Alba at Superreturns Emerging Markets 2019
Alba presented at Superreturns Emerging Markets 2019 which was held at the Hotel Okura in Amsterdam.
Alba participated in two panels: Mitigating Currency Depreciation and Markets to watch: Argentina.
Key takeaways from the currency panel included the following strategies: (i) seek export companies or those that have their revenues in hard currency, (ii) focus on the sectors and companies that have the ability to transfer the ensuing inflation to their prices, (iii) set aside a portion of the purchase price as seller paper denominated in local currency, (iv) invest in buy and build platforms so that you invest in multiple years averaging out your FX entry value, (vi) set up structures in minority investments where you can transfer the currency depreciation to the majority partner, and (vi) seek for financial instruments once you have certainty on the investment or exit cash flows.
On the Argentina panel, it was discussed how Argentina did most of the homework by achieving a primary and current account surplus in 2019, reducing government spending from 25% of GDP to 19% in five years. Other topics included: (i) Argentina's infrastructure ramp up by renewing 7,000 km of roads, modernization of 30 airports leading to an increase in domestic traffic by 40% in the last 5 years, 34,000 km of fiber optics being laid out; (ii) Argentina's move to renewable energy sources going from zero to 8% of its power matrix in a short period of time; and (iii) how institutions are being reshaped along the years.