebastián Piñera has announced that the fourth dose of Covid-19 vaccines will be rolled out in the country from January 10, while the Health Ministry reported 3,134 infections from the virus overnight Thursday, the highest figure in six months.

Colombia

The number of required quarantine days for Covid-19 sufferers has been reduced to seven. Health Minister Fernando Ruiz confirmed Friday that the number of days of isolation for a symptomatic person who has tested positive will be seven rather than 10 or 14 days, regardless of their vaccination status.

Colombian retailers have requested authorization from the Ministry of Health to sell Covid-19 home-testing kits. The proposal comes amid a new peak of contagion triggered by the presence of the Omicron variant. “The use and free trade of these products would allow to voluntarily and quickly find or rule out cases of Covid-19, and would contribute significantly to the family economy,” retail trade union leader Jaime Alberto Cabal said in the letter to the ministry, bemoaning the high cost of the tests currently available.

Ecuador

Ecuador has resumed oil exports. State oil company Petroecuador said in a statement that shipping resumed after the completion of construction works on the Trans-Ecuadorian Oil Pipeline System (SOTE) and on the Shushufindi-Quito Polyduct, in the province of Napo in the country’s northeast. The country produces around 490,000 barrels per day.

Naturíssimo, Ecuador’s best known brand of yogurt and cassava bread, will open a store in Miami, its first outlet abroad. The opening is scheduled for the end of January, and has implied an investment of $1.5 million.

Mexico

Inflation in Mexico closed 2021 at 7.36%, its highest level since January 2001. National statistics bureau INEGI reported Friday that in December the consumer price index increased by 0.36% with respect to the preceding month.

Mexico has approved the imposition of visa requirements for Venezuelan citizens entering the country as of January 21. The undocumented immigration of Venezuelans into the U.S. across its border with Mexico increased by more than 1,000% between January and September 2021, compared to the same period in the previous five years, according to Mexico’s Interior Ministry.

Seven companies out of 140 listed on the Mexican Stock Exchange show returns of more than 100% at the close of 2021; however, they are companies considered to have low marketability. Grupo Lamosa (LAMOSA), a construction materials company, had the best returns, with its shares rising by 202.22% during the year.

Carmakers in Mexico manufactured 212,272 units in December, a 16.5% drop on the same month of 2020.

Panama

More than 20 local companies obtained the approval of the Ministry of Commerce and Industries to carry the “Made in Panama” logo, as a measure to promote the consumption of products made or manufactured in the Central American country. Food and beverage companies dominate the list.

Peru

The Banker magazine, part of the Financial Times publishing group, has once again recognized Peru’s Central Bank president Julio Velarde as the Central Banker of the Americas for 2022. This is the third time the magazine has honored Velarde, having awarded him the same honor in 2020 and naming him Central Banker of the Year worldwide in 2015.

This is how the region’s markets and currencies closed on Friday, January 7:

--Corrections: the headline of this story and the 4th paragraph were edited to show XP’s intention to acquire Banco Modal and the pending green light by minority investors.