Research & Strategy

Our Research & Strategy department focuses on innovative, market oriented views and analysis for institutional clients in the fixed income market.

We emphasize our local presence in the region to provide value added in markets like Venezuela and Argentina, where information is not ready accessible. Our main goal is to give investors decision-making tools based on fundamental and quantitative research.

Venezuela Weekly Report

The Plenipotentiary ANC

August 25, 2017BancTrust & Co. Research Team

• The National Constituent Assembly (ANC in Spanish) will assume the “legislative power to preserve the peace and institutionality”, although its president Delcy Rodriguez affirmed that the National Assembly “has not been dissolved” and must coexist with the ANC
• Crystallex filed a Writ of Attachment to request the seizing of the shares of PDV Holding, US subsidiary of PDVSA and owner of CITGO
• International reserves hit new minimums this week, while as of 17 August these register a 17.72% y-o-y fall

The National Constituent Assembly (ANC in Spanish) approved a decree that empowers the ANC to legislate in those matters concerning “the guarantee of peace and institutionality”, as well as those involving the stability of the “socioeconomic and financial system”. Without further disclosure of the extent of the decree, the president of the ANC and former Chancellor Delcy Rodriguez affirmed that this decree “does not dissolve” the National Assembly (AN in Spanish) – dominated by the opposition –, but rather instructs them to subordinate to the ANC while also makes a call for the coexistence of both ANC and AN.

Argentina Weekly Report

Inflation is Finally Giving Up

September 22, 2017BancTrust & Co. Research Team
  • The national CPI result for August 2017 stood at 1.4% m-o-m, confirming a deceleration trend for the end of the year. By then, it is expected to reach a monthly inflation of 1% in order to achieve 2018 inflationary goal
  • On the Fixed Income arena, the government of Jujuy issued a “green bond” for USD210mn with a 5-year maturity and a coupon rate of 8.625%
  • Likewise, Finance Ministry Luis Caputo announced that, given the current scenario, they do not discard a new bond issuance before the mid-term elections. This issuance could be denominated in EUR, CHF, JPY or a mix of currencies

This week, the long-awaited news arrived to confirm that the government’s policies have resulted in routing inflation to the desired target and that the FX movements did not cause the so fear “pass-through” effect. However, this is still not enough reason for the Central Bank of Argentina to ease its actions with the key monetary policy rate.

Dominican Republic Bi-Weekly Report

Slowing Down but Still Remarkable

August 25, 2017BancTrust & Co. Research Team

• The economic activity expanded 4.0% y-o-y in 1H17 due to a lower than expected GDP result in the second quarter of the year
• The government has executed 46.7% of the 2017 Budget plan while incomes rose 1% above estimations on account of a higher tax collection
• We expect the loosened monetary policy to add dynamism to economy in the short-term, though fulfilling the inflation target could be uphill

Economic performance continues to show signs of decelerating in the second quarter of 2017, as the Central Bank of the Dominican Republic (BCRD in Spanish) reported that the Monthly Indicator of Economic Activity (IMAE in Spanish) recorded an increase of 2.7% in April-June of this year. This result put the accumulated figure at 4% y-o-y in 1H17, significantly lower than the 7.4% y-o-y growth reached in June 2016. The economic activities with the greatest impact in the period January-June 2017 were: Hotels, Bars and Restaurants, Agriculture, Transportation and Storage, Financial Intermediation, Insurance and Related Activities and Commerce.

Andean, Central America, & Caribbean Weekly Report

Peru: Great News Came, But Could be Better

September 22, 2017BancTrust & Co. Research Team
  • Moody’s affirmed Peru’s “A3” rating and a “stable” outlook, but we believe that the economic prospects could continue improving and thus signal towards better ratings in the short and mid-term
  • GDP grew 3.64% y-o-y in June while the YTD figure rose 2.3% y-o-y. In our view, considering the reconstruction works after El Niño and those for the Panamerican Games of 2019, economic activity could pick up even further to grow 3% by year-end
  • Y-o-y inflation stood at 3.37%, above the 1%-3% official goal. Nonetheless, we recommend being watchful of possible stimulus measures that could further prop up inflation

Credit rating agency Moody’s decided to affirm Peru’s credit rating at “A3” as well as the “stable” outlook, taking into account that the economy has been able to recover importantly after suffering the impact of negative shocks as the spillover of the Odebrecht scandal and even the worse-than-expected climatic phenomenon of “Coastal El Niño”. An additional positive factor considered by Moody’s refers to the enhancement of the fiscal accounts, which now count with a renewed credibility that does nothing but add to the outlook of a resilient macroeconomic stability.

Ecuador Bi-Weekly Report

On the Brink of Recovery?

September 1, 2017BancTrust & Co. Research Team
  • The economy expanded 0.19% y-o-y in June while total tax collection spiked 13% y-o-y in July, thus making a serious case for economic recovery
  • The Attorney General moves forward to prosecute VP Glas on alleged corruption cases, setting up a new battle within the ruling party “Alianza Pais”
  • The Esmeraldas Refinery is shut down for 45 days while Oil Minister reaffirmed Ecuador’s commitment with OPEC at leaving oil output at 541k bbl/d

The Monthly Economic Activity Index (IDEAC in Spanish) expanded 0.19% y-o-y in June while on the trend-cycle data series -which adjusts for seasonality and historical irregularities- the indicator registered a 6.12% y-o-y increase, per a report released earlier this week by the Central Bank of Ecuador (BCE in Spanish). In YTD terms, the Ecuadorian economy accumulates a 2.9% increase. These new figures have come to reinforce our view that the Andean nation is on track to recovery yet to a weak one; reason why we believe that upcoming economic measures by the Moreno’s administration will be paramount to strengthen -or weaken- such recovery.

Corporate Weeky Report

Corporate Report: Pampa Energia

October 7, 2016BancTrust & Co. Research Team
  • Last July, Pampa Energia finished the acquisition process for Petrobras Argentina S.A, turning it into the largest private energy company in Argentina
  • Currently away from top positions, Pampa is likely to improve in its market share position for both oil and gas by next year, once the merge with Petrobras is totally complete
  • An upcoming issuance, which is set to repay a bridge loan which permitted the acquisition of Petrobras, is expected to be of USD600mn, which would be the largest issuance of the company

Company Background

Pampa Energia S.A. is one of the principal energy companies in Argentina and through its subsidiaries manages to participate in all stages of the electricity activity, from exploration and production to distribution. Its activities are separated over three different segments: generation, transmission and distribution. Moreover, the company has participation in production and distribution of general gas. Just to set an example, through Edenor in the distribution segment, Pampa has an important participation in the Argentine market with an estimate 21% of participation in the whole supply of electricity.

  • Monday, September 25 2017

    - Last Friday, the government of Canada announced economic sanctions on key Venezuela’s officials which affects 40 individuals who have played a key role in Maduro´s regime. In detail, these sanctions prohibit any person in Canada or any Canadian outside the country to have any type of economic relation with these members of the Venezuelan government. We see that the consequences of this sanctions are very similar to those applied by the United States government, affecting only individuals, reason why we do not expect the conse

  • Thursday, September 21 2017


    - Yesterday rumors started of the country being late on the payment of an USD185mn coupon of the VENZ27, which had to be canceled on September 15. Nevertheless, near the end of the day the national public credit office said that it sent the money on time to the corresponding financial institutions and the delay is due to "operational changes" in order to make future financial transactions effective. Furthermore, the credit institution reiterated Venezuela’s commitment in paying its debt and ca

  • Tuesday, September 19 2017

    - According to some new information, it seems that PetroChina Americas is revising its oil for cash agreements with PDVSA after the US sanctions were imposed, which would made them unable to act as an agent to commercialize Venezuelan crude. In detail, there is no change –as the sanctions detailed- in the ongoing contracts; the effect comes for the intention to renew or to extent the terms of the existence contracts. Read More >>

  • Friday, August 25 2017

    -Yesterday, it was known that some representatives of the Venezuelan government has been trying to reach a general agreement in China that comprises the creation of a sub-fund for the repurchase of Venezuelan debt –sovereign and PDVSA’s- which will allow the government to take advantage of the savings made when buying at discount the bonds with maturities in 2017 and 2018, savings are calculated around USD700mn. The final strategy will be to swap at maturity the bonds that are repurchase for new PDVSA’s debt with maturities


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Our Research and Analysis Reports are not directed at or intended for use by any person resident or located in any jurisdiction where (1) the distribution of such information or functionality is contrary to the laws of such jurisdiction or (2) such distribution is prohibited without obtaining the necessary licenses or authorizations by the relevant branch, subsidiary or affiliate office of BancTrust & Co. and such licenses or authorizations have not been obtained.