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  • Canacol Energy Is Fairly Valued But Major Partners Could Create Upside In 2014 [View article]
    Value Digger,

    Great response and I couldn't agree more.

    Kind regards,

    Matt
    Feb 6, 2014. 12:37 PM | 2 Likes Like |Link to Comment
  • Canacol Energy Is Fairly Valued But Major Partners Could Create Upside In 2014 [View article]
    Hi Value Digger
    Another great article, but I agree with Malcolm's comments above. I also feel that you have to a degree down played the potential the company holds given that it has taken the lead in shale oil and gas exploration in Colombia and has such a strong position in the Magdalena Valley which will see explosive growth of the medium to long-term.
    Another attractive aspect of the company is that it is decreasing tariff production and boosting oil production, which will drive higher cash flows and ultimately profitability as operational netbacks per barrel grow.
    I certainly agree that a 100% profit and the redeployment of those funds to other under-values plays is a superb way to manage a portfolio. But for the reasons I have mentioned along with the points raised by Malcolm I believe that there is more upside to come for investors in Canacol.

    Looking forward to your next article,

    Matt
    Feb 5, 2014. 12:48 PM | 2 Likes Like |Link to Comment
  • Canacol Energy Is Considerably Undervalued And Offering Significant Potential Upside [View article]
    The reason the attacks on energy infrastructure stepped up in 2010 to 2012 was to bring the government to the negotiating table, since then they have diminished. Attack the largest legitimate export industry in Colombia and cause it significant damage then you are sure to get what you want.

    Since the peace talks began the action they are taking has become more low level and been redirected against softer targets such as the police and civilians (typical Marxist guerrillas).

    The reality about social, economic and land-reform in Colombia is that it will never happen, so as long as it remains as a vassal state of the U.S. the situation will remain in hand with the large amount of aid and advisers being provided as required. Overall it is a heavily fragmented country with significant internal divisions and one that the government in Bogota lacks the ability to control fully without U.S. support.
    Jan 29, 2014. 02:08 AM | 1 Like Like |Link to Comment
  • Canacol Energy Is Considerably Undervalued And Offering Significant Potential Upside [View article]
    Shale oil and gas development in Colombia is going to be very difficult, the lack of infrastructure and expertise means it is really only a play for the big majors who are willing to devote time and resources to developing it. But like heavy oil here, which typically comes from higher risk regions and is more difficult to develop and receives a lower benchmark price than light oil the government has given tax incentives and discounts royalties.

    As for the FARC and security situation it is quite complicated, but I never shy away from traveling to where I need to, regardless of the security situation but I always take the right precautions. I am well known a among the expat community for traveling to places where most Colombians won't go.

    As for the FARC it is a complicated situation, there are the peace talks which have made significant gains, but I don't believe they will end in peace. Plus despite being involved in peace talks they have continued to make their presence felt where they can, there was a recent bombing in Valle de Cauca, which is the department where Cali is the capital, that has been attributed to the FARC.

    But they have certainly lowered their profile and desisted from attacking energy infrastructure. The problem with regard to security is the influence of the ELN and the paramilitaries (Bacrims). Overall I believe based on the geological data available that Colombia holds considerable potential for developing unconventional oil and gas but it will be a long road to get it to the point where it is commercially viable.
    Jan 29, 2014. 01:02 AM | 1 Like Like |Link to Comment
  • Canacol Energy Is Considerably Undervalued And Offering Significant Potential Upside [View article]
    Canacol has the most potential at this based on the market no recognizing that potential and because the company still has plenty of catalysts emerging which will drive its share price higher.

    Colombia is shaping up as Latam's next hotpot for shale oil exploration and production and with Canacol having taken the lead in that area it will add value to the company. Thought as I said earlier it will be a long and bumpy road because shale oil and gas in Colombia is still in its infancy. I was recently in Puerto Boyaca taking a closer look at those opportunities and the Chinese are moving in, in force into the area.
    Jan 28, 2014. 10:06 PM | Likes Like |Link to Comment
  • Canacol Energy Is Considerably Undervalued And Offering Significant Potential Upside [View article]
    Time On Target thank you for the compliment. I believe there is still considerable upside to go for Canacol but the gains won't be as quickly realized and it will be a rocky road ahead with the current headwinds in South America.

    Parex is by far one of my favorite energy companies operating in Colombia. I don't believe that it will jump as significantly as Canacol but there is still solid potential upside and I like the fact that its oil price is indexed to Brent rather than WTI.

    At this stage it would appear that any takeover offer as a potential catalyst is off the table with the key suitor Pacific Rubiales occupied with digesting Petrominerales and moving to replace the reserves and production that will be lost when its lease on the Rubiales field expires in 2016.

    I am currently in the process of writing a series of follow-up articles on the all of the key E&P operators in Colombia and will complete them for publication as 4Q13 and FY13 results become available. Will keep you posted.
    Jan 26, 2014. 12:39 PM | Likes Like |Link to Comment
  • Avoid Argentina Stocks This Year [View article]
    I agree with many of the previous comments. It is obvious that Argentina is a high risk country in which to invest but the risk/reward trade off for risk tolerant investors is compelling. I heard the same stories in 2012 when YPF as nationalized and that stock plummeted to under $12 per share then in less than a year it was back to $32 per share.

    The low P/E comment is intriguing because as a basic measure of value it is clear there is a lot of value to be found in Argentina and my preferred sector for investing is the energy sector primarily because the government is desperate to boost reserves and production so as to reduce energy imports and reduce the decline in foreign currency reserves. This has seen a number of policies put in place to create a favorable investment environment for energy companies.

