powerpoint presentation · title: powerpoint presentation author: gisele natalie nine created date:...
TRANSCRIPT
Economics | July 2020
Executive Summary
On the revenue side, the extended deferral of tax payments combined with the weakening economic activity could lead to primary revenue
losses of around BRL225 billion in 2020 (3.1% of GDP), in comparison to the pre-crisis outlook.
Regarding the expenditures side, we believe that the broad package of primary fiscal spending measures to deal with the current
crisis will total nearly BRL505 billion (7% of GDP), an amount substantially larger than the average for other emerging economies.
Based on these assumptions, we now anticipate the 2020 public sector primary deficit at BRL845 billion (12.2% of GDP). For 2021
and 2022, we forecast primary fiscal deficits of BRL250 billion (3.4% of GDP) and BRL195 billion (2.5% of GDP), respectively.
Concerning the nominal fiscal deficit (which includes nominal interest payments), our projections show a noteworthy reduction from 16.4% of
GDP in 2020 to 7.2% of GDP in 2021 and 6.3% of GDP in 2022.
Considering the gross public-debt-to-GDP ratio, we foresee an expansion by 19 p.p. from 2019 to 2020 (from 75.8% to 94.8%) and further
increases until 2027, when the indicator should peak at levels slightly above 100%, following a convergence path afterwards. It never hurts
to emphasize our hypothesis that the unprecedented fiscal stimulus stemming from the pandemic will be limited to 2020.
These forecasts also assume that government and Congress will continue to pursue the Brazilian fiscal consolidation in the long-term.
Owing to the very challenging starting point for this, we calculate the need for a total fiscal adjustment of at least 5 p.p. of GDP
(BRL350 billion) in the coming years.
The first (and most important) step in order to ensure fiscal solvency would be to support the constitutional spending cap
framework. On this matter, we reiterate our view that compliance with this fiscal rule, until 2022, would be facilitated by taking four
measures: (i) real stability of the minimum wage; (ii) nominal stability of public servants’ wages; (iii) a hiring freeze in federal public services;
and (iv) a ban on the creation of new mandatory expenditures. For 2023 onwards, nevertheless, we highlight that compliance with the
spending-ceiling rule will be feasible only if the government is able to approve further measures to reduce mandatory outlays.
Rodolfo Margato
Santander Macro Research Team
Fiscal measures related to Covid-19 crisis – International Comparison
Sources: International Monetary Fund (IMF), Ministry of Economy and Santander estimates.
Fiscal Measures Around the World (% GDP)
Impact on Government Primary Result
8.27.3
5.2
-2
2
6
10
14
18
22Ja
pan
Sin
gapore
Austr
alia
Austr
ia
Sw
itzerland
Chile
Peru
Icela
nd
Canada
Thaila
nd
Germ
any
Advance
d E
conom
ies
BR
AZ
IL
United S
tate
s
New
Zeala
nd
Gre
ece
India
Em
erg
ing E
conom
ies
Rom
ania
Turk
ey
United K
ingd
om
Italy
Indonesi
a
Mala
ysi
a
Chin
a
Fra
nce
Arg
entin
a
Phili
ppin
es
Russi
a
Arg
entin
a
Colo
mbia
Fiscal measures announced by the federal government in order to mitigate the economic hit from the pandemic
✓ The emergency financial aid for informal workers and low-income households (“coronavoucher”) was extended for an additional two
months (at its current value of BRL600 per month) - exactly in line with our expectation -, which implies a fiscal cost of ~BRL100 billion.
✓ We believe that the actual disbursement of some emergency lifelines will be below the authorized financial limit (~BRL25 billion).
✓ Therefore, we forecast that the wide set of emergency primary fiscal measures will total nearly BRL 505 billion (7% of GDP) in 2020.
➔ BRL485 billion from the expenditure side and BRL20 billion from the revenue side (only measures of tax exemption).
