The Value of Nothing

The Price of
Everything and
the Value of
Nothing
November 2019
www.nuricumbo.com

$3.81 $4.15 $4.16
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
July August September
Brazil
$43.88
$59.50 $57.59
$0.00
$20.00
$40.00
$60.00
Argentina
Exchange Rates
$3,279.53 $3,442.29 $3,477.98
$0.00
$1,500.00
$3,000.00
$4,500.00
Colombia
$697.22 $721.62 $728.66
$0.00
$200.00
$400.00
$600.00
Chile
$19.19 $20.60 $19.73
$0.00
$10.00
$20.00
$30.00
Mexico
$3.30 $3.39 $3.37
$0.00
$1.00
$2.00
$3.00
$4.00
Peru
Source: Bloomberg, 2019.
*USD / PEN
*USD / MXN
*USD / CLP*USD / ARS
*USD / BRL
*USD / COP

Source: Argentina, Brazil, Colombia, Chile, Mexico and Peru Central Banks, 2019.
54.40% 54.50% 53.50%
0.00%
20.00%
40.00%
60.00%
Argentina
Inflation Rate
3.22% 3.43%
2.89%
0.00%
1.50%
3.00%
4.50%
Brazil
3.79% 3.75% 3.82%
0.00%
1.00%
2.00%
3.00%
4.00%
Colombia
2.20% 2.30% 2.10%
0.00%
1.00%
2.00%
3.00%
Chile
3.78%
3.16% 3.00%
0.00%
1.50%
3.00%
4.50%
Mexico
2.11% 2.03% 1.85%
0.00%
0.90%
1.80%
2.70%
Peru

$67,994
$54,100 $48,703
$0
$25,000
$50,000
$75,000
$100,000
Argentina
International Reserves
$388,092 $385,730 $386,478
$0
$120,000
$240,000
$360,000
$480,000
Brazil
$52,366 $52,994 $52,869
$0
$18,000
$36,000
$54,000
$72,000
Colombia
$39,083 $39,503 $38,925
$0
$13,000
$26,000
$39,000
$52,000
Chile
$178,921 $180,377 $180,213
$0
$60,000
$120,000
$180,000
$240,000
Mexico
$66,753 $68,269 $67,860
$0
$20,000
$40,000
$60,000
$80,000
Peru
*Million U.S. Dollars
Source: Argentina, Brazil, Colombia, Chile, Mexico and Peru Central Banks, 2019.

42,057.77
24,608.56
29,066.96
0
12,000
24,000
36,000
48,000
Argentina
Stock Exchange
101,812.10 101,134.60 104,745.30
0
30,000
60,000
90,000
120,000
Brazil
1,562.13 1,559.52 1,577.96
0
500
1,000
1,500
2,000
Colombia
19,957.26 19,106.75 19,602.71
0
7,000
14,000
21,000
Peru
40,863.09 42,622.50 43,011.27
0
15,000
30,000
45,000
60,000
Mexico
4,972.36 4,804.37 5,059.04
0
1,200
2,400
3,600
4,800
Chile
*IPSA:IND
*MEXBOL:IND
*SPBLPGPT:IND
*MERVAL:IND
*IBOV:IND
*COLCAP:IND
Source: Bloomberg, 2019.

Foreign Direct Investmet
$3,260
$11,517 12162
$0
$4,000
$8,000
$12,000
2016 2017 2018
Argentina
$52,751
$67,583 $61,223
$0
$30,000
$60,000
$90,000
2016 2017 2018
Brazil
$13,850 $13,836
$11,010
$0
$5,000
$10,000
$15,000
2016 2017 2018
Colombia
$11,942
$6,856 $7,160
$0
$4,000
$8,000
$12,000
2016 2017 2018
Chile
$30,865 $32,091 $31,604
$0
$12,000
$24,000
$36,000
2016 2017 2018
Mexico
$6,863 $6,769 $6,175
$0
$3,000
$6,000
$9,000
2016 2017 2018
Peru
*U.S. Dollars at Current Prices in Millions
Source: United Nations Conference on Trade and Development, UNCTAD, 2019.
$12,162

