The main markets of Latin America have experienced another day with red numbers. The bad news coming from Europe, in this case due to the decision of the Saudi bank SNB to suspend its capital contributions to the battered Credit Suisse, impacted the stock markets of the region, as well as the value of the regional companies that operate in Wall Street and debt securities. The blow affects above all the banks, in the center of the storm.
In Mexico, national banks were the most affected. Shares of the financial services provider to companies, Value Grupo Financiero, have fallen 20% since Thursday, when rumors began about the fragility of Silicon Valley Bank (SVB). Banorte, Inbursa and BanBajío have fallen 11.5%, 7.6% and 11.5%, respectively, in the last five days.
In an attempt to calm the markets, the country’s banking regulator, the Comisión Nacional Bancaria y de Valores, issued a brief statement in which it assured that “banks that operate in Mexico have solid levels of capitalization, liquidity and quality in its credit portfolio. No “systemically important” bank, the entity advanced, has its depositors concentrated in any specific sector.
Both the most important stock indices and the peso-dollar exchange rate had smaller fluctuations on Wednesday. The price of the peso against the dollar fell 2%, so its fall amounts to almost 3% in the last five days. The indices of the Mexican Stock Exchange were painted red, although with moderate falls of between 1% and 2%.
The 24.24% fall in the value of the shares of the Swiss bank Credit Suisse has had a strong impact on the Colombian stock market, already affected by the fall on Monday. The main national index, the MSCI Colcap, has fallen 3.84%. The share of Ecopetrol, the oil company with a state majority that is the main company in the country, fell 3.42% and closed at 2,397 pesos.
The listed financial entities were hit hardest, due to the risk of contagion. For example, the ordinary share of Grupo Aval, the holding company controlled by Luis Carlos Sarmiento Angulo and which owns the banks of Bogotá, Occidente, Popular and AV Villas, has contracted 5.56%. That of Davivienda, the main bank of Grupo Bolívar, fell 0.27%; that of Bancolombia, the largest bank in the country, fell 7.74%.
Nervousness also boosted the price of the dollar, although to a lesser extent: it rose from 4,745 pesos to 4,870 pesos, an increase of 2.71%.
The main index of the São Paulo Stock Exchange, the Ibovespa, has closed with a very slight fall of 0.25%, but at some point it has reached the lowest level since July due to the impact of the collapse of Credit Suisse shares and the hangover from the bankruptcy of two banks in the United States. And the dollar rose 1% to 5.30 reais. The news coming from Switzerland and the United States open all the newspapers while analysts try to assess the possible impact on the Brazilian market. For now, they estimate that the Central Bank will not change, at least in the short term, its strategy regarding interest rates, which have been at 13.75% for months, despite the protests of the new government, which wants cheap money to stimulate the economy.
This global financial storm occurs while the government of Luiz Inácio Lula da Silva is still designing its main economic measures: a new rule for the control of public spending, the draft of which was received by the president on Wednesday, and a tax reform for the last quarter of anus.
Argentina looks in amazement at the bad news coming from abroad. Plunged into a deep crisis, its economy barely has the tools to resist a worsening of the external situation. This Wednesday, the shares of the South American country fell up to 13% on Wall Street, evidence of the distrust that the health of its economy generates in international investors. Banks suffered in particular, with falls of between 7% and 9.5%. Global bonds, meanwhile, fell to 3.5%, with a rise of almost 5% in country risk, to 2,387 points, which is the differential that Argentina pays for its financing over the United States.
The Merval index of the Buenos Aires Stock Exchange fell again for the fifth consecutive day, with a negative index of 4.82% compared to the previous day. The Argentine peso has fared no better, languishing after the 102.5% CPI reported on Tuesday by INDEC, the public statistics office. The official dollar, regulated by the Central Bank, rose 0.12% against the peso, but the MEP dollar, the only one to which companies have access, closed 1.5% above the day before.
The Chilean peso was the second most depreciated currency in the world this Wednesday (2.77%) against the dollar, according to Bloomberg monitoring. The greenback registered its biggest daily advance in four months: 22.48 Chilean pesos, reaching 824.55 at the end of the day, its maximum in the last two weeks.
The IPSA, the main stock market index in Chile, prepared by the Santiago Stock Exchange, chained its fifth day of losses and registered a decline of 1.90%, to 5,197 points, its lowest level since last January 17 .
Gabriel Boric’s Finance Minister, Mario Marcel, reiterated this Wednesday the message of calm about the possible local impact of the collapse of the SVB. However, at the inauguration of the academic year of the Diego Portales University, he explained that in Chile there is a specific framework for treatment in the case of banks, which is different from other companies. “Banks have a systematic effect that is bigger than a shoe company factory,” he said. Marcel remarked that the Administration intends to present a bill on bank resolution this year.
With information from Naiara Galarraga Gortazar, Isabella Cota, Juan Esteban Lewin, Antonia Laborde and Federico Rivas Molina.
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