Emergency aid for informal and intermittent workers, self-employed, microenterpreneurs and low-income workers 254.2 3.50
Resource transfers to offset losses from tax collection and to streghten public health systems in states and municipalities 60.2 0.83
Compensation payments for workers with suspended or reduced empolyment contracts (reduction in worload and wages) 51.6 0.71
Emergency credit line for small and medium-sized companies to finance payroll for two months 34.0 0.47
Resources for Credit Guarantee Funds 20.0 0.28
Resource transfers to the subnational health systems (it includes transfers to the National Health Fund - FNS) 19.0 0.26
Securing level of transfers through state and municipal participation funds 16.0 0.22
National support program for small companies and microbusinesses (PRONAMPE, in Portuguese) 15.9 0.22
Temporary exemption of IOF (Financial Transactions Tax) for credit operations 14.2 0.20
Extraordinary funds for the Ministry of Health 11.6 0.16
Temporary suspension of municipal debt service payments with the social security system 5.6 0.08
Supplementary resource transfers to the National Health Fund 4.5 0.06
Zero import tariffs for medical, hospital and healthcare products 4.5 0.06
Extraordinary funds for the Ministries of Defense, Citizenship, Foreign Affairs and Science & Technology 3.1 0.04
Addition of 1.2 million households to the Bolsa Família entitlement program 3.0 0.04
Other Measures 11.5 0.15
TOTAL 528.4 7.28
Sources: Ministry of Economy, BNDES and Santander estimates.
Fiscal Measures with impact on central government's primary result BRL billion % GDP
Fiscal Accounts – Public Sector’s Primary Result
Public Sector’s Primary Deficit (% GDP)
Sources: The National Treasury Secretariat, Brazilian Central Bank and Santander forecasts.
Public Sector’s Nominal Deficit (% GDP)
1.3
12.2
0.8
3.4
0.4
2.5
Baseline scenario before COVID-19 crisis Current baseline scenario
2020
2021
2022
5.6
16.4
4.9
7.2
4.8
6.3
Baseline scenario before COVID-19 crisis Current baseline scenario
2020
2021
2022
* Our baseline scenario considers the extension of measures that allow for the deferral of tax payments (Brazilian government should allow tax debts to be paid in installments over the
next few years). We estimate this measure could expand the 2020 public sector primary deficit by about BRL85 billion, with a payback likely for subsequent years.
Sources: The National Treasury Secretariat, Brazilian Central Bank and Santander forecasts.
2020 2021 2022 2020 2021 2022 2020 2021 2022 2020 2021 2022 2020 2021 2022
2.0 2.5 2.8 - - - - - - -105 -76 -45 -99 -68 -35
-6.4 4.4 3.1 225* 150 135 490 10 10 -820 -237 -190 -845 -250 -195
Base Case Before the Pandemic
Current Base Case
Fiscal Scenarios
Public Sector's Primary Result in 2020, 2021 and 2022
GDP Growth (%)Losses of Primary Expansion in Primary Central Government's Public Sector's
Revenue (BRL bn) Spending (BRL bn) Primary Result (BRL bn) Primary Result (BRL bn)
Fiscal Accounts – Public Sector’s Primary Result in coming years
Sources: Brazilian Central Bank and Santander forecasts.
Public Sector’s Primary Result (% GDP)
3.3 2.9
-2.5
-0.9
-12.2
-3.4-2.5
0.31.7
-14
-12
-10
-8
-6
-4
-2
0
2
4
200
7
200
8
200
9
201
0
201
1
201
2
201
3
201
4
201
5
201
6
201
7
201
8
201
9
202
0
202
1
202
2
202
3
202
4
202
5
202
6
202
7
202
8
202
9
203
0
Forecasts
Fiscal Accounts – Revenues and Expenditures
Sources: The National Treasury Secretariat, Brazilian Central Bank
and Santander forecasts.