Credit Ratings
Argentina
B
With NEGATIVE Outlook
(14 May 2019)
Source: Fitch Ratings
Brazil
BB-
With STABLE Outlook
(21 May 2019)
Colombia
BBB-
With NEGATIVE Outlook
(31 May 2019)
Chile
A
With STABLE Outlook
(5 March 2019)
Mexico
BBB
With STABLE Outlook
(5 June 2019)
Peru
BBB+
With STABLE Outlook
(28 March 2019)

Competitiveness Ranking
Argentina
57.986
(Ranking 56)
Source: IMD Competitiveness Index 2018
Brazil
55.797
(Ranking 60)
Colombia
57.357
(Ranking 58)
Chile
75.107
(Ranking 35)
Mexico
63.733
(Ranking 51)
Peru
60.236
(Ranking 54)

Transparency Index
Argentina
40
(Ranking 85)
Source: Corruption Perception Index by Transparency International (2018)
Brazil
35
(Ranking 105)
Colombia
36
(Ranking 99)
Chile
67
(Ranking 27)
Mexico
28
(Ranking 138)
Peru
35
(Ranking 105)

Country Presidents
Argentina
President: Mauricio Macri
Birth: 8 February 1959
In office since: 10 December 2015
Political Party: Propuesta Republicana
Brazil
President: Jair Bolsonaro
Birth: 21 March 1955
In office since: 1 January 2019
Political Party: PSL
Colombia
President: Iván Duque Márquez
Birth: 1 Agosto 1976
In office since: 7 Agosto 2018
Political Party: Centro Democrático
Chile
President: Sebastián Piñera E.
Birth: 1 December 1949
In office since: 11 March 2018
Political Party: Independent
Mexico
President: Andrés Manuel López O.
Birth: 13 November 1953
In office since: 1 December 2018
Political Party: Morena
Peru
President: Martín Vizcarra
Birth: 22 Marzo 1963
In office since: 23 March 2018
Political Party: Peruanos por el Kambio

Upcoming Elections
Argentina
Presidential Elections: 2019
Term: 4 Years
Congress: 2019 (130 Deputies, 26 Senate)
Governors: 2019 (22 Governors)
Brazil
Term: 4 Years
Colombia
Term: 4 Years
Chile
Term: 4 Years
Mexico
Term: 6 Years
Governors: 2024 (President, 32 Governors)
Peru
Term: 5 Years
Congress: 2021 (130 Congressmen)

Featured Content
TIME FOR HAPPY VALUATIONS?
This month we learned about the plans of Aramco to go public. Aramco is the state oil company from Saudi Arabia. Not
many details have been shared, including how much of the company will be made public and for how much, but a
valuation between $1.5 and 2.0 Trillion US Dollars is expected. Not bad. This company will have a valuation almost two
times the whole economy of Mexico. In 2018, the Company recorded net income of about $111 Billion US Dollars.
Without a doubt, one of the most productive oil companies in the world, more amazing if one considers we are talking
about a state company.
On the other side of the spectrum, this month we heard about Pemex losses in 2019. Failing revenue pushed the
Company to a net loss of 87.4 Billion MXN ($4.43 Billion USD) in the third quarter. Pemex has been under intense
pressure from international credit rating agencies to get its finances onto a more sustainable path. Fitch in June became
the first major credit rating agency to downgrade Pemex’s bonds to so-called junk status. If Moody’s or S&P follows suit
with a junk designation, it would trigger a sell-off of Pemex bonds potentially worth billions of dollars.
Another recent case of strange valuations: WeWork has undergone a dramatic fall from grace in the last few weeks. Just
two months ago the office rental start up was expecting to offer shares to the public for a total of $47 Billion USD. This
soon went down to half that amount and then investors rapidly pulled their support for an IPO above $12 Billion USD.
The WeWork IPO saga follows other sad IPO cases such as taxi hailing apps Uber and Lyft earlier in 2019, as well as the
messenger app Slack and the much-hyped home exercise business Peloton. All are now trading well below their offer
prices. The future of WeWork now will depend on SoftBank, its largest investor.
We as financial executives need to be totally convinced and certain about the value of the companies or investments we
are looking at. It does not matter if the economy is good or bad, or if these are happy or sad times, fair value continues
to be king, and reality always has the last word.

