The director of the Brazilian investment bank said that for investors a Chamber of Deputies with a greater presence of the opposition will be more attractive.
Javier Artigas Alarcón, CEO of the investment bank BTG Pactual México, assures that a victory by a majority of Morena in 2021 would cause nervousness in the investment decisions of Mexican and foreign businessmen.
“The result of the June 2021 elections will influence the investment decisions of many projects, which are about to be built towards the first half of the coming year and will wait to see the results to be specified and carried out,” he says. The banker.
“The nervousness is due to changes in the rules from a majority of Morena is something that is considered to carry out the projects, ” says the former director of Strategic Planning at the Mexican Stock Exchange (BMV).
Companies are demanding money to invest in digital platforms and real estate in the midst of the coronavirus (Covid-19) health crisis, says the representative of the Brazilian bank chosen by LatinFinance as Bank of the Year in Latin America at the Bank of The Year 2020 awards.
Low-interest rates have caused demand for paper, which has generated 30 capital market transactions in Latin America, mainly in Brazil, as well as 26 mergers and acquisitions, the manager mentioned in an interview with Forbes Mexico.
The interest rate is 2% in Brazil, and in the last 16 months it comes from levels of 11 and 12%, in Chile it is at 0.5%, in Colombia, it is at 1.75% and in Mexico, it remains 4.25%. Additionally, inflation in Chile and Brazil remains at levels of 3% and in Colombia, it is at 2%.
The good moment for Brazil is seen in the 27 capital issues made by local market entrepreneurs, who have confidence in investing and betting on the country governed by Jair Bolsonaro, says Artigas Alarcón.
The CEO of BTG Pactual México recalls that in our country there is a government that is not spending and is not investing in profitable infrastructure projects.
“In Mexico, I see solid macroeconomic conditions to access capital,” says the former CEO of UBS Casa de Bolsa.
Mexico issued 10 and 40-year bonds for almost $ 6 billion at very competitive rates, which means that there is confidence in the macroeconomy, low-interest rates since the rating agencies have not cut the sovereign, affirms the lawyer. in Business Administration from the Instituto Tecnológico Autónomo de México (ITAM).
“The conditions to get capital are there, but where I see the problem is in investment,” he adds.
The Chamber of Deputies approved a “very low” investment budget for 2021 and the private sector, not feeling that there are clear rules, has limited its investments, he adds.
“Mexican companies are doing well because they are diversified out of Mexico and are balancing their risks very well, we can see it in the third-quarter report,” says the banker.
“If you see Mexico’s fiscal deficit, it is reasonable, that is, we are going to have a primary surplus this year and a small programmable one for next year,” he adds.
Macroeconomic solidity is what is allowing us to access international markets and to have some investment, he said.
“The problem will come later if it is not invested because the companies do not generate income and the government will not have tax resources. So that deficit is going to grow in the short and medium-term ”, declares the CEO of BTG Pactual México.
– Will the elections of 2021 affect the delivery of credits for this and the next year?
-I think so. Definitely, the result of the elections in June 2021 will influence the investment decisions of many projects that are about to start towards the first half of the coming year, but they will wait to see the results to be finalized and carried out. The nervousness, which is due to changes in the rules from a majority of Morena, is something that is considered to carry out the project.
—The changes of rules of the labor sector will be a determinant of how they will invest?
—We are talking about the energy sector in which there has been a lot of controversy and the rules have changed and are still being adjusted. So it is a sector in which you need to have more clarity.
– Is the market looking for a balance in the Chamber of Deputies and a victory for the opposition?
– Exactly. Or that Morena does not have more than 75% to make constitutional changes. Now, if it is balanced (the Chamber of Deputies) with the other parties and does not have a simple majority, it also helps and balances power.
– Would this nervousness be reflected in a lower investment intention?
—The agenda (of Morena) should be seen and it depends on the results. What is the agenda? If it is pro-business or pro-investment or if it is restrictive, but we have to wait to know the agenda.