Fiscal Items (% of GDP) 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Total Revenue 21.7 22.8 20.1 20.8 20.9 21.1 21.3 21.6 21.8 22.1 22.3 22.5 22.8
Revenues Collected by the Federal Revenue Office 13.3 13.2 12.2 12.4 12.5 12.6 12.7 12.8 12.9 13.0 13.1 13.2 13.3
Net Social Security Revenues 5.7 5.8 5.6 5.5 5.5 5.6 5.6 5.7 5.8 5.8 5.9 6.0 6.0
Revenues Not Collected by the Federal Revenue Office 2.8 3.8 2.3 2.8 2.9 2.9 3.0 3.1 3.2 3.2 3.3 3.4 3.5
Transfers by Revenue Sharing 3.8 4.0 3.7 3.7 3.7 3.7 3.8 3.8 3.8 3.8 3.9 3.9 3.9
Net Revenue 18.0 18.7 16.4 17.0 17.2 17.4 17.6 17.8 18.0 18.2 18.4 18.7 18.9
Total Expenditure 19.8 20.1 28.1 20.2 19.5 19.1 18.7 18.5 18.2 17.9 17.7 17.4 17.2
Social Security Benefits 8.6 8.7 9.8 9.5 9.4 9.3 9.3 9.3 9.2 9.2 9.2 9.1 9.1
Payroll 4.4 4.4 4.7 4.4 4.2 4.0 3.9 3.7 3.6 3.5 3.4 3.3 3.2
Other Mandatory Expenses 2.9 2.7 11.3 2.8 2.6 2.6 2.5 2.4 2.4 2.3 2.2 2.2 2.1
Mandatory Expenses with Cash Control 2.0 2.0 1.5 2.1 2.0 2.0 1.9 1.9 1.8 1.8 1.7 1.7 1.7
Discretionary Expenses 1.9 2.3 0.8 1.5 1.3 1.2 1.2 1.2 1.1 1.1 1.1 1.1 1.1
Central Government's Primary Balance -1.8 -1.3 -11.9 -3.2 -2.3 -1.7 -1.1 -0.7 -0.2 0.3 0.7 1.3 1.7
Nominal GDP (BRL billion) 6,827 7,183 6,919 7,377 7,856 8,314 8,761 9,222 9,708 10,219 10,757 11,324 11,920
Central Government's Primary Balance
16.5
18.8
20.2
17.4
18.6
16.4
17.8
18.9
14.815.6
16.8
19.9
28.1
20.2
17.2
12
14
16
18
20
22
24
26
28
30
19
98
20
00
20
02
20
04
20
06
20
08
20
10
20
12
20
14
20
16
20
18
20
20
F
20
22
F
20
24
F
20
26
F
20
28
F
20
30
F
Central Government's Net Revenue andTotal Spending (% GDP)
Net Revenue
Total Spending
Fiscal Accounts – Public Sector’s Financing Needs
Sources: Brazilian Central Bank and Santander forecasts.
Public Sector’s Fiscal Balance (% GDP)
-18
-16
-14
-12
-10
-8
-6
-4
-2
0
2
4
200
6
200
7
200
8
200
9
201
0
201
1
201
2
201
3
201
4
201
5
201
6
201
7
201
8
201
9
202
0F
202
1F
202
2F
202
3F
202
4F
202
5F
202
6F
202
7F
202
8F
202
9F
203
0F
Primary Fiscal Result
Nominal Interest Payments
Nominal Fiscal Result
Forecasts
Fiscal Accounts – Trajectories for the Brazilian Government Debt
General Government Gross Debt (% GDP)
Sources: Brazilian Central Bank and Santander forecasts.
75.5 74.7 73.871.0
59.8
59.2
51.5
94.8
96.096.9
101.5 (peak at 2027)
88.3
45
55
65
75
85
95
105
200
8
200
9
201
0
201
1
201
2
201
3
201
4
201
5
201
6
201
7
201
8
201
9
202
0
202
1
202
2
202
3
202
4
202
5
202
6
202
7
202
8
202
9
203
0
203
1
203
2
203
3
203
4
203
5
Baseline Scenario beforethe Covid-19 crisis
Current BaselineScenario
➔ Main assumptions before the Covid-19 crisis: (i) Potential GDP growth = 2.2%; (ii) Neutral real interest rate = 2.8%; (iii) Long-term inflation =
3.0%; (iv) Net sales of foreign exchange reserves = USD20 billion in 2020; (v) Advanced payments from BNDES to the National Treasury = BRL60
billion in 2020, BRL40 billion in 2021, BRL30 billion in 2022, and BRL15 billion in 2023.