Latin America Update
Latin America's Mixed Signals
Undeniably, 2019 has been a grim year for Latin America. The
IMF estimates that the region will see only 0.6% GDP growth this
year, well below the world average of 3.2% and even worse than
the 1% registered in the region in 2018. If Venezuela is excluded,
the estimate is a bit better at 1.3%. This reflects dashed hopes for
more-robust growth in Brazil, Mexico and Argentina, the largest
economies in the region, and the toll taken by the Chinese and
American economic slowdowns and trade wars.
Santander’s Venture Capital Fund eyes fresh LA Investments
A venture capital fund backed by Spanish bank Santander is
eyeing fresh opportunities across Latin America, days after it
completed an investment in Mexican financial technology startup
Klar. Mexico and Brazil are the largest, most active and fastest-
growing markets for so-called fintechs in Latin America. Local
entrepreneurs have been developing technologies ranging from
electronic payments to savings and loans.
Mexican Auto Exports Slow on falling Demand
Vehicle exports through Mexican ports grew just 1.35% from
January to September, a stark contrast from the 27.8% increase in
the same period a year ago. Separate figures, compiled by the
Mexican Association of the Automobile Industry (AMIA), show
exports of Mexican vehicles by both sea and land fell in all major
markets except the United States. Sales out of the country are
key to Mexico’s manufacturers, who export all but 12 percent of
light vehicles made in the country.
How LA can Punish Corruption without killing Companies
The business and political landscape in Latin America poses
challenges. One example is the relationship between executives
and companies. Numerous Latin American corporations are family-
owned or controlled – including three of the 10 largest business
groups in the region – which makes it harder to separate
individuals from legal entities. When family and business ties
overlap, companies are probably less likely to fully cooperate.
Why political turmoil is erupting across Latin America
In Peru, the president dissolved Congress. In Honduras, the
president is battling U.S. allegations he received bribes from drug
lords. In Haiti, demonstrations threaten to topple the government.
And in Ecuador, protests grew so chaotic that the
administration high-tailed it out of the capital city. Political crises
are erupting across Latin America, compounding the difficulties of
a region already struggling with massive migration and economic
troubles.
Overview of the Manufacturing Industry in Key LATAM Markets
With a population estimated at more than 639 million in 2019,
Latin America is the fourth most populous region in the world. Its
annual GDP of US$5.32 trillion ranks it as the fifth highest regional
GDP. The manufacturing industry remains at the center of
innovation, international trade growth, and economic expansion.
Latin America's top manufacturing markets demonstrate diverse
strengths and characteristics that contribute to their economic
resilience and growth potential.

Our Firm at a glance
Key Facts Industries
• 12 PRACTICE LEADERS
• 40 SENIOR CONSULTANTS
• 240+ COMBINED YEARS OF
EXPERIENCE
• INTERNATIONAL
EXPOSURE
• LATAM CAPABILITIES
• MULTIDISCIPLINARY
Mexico Business
Network
Other Strategic
Resources
• MANUFACTURING
• FINANCIAL SERVICES
• PROFESSIONAL SERVICES
• RETAIL
• ADVERTISING
• EDUCATION
• PRIVATE EQUITY
• FAMILY BUSINESS
• IMEF
• IMCP
• COMCE
• ABM
• ASOFOM
• AMEXCAP
• CHAMBERS OF
COMMERCE
• CFO OF THE YEAR
• AAPAUNAM
• FENG
• IFAC
• ADN NEWS
• BLOOMBERG
• EL FINANCIERO
• VERITAS
For more information: www.nuricumbo.com
EY PWC. BBVA / BANAMEX ZIMAT CIT METLIFE GM
KPMG DELOITTE. INTERPUBLIC BOMBARDIER +GF+ RGP KANDEO
1990 1995 2000 2004 2005 2010 2015 2018
Formal launch as
independent consultancy
Professional Experience
as Employees
History
Some of our interventions as
Consultants

Our Service Portfolio
ASSURANCE
FINANCE
TALENT
STRATEGY
FINANCIAL DUE DILIGENCE (M&A)
BACKGROUND CHECKS
BUSINESS ASSESSMENTS
FRAUD PREVENTION/DETECTION
For more information: www.nuricumbo.com
STRATEGIC IMPLANTS
INTERIM MANAGEMENT
PROJECT SUPPORT
NOM-035 COMPLIANCE
DEBT/EQUITY SOLUTIONS
FIDEICOMISOS FINTECH
CRISIS STRESS TESTING
PERSONAL FINANCIAL PLANNING
COMISARIOS / CONSEJEROS
ADVISORY BOARD
DIGITAL TRANSFORMATION
INNOVATION & GROWTH

