Recession hits Japan; Latin America reacts | Felaban 2014 | Video

From the conference floor of Felaban 2014 in Medellin, Colombia, World Finance speaks to BTG Pactual's Mauricio Gutierrez on what Japan's recession could mean for its presence in Latin American infrastructure investment

November 17, 2014
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Transcript

The surprising fall into a recession – that’s how Japan’s current economic situation is being described by market watchers. BTGPactual’s Mauricio Gutierrez discusses Japan’s presence in Latin America’s vital infrastructure sector, and the possibilities that may lay in store as banks react to its new economic reality.

The surprising fall into a recession – that is how Japan’s current economic situation is being described by industry watchers. Here to shed light on what that means for foreign lending, Mauricio Gutierrez.

World Finance: The news has just hit, what do you make of it?

Mauricio Gutierrez: Well I think the financial situation in Japan has impressed us for quite some time. In Latin American markets where the Japanese banks compete, we have seen them to act very aggressively, to have cost of funds that are below zero sometimes, so that allows them to lend money to projects still at home, and I imagine other countries as well.

Very aggressively, we have seen them compete with us in our projects, in infrastructure projects, and we’re very impressed. I don’t think this news that we’ve just had of them going into a recession will change that, because if anything we will still see low interest rates in Japan, and very low cost of funds. So if there’s less activity in Japan, the likely scenario is that this aggressiveness outside of Japan will continue. 

World Finance: Do you see more opportunities coming out of Japan in light of the current destabilising economic situation that’s happening?

Mauricio Gutierrez: I see them very present in the Latin American markets, very aggressive. I don’t see that aiming down, the opposite. A week ago I just saw a very aggressive proposal from a Japanese bank to a project that we’re also approaching. So I think that will continue.

Maybe I’m being optimistic, maybe some of these banks will have problems at home that will affect their appetite overseas, but I think LatAm is a natural market for them to grow, they’re present in the main market. I think they will continue taking advantage of the growth that is coming out of this region. 

World Finance: It sounds like optimism abounds from your perspective. Mauricio Gutierrez, thank you so much for joining me today.

Mauricio Gutierrez: You’re so welcome. Thank you.