➔ Main assumptions for the current baseline scenario: (i) Potential GDP growth = 2.2%; (ii) Neutral real interest rate = 3.0%; (iii) Long-term
inflation = 3.0%; (iv) Net sales of foreign exchange reserves = USD25 billion in 2020; (v) Advanced payments from BNDES to the National Treasury =
no payment in 2020, BRL30 billion in 2021, BRL25 billion in 2022, and BRL20 billion in 2023.
Fiscal Accounts – Trajectories for the Brazilian Government Debt
Public sector’s primary result required for the stabilization of the gross public debt-to-GDP ratio at
90%, 100% and 115%:
Sources: The National Treasury Secretariat, Brazilian Central Bank and Santander estimates.
Potential GDP Growth /Real Interest Rate
1.0% 1.5% 2.0% 2.5% 3.0%
2.5% 1.3% 1.4% 1.6% 0.8% 0.9% 1.1% 0.4% 0.4% 0.5% -0.1% -0.1% -0.1% -0.5% -0.6% -0.6%
3.0% 1.7% 1.9% 2.2% 1.3% 1.4% 1.6% 0.8% 0.9% 1.0% 0.4% 0.4% 0.5% -0.1% -0.1% -0.1%
3.5% 2.1% 2.4% 2.7% 1.7% 1.9% 2.2% 1.2% 1.4% 1.6% 0.8% 0.9% 1.0% 0.3% 0.4% 0.4%
4.0% 2.6% 2.9% 3.3% 2.1% 2.3% 2.7% 1.7% 1.8% 2.1% 1.2% 1.3% 1.6% 0.8% 0.9% 1.0%
4.5% 3.0% 3.3% 3.8% 2.5% 2.8% 3.3% 2.1% 2.3% 2.7% 1.6% 1.8% 2.1% 1.2% 1.3% 1.5%
Fiscal Accounts – Simulations for Alternative Scenarios
Sources: The National Treasury Secretariat, Brazilian Central Bank and Santander forecasts.
General Government Gross Debt (% GDP)
101.5(peak in 2027) 97.8
88.3
106.1109.2 (peak in 2030)
102.5
40
50
60
70
80
90
100
110
120
200
8
200
9
201
0
201
1
201
2
201
3
201
4
201
5
201
6
201
7
201
8
201
9
202
0
202
1
202
2
202
3
202
4
202
5
202
6
202
7
202
8
202
9
203
0
203
1
203
2
203
3
203
4
203
5
Scenario with fiscal adjustment measures and structuralreforms (Santander base case)
Scenario for triggering the self-correction provisions of theconstitutional spending cap rule in 2021
Sources: International Monetary Fund (IMF), OECD and Santander forecasts.
General Government Gross Debt (% GDP)
International Comparison
Fiscal Accounts – Trajectories for the Brazilian Government Debt
65.664.2
60.2
84.188.4
106.7
45.1
33.738.3
48.354.8
69.0
82.5
71.4
106.5 106.7
104.0
117.5
20
30
40
50
60
70
80
90
100
110
120
130
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
201
1
201
2
201
3
201
4
201
5
201
6
201
7
201
8
201
9
202
0F
202
1F
202
2F
Brazil
Emerging Economies
Advanced Economies
Sources: Brazilian Central Bank and Santander forecasts.
