U.S. Markets Recover; Nutresa Shares Collapse Colombia’s COLCAP

Oil price fall on the news that Washington plans to ease sanctions against Venezuela

An employee packages Grupo Nutresa SA Nacional de Chocolate Tikys brand Golochips at the company's factory in Medellin, Colombia. Photographer: Nicolo Filippo Rosso/Bloomberg
May 17, 2022 | 06:10 PM

A roundup of Tuesday’s stock market results from across the region

🗽 On Wall Street:

U.S. stocks rebounded on Tuesday amid news from China, with the decline in Covid-19 cases, and following a retail sales report that reflected that consumer purchases remain strong, despite high inflation.

The S&P 500 advanced 2.02%, while the Dow Jones Industrials gained 1.34% and the Nasdaq Composite (CCMPDL) hiked 2.76%.

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Investors also weighed statements from Federal Reserve Chairman Jerome Powell, who insisted that the U.S. central bank will not hesitate to raise interest rates above their neutral level in its fight against the rising cost of living.

No one should doubt the central bank’s determination to curb the highest inflation in decades, Powell said.

Despite the gains in the indices, Walmart (WMT) was the negative point of the day, as its shares posted their worst day-to-day drop since 1987 after the retail giant cut its earnings forecast.

🔑 The Day’s Key Events:

Oil prices fell after the United States government said it intends to ease economic sanctions against Venezuela, in an attempt to revive negotiations between the government of Nicolás Maduro and the Venezuelan opposition.

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The Treasury Department will allow U.S. oil company Chevron (CVX) to negotiate its license with Venezuela’s state oil company PDVSA, although it will not allow more drilling or an increase in income for Maduro’s government, according to a U.S. government official quoted by Bloomberg News.

The WTI fell below $113 after the news broke that could have an impact on global supply, amid a tight market due to the war in Ukraine.

The fall in oil prices was also influenced by the news that the U.S. is considering shifting its strategy on Russian crude oil from an embargo to imposing tariffs.

🥇 The Leader:

Latin American stock markets continued with the optimism with which they started the week and the region’s main markets closed in the green, on a positive day for U.S. stocks.

Increases in the region were led by the Chilean Ipsa (IPSA), which closed with a rise of more than 3% thanks to the performance of the materials, industrial and energy sectors.

The upward trend was also accompanied by the S&P BMV/IPC (MEXBOL), which rose by almost 1.8% and extended Monday’s advance when it was the best performing stock exchange in Latin America.

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The same happened with Brazil’s Ibovespa (IBOV), boosted by investors taking advantage of low prices, after days of liquidation, together with more favorable news from China, in its progress in the fight against Covid-19.

📉 A Bad Day:

The Colombian stock market was the only one to register losses in Latin America, dragged down by the performance of Grupo Nutresa shares, after it was announced that the Gilinski Group would desist from making purchases after the third takeover bid it launched for the food company’s shares.

The company’s shares fell more than 10% during the day, by far the worst performer in the session. The behavior occurred after the takeover bid ended yesterday with only 469 shareholders willing to sell 3.26 million shares, which represented only 5.95% of what the Gilinski Group was seeking.

Sources consulted by Bloomberg Línea assured that, at least in the immediate future, a fourth PTB for Nutresa shares will not be launched.

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At least until there is less political uncertainty due to the presidential elections, which take place on May 29, the Gilinskis’ strategy will be to concentrate on what the current administrators have promised to the minority shareholders: a strategic partner.

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🍝 For the Dinner Table Debate:

The best chef in the world is in Latin America. Colombian chef Leonor Espinosa, who exalts the gastronomic traditions of her country, was chosen as the best chef in the world by the British list The World’s 50 Best, compiled by William Reed Business Media.

The organization highlighted not only the Colombian chef’s contribution to gastronomy through her restaurant Leo, but also her facets as an artist and social entrepreneur.

Espinosa’s proposal is defined by the restaurant itself as “a gastronomic journey through the ethnobotany of the cultures that inhabit the diverse Colombian biomes”.

“Leonor Espinosa has a mission that goes far beyond applying haute cuisine techniques to Colombian ingredients. The chef’s ‘cyclo-biome’ philosophy uses gastronomy as an impetus for the social and economic development of indigenous and Afro-Colombian communities, and her mission is now being more widely recognized,” according to The World’s 50 Best.