Armando NuricumboRodrigo Llanos
Miguel Amador
Guillermo Lagos
Former CFOFormer Banker
Former Controller / Auditor
Former CEO
Jesus Bush
PWC. IPG. Bombardier. RGP.
25 years of experience.
Valmex. Inverlat. Arka.
Whirlpool. Banco Azteca.
EY. Smurfit. Maxcom. Devlyn.
3M. Imperial Chemical. IMEF
Alejandro Rico
Tax Partner
KPMG. Confies.
Jose Trevino
Former NAFTA Negotiator
Comexi. Comce. Cancham.
Angel Hernandez
Former CFO
Ingram. Dresser. TRW.
Roberto Fernandez
Former CIO
AT&T Capital. CIT. Alta.
Enrique Ugarte
Former CEO
ProMexico. CCE. Edomex.
Former CIO
Evaristo Pulido
Former VP Structured Finance
PWC. Lala. Gicsa. ADO.
Marisol Baca
Former VP Administration
CFE. BID. Real Financiera.
Highly-experienced and talented team at your service
Our team can provide effective solutions to complex business problems. We can be deployed internationally for the time strictly
required by your project. High-quality, highly-efficient, cost-effective talent that creates value from the very first minute.

APOYO CIERRE DE AÑO
RECURSOS TEMPORALES PARA PROYECTOS ESPECIALES
Nos especializamos en áreas de
contabilidad, impuestos y finanzas.
Recursos con amplia trayectoria en
empresas multinacionales y
ambientes complejos.
Esquema altamente flexible que
permite atacar proyectos
especiales de forma rápida y
efectiva.
NUESTRA PROPUESTA DE VALOR
Nuestros recursos pueden atender proyectos especiales con alto profesionalismo y confidencialidad.
Pueden trabajar bajo modelo implant para proporcionar capacidades adicionales por el tiempo
estrictamente necesario, y son un excelente back-up en caso de rotación de personal clave dentro de
su organización. Mayores informes: contacto@nuricumbo.com

Internal Audit Support
For more information, please visit our website
or email us at contacto@nuricumbo.com
2
2
We can enhance your audit projects in Mexico,
Latin America, or anywhere else.
Talent Mobility
Flexibility Capabilities
Our consultants can travel in Mexico, in Latin
America, or basically anywhere you need
them. We have delivered audit projects in
more than 25 countries around the world.
Worldwide Mobility
We have a multidisciplinary approach,
combining specialists in internal controls,
forensics, IT, business intelligence, process
automation and compliance. We have an
internal quality function to ensure objectives
are always met. The result is a powerful
combination of skills that allows us to deliver
extra value in each engagement.
Special Audit Capabilities
Talented Senior Consultants
Maximum Flexibility
Our talent is available under a very
flexible model. We have delivered
projects that have taken 1 day, 1 month
or 1 year to complete. Our rates are the
best in the market. We can manage co-
sourcing or out-sourcing audit
initiatives. And in Latin America, we
have the local knowledge and insight.
We have a base of approximately 40
senior audit consultants, all of them
highly trained and with rich experience
in multinational environments, ready to
support your audit projects.
Our objective: To work with the best internal audit departments around the world
to help them manage the risks and opportunities of today’s global markets.

We care about your business priorities.
Let’s talk!
E-mail: contacto@nuricumbo.com
Mobile/Whatsapp: + 52 (155) 5453 6309
Skype: nuricua
Twitter: @a_nuricumbo
Office: Montes Urales 424
Lomas de Chapultepec, CDMX
Please visit our website

The Value of Nothing

Recommended

Recommended

More Related Content

What's hot

What's hot (13)

Similar to The Value of Nothing

Similar to The Value of Nothing (20)

More from Nuricumbo + Partners

More from Nuricumbo + Partners (20)

Recently uploaded

Recently uploaded (20)

The Value of Nothing