56.3 55.8 55.052.3
44.840.9
30.5
67.5
71.874.0 77.2 (peak at 2027)
67.2
25
35
45
55
65
75
85
200
8
200
9
201
0
201
1
201
2
201
3
201
4
201
5
201
6
201
7
201
8
201
9
202
0
202
1
202
2
202
3
202
4
202
5
202
6
202
7
202
8
202
9
203
0
203
1
203
2
203
3
203
4
203
5
Baseline Scenario beforethe Covid-19 crisis
Current BaselineScenario
Public Sector Net Debt (% GDP)
Fiscal Accounts – Trajectories for the Brazilian Government Debt
Government Debt Management
➢ In contrast to March and April, actual data for May and preliminary data
for June show that public securities issuances have been gradually
increasing, which is important for keeping the National Treasury’s “liquidity
cushion” at comfortable levels. We calculate this reserve (a management tool
that serves to mitigate the rollover risk in stress scenarios) is currently a bit
above BRL500 billion (6.9% of GDP), an amount enough to pay off
federal debt maturities until December 2020.
➢ We reinforce the possible use of the Central Bank’s FX results in 1H20
(mostly due to a higher value of foreign exchange reserves in BRL) to
strengthen the “liquidity cushion”. We believe the total amount to be
transferred from the Central Bank to the National Treasury should
be around BRL400 billion (5.5% of GDP).
Sources: The National Treasury Secretariat, Brazilian Central Bank and Santander.
1.7
2.7
4.0
3.7
5.5
3.7
5.0
4.6
1
2
3
4
5
6
Jan-0
5
Sep
-05
Ma
y-06
Jan-0
7
Sep
-07
Ma
y-08
Jan-0
9
Sep
-09
Ma
y-10
Jan-1
1
Sep
-11
Ma
y-12
Jan-1
3
Sep
-13
Ma
y-14
Jan-1
5
Sep
-15
Ma
y-16
Jan-1
7
Sep
-17
Ma
y-18
Jan-1
9
Sep
-19
Ma
y-20
Average Term of Federal Public Debt Issuances(in years) - 12-month rolling average
(170)
(120)
(70)
(20)
30
80
130
2017 2018 2019 Jan/20 Feb/20 Mar/20 Apr/20 May/20
Net Redemptions of Public Debt Securities(BRL billion)
Net redemptions of BRL166 billion from Jan/20 to May/20 500
600
700
800
900
1.000
May-2
0
Jun
-20
Jul-
20
Aug-2
0
Sep-2
0
Oct-
20
Nov-
20
Dec-
20
Jan
-21
Feb-2
1
Mar-
21
Apr-
21
May-2
1
Jun
-21
Jul-
21
Aug-2
1
Sep-2
1
Oct-
21
Nov-
21
Dec-
21
Federal Public Debt Maturitiesin the next 12 months (BRL billion)
Next 6 months = BRL448 billionNext 9 months = BRL581 billion
Next 12 months = BRL954 billion
Compliance with the Constitutional Spending Cap RuleThe compliance with the expenditure ceiling rule, until 2022, would be guaranteed by taking four measures:
(i) Real stability of the minimum wage; (ii) Nominal stability of the public servants’ wages; (iii) Hiring freeze in federal public services;
(iv) Ban on the creation of new mandatory expenditure.
For 2023 onwards, nevertheless, we draw attention that the compliance with the spending ceiling rule will be feasible only if
government is able to approve further measures to reduce mandatory outlays.
Surplus (+) or Insufficiency (-) to comply with the
constitutional spending cap rule (BRL billion)
0.47 0.38 0.19 0.06 -0.11 -0.27 -0.43 -0.60
~BRL 130 billion (-1.4% of GDP)
Sources: The National Treasury Secretariat, Ministry of Economy and Santander estimates.
34.026.2
13.94.7
-8.9
-23.9
-40.1
-58.4
2019 2020 2021 2022 2023 2024 2025 2026
(Possible) Fiscal Adjustment Measures in the Post-Crisis Environment:Just a few examples and preliminary estimates...