    With regard to dividends, the yield is low because most companies are prevented from paying dividends by the government an attempt to boost investment of those profits in Argentina. This is also an attempt to prevent much needed capital from leaving the country.

    I agree that the official inflation figure is cooked, but high inflation is not a reason for not investing in Argentina. High inflation has been an ongoing issue for some time and in some ways can work in favor of investors pushing asset values higher.
    Jan 26, 2014. 12:01 PM | 5 Likes Like |Link to Comment
  • Chile Poised For A Rebound? Consider iShares MSCI Chile Capped ETF [View article]
    Alex looking forward to the article on EPU, it is another under followed ETF that provides solid broad based exposure to what is one of Latam's fastest growing economies. But unlike Chile the Peruvian economy is export focused and far more dependent on demand for raw materials and precious metal prices.
    Jan 25, 2014. 06:08 PM | 1 Like Like |Link to Comment
  • Chile Poised For A Rebound? Consider iShares MSCI Chile Capped ETF [View article]
    Alex

    Thank you for the response and I agree with your comments. I think what a lot of investors fail to realize is that Chile's economy is quite developed and wit a strong middle-class consumption base it mirrors more closely the economies of developed nations such as Canada, the U.S., the U.K and Australia.

    Much of the economic growth achieved over recent years has come from domestic consumption rather than being solely reliant upon exports. As such it doesn't face the same headwinds and threats that export based economies dependent upon raw materials like Colombia, Peru and Brazil face. Also with forecast GDP growth of 4.9% for 2014, ECH offers a good opportunity to capitalize on its economic strength.

    I currently live in Colombia and am in the process of setting up a risk and investment consultancy here and have spent a considerable amount of time in Argentina. If you ever want to bounce some article ideas around on Latam, please let me know.

    Kind regards,

    Matt
    Jan 25, 2014. 04:04 PM | 4 Likes Like |Link to Comment
  • Chile Poised For A Rebound? Consider iShares MSCI Chile Capped ETF [View article]
    TakeFive

    Overall the stability, strength and resilience of the Chilean economy is impressive. Given the current route in emerging markets, now maybe a good time to buy if ECH falls to a low enough level to provide a compelling entry point. Especially with ECH now down by over 36% over the last year.

    As an ETF the other advantage is obviously the broad-based exposure it offers to that economy. It has been some time since I have seen a contributor take the time to examine Latam ETFs.

    Kind regards,

    Matt
    Jan 25, 2014. 09:10 AM | 2 Likes Like |Link to Comment
  • Banco Santander Brasil: Declining Asset Quality And Growing Headwinds Hamper Profitability [View article]
    Hi Bax

    Just read this article from Canada's Financial Post which provides an interesting over-view of the situation: http://bit.ly/M4rGkV

    I don't believe that it will have a significant impact on the more business/investor friendly and politically stable economies of Colombia, Peru or Chile. But there is an upcoming presidential election in Colombia and it has certainly brought some issues regarding political risk to the forefront.

    There is also a dearth of credible candidates which has meant there is a large portion of swinging voters or those who will make invalid votes.

    Hope that adds some more clarity,

    Matt
    Jan 24, 2014. 12:26 PM | Likes Like |Link to Comment
  • Banco Santander Brasil: Declining Asset Quality And Growing Headwinds Hamper Profitability [View article]
    Hi Bax

    For a long-term play on its reserves PBR is cheap but comes with considerable short to medium term risk. That said the Brazilian government seems to have realized that its policies were preventing the company from performing to its full potential and thereby reducing the benefit it brings to Brazil.

    As for CIG I am always a bit dubious about utility companies in Latam. They are typically the firs to be nationalized and are always subject to extreme pricing pressure from governments particularly in the case of Brazil. Typically utilities are a political tool because if they get to expensive there can be a range of protest, popular grievances and social unrest.
    Jan 24, 2014. 11:44 AM | Likes Like |Link to Comment
  • Banco Santander Brasil: Declining Asset Quality And Growing Headwinds Hamper Profitability [View article]
    Hi Bax

    From what I can from the ground is that it is having the opposite effect it is bringing the investment spotlight back on to those more stable and investor friendly countries like Colombia, Peru and Chile.

    It was only a matter of time before the Argentine central bank would be forced to stop propping up the value of the peso. With dwindling hard currency supplies and growing energy imports the situation in Argentina at this time is appearing quite dire.

    I hope your well.

    Kind regards,

    Matt
    Jan 24, 2014. 11:02 AM | Likes Like |Link to Comment
  • Chile Poised For A Rebound? Consider iShares MSCI Chile Capped ETF [View article]
    Buenos dias Alexander

    Great article and certainly an interesting thesis. I have been a huge fan of ECH for broad based exposure to what is Latam's most advanced economy for some time. But there are emerging headwinds which will affect its performance. Notably potential tax increases and an economic slowdown in China. Although I don't believe the impact of either will be significant. Looking forward to more articles.

    Cordial saludos,

    Matt
    Jan 24, 2014. 09:12 AM | 3 Likes Like |Link to Comment
  • Banco Santander Brasil: Declining Asset Quality And Growing Headwinds Hamper Profitability [View article]
    Hi Leo

    I am in the process of pulling together updates on all of the companies that I have analyzed. You have raised some very good points and I will certainly be covering those in a future update on BSBR. At this time I am waiting for 4Q13 results to be released in order to complete the update.

    Kind regards,

    Matt
    Jan 24, 2014. 08:59 AM | Likes Like |Link to Comment
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