Uncertainty in Brazil as web of corruption probe expands; tax bill, Christmas in focus

By Rebecca Melvin

New York, Dec. 20 – There were plenty of news headlines originating out of Latin America on Wednesday but not enough to turn investors’ heads as the long Christmas holiday weekend came into view.

“Things were just very slow ahead of Christmas day, and all the brokers left early,” a New York-based trader said.

Emotions were running high in Brazil, however, after Marcelo Odebrecht, the former head of Latin America’s biggest construction company, was released from jail on Tuesday after serving only 2.5 years of a 19-year sentence resulting from the so-called Car Wash probe of 2015.

The far reaching scandal has hit governments and businesses across the whole region, with the latest casualty being Peruvian President Pedro Pablo Kuczynski, who is facing an impeachment vote on Thursday after documents came to light last week that he was allegedly involved in a kickback scheme with Odebrecht more than 10 years ago when he was a government official.

The news was not spurring trading of Brazilian debt. If anything, “everyone is focus on the U.S. tax reform,” a trader said.

Elsewhere, Russia’s Lukoil has sufficient liquidity to repay its upcoming maturity on its $1.5 billion bonds due April 24, 2018 but is also expected to come with a new deal in the first quarter, a London-based market source said on Wednesday.

© 2015 Prospect News.
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