Revenues (Annual Impact ~BRL115 billion / 1.6% of GDP) Expenditures (Annual Impact ~BRL65 billion / 0.9% of GDP)
- Inheritance and Donation Tax - End of Wage Bonus (granted for formal workers)
Raising the aliquot from 8% to 30%: BRL30 – BRL 35 billion Impact of BRL16 billion
- Tax on Large Fortunes - Extending the grace period for the unemployment insurance benefit
Incidence on Wealth > BRL20 million: BRL30 – BRL35 billion Impact of BRL12 billion
- Exclusive Funds - 10% linear reduction in tax exemptions / tax waivers
(One-off) Impact of BRL10 billion Impact of BRL27 billion
- Changes in Personal Income Tax - Reduction of public servants’ working hours and wages (up to 25%)
Aliquot of 35% on earnings > BRL25k per month: BRL6 billion Impact of BRL9 billion
- Profits & Dividends
Aliquot of 15%: BRL25 billion
- End of JCP (“Interest on Equity Capital”) payment deduction
Impact of BRL8 billion.
Santander Brazil Macro Forecasts2015 2016 2017 2018 2019 2020 2021 2022
GDP (%)
GDP Growth -3,5 -3,3 1,3 1,3 1,1 -6,4 4,4 3,2
Inflation (%)
IPCA-IBGE 10,7 6,3 2,9 3,7 4,31 1,5 2,7 3,5
IGP-M 10,5 7,2 -0,5 7,5 7,30 6,5 4,0 4,0
FX Rate
BRL/USD - end of period 3,90 3,26 3,31 3,87 4,03 4,95 4,50 4,15
BRL/USD - average 3,33 3,49 3,19 3,65 3,94 4,95 4,64 4,27
Interest Rates (%)
SELIC - end of period 14,25 13,75 7,00 6,50 4,50 2,25 2,25 4,00
Labor Market
Unemployment rate (average) 8,5 11,5 12,8 12,3 11,90 13,9 13,1 12,0
Balance of Payments
Exports (USD bi) 191,0 185,2 217,7 239,3 225,4 199,9 222,2 248,3
Imports (USD bi) 171,5 137,6 150,7 181,2 177,3 139,3 157,0 173,2
Trade Balance (USD bi) 19,5 47,6 67,0 58,0 48,0 60,5 65,2 75,1
Current Account (USD bi) -54,5 -24,2 -15,0 -41,5 -49,5 1,4 -4,4 -7,4
Current Account (% of GDP) -3,0 -1,3 -0,7 -2,2 -2,7 0,1 -0,3 -0,4
Fiscal Accounts
Primary Balance (% of GDP) -1,9 -2,5 -1,7 -1,6 -0,9 -12,2 -3,4 -2,5
Net Public Sector Debt (% GDP) 35,6 46,1 51,4 53,6 55,7 67,5 71,8 74,0
Gross Public Sector Debt (% GDP) 65,5 69,8 73,7 76,5 75,8 94,8 96,0 96,9
Brazil Macroeconomic Research Team
Ana Paula Vescovi*Chief Economist
Mauricio Oreng*Head of Research & Strategy
Jankiel Santos*External Sector
Mateus Rabello*Global Economics
Rodolfo Margato*Fiscal Policy
Everton Gomes*Modeling
Daniel Karp*Inflation
Lucas Seabra*Economic Activity
Contact/Important Disclosures
CONTACTS / IMPORTANT DISCLOSURES
Macro Research Maciej Reluga* Head Macro, Rates & FX Strategy – CEE [email protected] 48-22-534-1888 Juan Cerruti * Senior Economist – Argentina [email protected] 54 11 4341 1272 Ana Paula Vescovi* Economist – Brazil [email protected] 5511-3553-8567
Juan Pablo Cabrera* Economist – Chile [email protected] 562-2320-3778 Guillermo Aboumrad* Economist – Mexico [email protected] 5255-5257-8170 Piotr Bielski* Economist – Poland [email protected] 48-22-534-1888
Marcela Bensión* Economist – Uruguay [email protected] 598-1747-6805
Fixed Income Research Juan Arranz* Chief Rates & FX Strategist – Argentina& FX
Strategist – Argentina [email protected] 5411-4341-1065
Mauricio Oreng* Senior Economist/Strategist – Brazil [email protected] 5511-3553-5404 Juan Pablo Cabrera* Chief Rates & FX Strategist – Chile [email protected] 562-2320-3778
Equity Research Miguel Machado* Head Equity Research Americas [email protected] 5255 5269 2228
Alan Alanis* Head, Mexico [email protected] 5552-5269-2103 Andres Soto Head, Andean [email protected] 212-407-0976 Claudia Benavente* Head, Chile [email protected] 562-2336-3361
Walter Chiarvesio* Head, Argentina [email protected] 5411-4341-1564 Daniel Gewehr* Head, Brazil [email protected] 5511-3012-5787
Electronic
Bloomberg SIEQ <GO> Reuters Pages SISEMA through SISEMZ
This report has been prepared by Santander Investment Securities Inc. ("SIS"; SIS is a subsidiary of Santander Holdings USA, Inc. which is wholly owned by Banco Santander, S.A. "Santander"), on behalf of itself and its affiliates (collectively, Grupo Santander) and is provided for information purposes only. This document must not be considered as an offer to sell or a solicitation of an offer to buy any relevant securities (i.e., securities mentioned herein or of the same issuer and/or options, warrants, or rights with respect to or interests in any such securities). Any decision by the recipient to buy or to sell should be based on publicly available information on the related security and, where appropriate, should take into account the content of the related prospectus filed with and available from the entity governing the related market and the company issuing the security. This report is issued in Spain by Santander Investment Bolsa, Sociedad de Valores, S.A. (“Santander Investment Bolsa”), and in the United Kingdom by Banco Santander, S.A., London Branch. Santander London is authorized by the Bank of Spain. This report is not being issued to private customers. SIS, Santander London and Santander Investment Bolsa are members of Grupo Santander.
Contact/Important Disclosures
ANALYST CERTIFICATION: The following analysts hereby certify that their views about the companies and their securities discussed in this report are accurately expressed, that their recommendations reflect solely and exclusively their personal opinions, and that such opinions were prepared in an independent and autonomous manner, including as regards the institution to which they are linked, and that they have not received and will not receive direct or indirect compensation in exchange for expressing specific recommendations or views in this report, since their compensation and the compensation system applying to Grupo Santander and any of its affiliates is not pegged to the pricing of any of the securities issued by the companies evaluated in the report, or to the income arising from the businesses and financial transactions carried out by Grupo Santander and any of its affiliates: Ana Paula Vescovi*.
*Employed by a non-US affiliate of Santander Investment Securities Inc. and not registered/qualified as a research analyst under FINRA rules, and is not an associated person of the member firm, and, therefore, may not be subject to the FINRA Rule 2242 and Incorporated NYSE Rule 472 restrictions on communications with a subject company, public appearances, and trading securities held by a research analyst account.
Within the past 12 months, Grupo Santander has managed or co-managed a public offering of securities of Eletrobras.
Within the past 12 months, Grupo Santander has received compensation for investment banking services from Eletrobras.
Santander or its affiliates and the securities investment clubs, portfolios and funds managed by them do not have any direct or indirect ownership interest equal to or higher than one percent (1%) of the capital stock of any of the companies whose securities were evaluated in this report and are not involved in the acquisition, disposal and intermediation of such securities on the market.
The information contained herein has been compiled from sources believed to be reliable, but, although all reasonable care has been taken to ensure that the information contained herein is not untrue or misleading, we make no representation that it is accurate or complete and it should not be relied upon as such. All opinions and estimates included herein constitute our judgment as at the date of this report and are subject to change without notice.
From time to time, Grupo Santander and/or any of its officers or directors may have a long or short position in, or otherwise be directly or indirectly interested in, the securities, options, rights or warrants of companies mentioned herein.
Any U.S. recipient of this report (other than a registered broker-dealer or a bank acting in a broker-dealer capacity) that would like to effect any transaction in any security discussed herein should contact and place orders in the United States with SIS, which, without in any way limiting the foregoing, accepts responsibility (solely for purposes of and within the meaning of Rule 15a-6 under the U.S. Securities Exchange Act of 1934) for this report and its dissemination in the United States.
© 2020 by Santander Investment Securities Inc. All Rights Reserved.
Thank You.
Our purpose is to help people and
businesses prosper.
Our culture is based on believing
that everything we do should be: