Brazil’s Gol to increase flights at expanding Viracopos airport

Dow Jones Newswires/Fox Business, 05/24/2013

Gol Linhas Aereas Inteligentes (GOLL4.BR, GOL) said Friday it is seeking to double the number of flights it operates out of Viracopos airport, the privately-controlled airport currently undergoing a sizable expansion.

Gol, Brazil’s second-biggest airline by market share, said in a regulatory filing it is seeking regulatory approval to operate six more flights out of Viracopos airport, located in the city of Campinas about 100 kilometers north of Sao Paulo.

Viracopos was handed over to private operators last year as part of the Brazilian government’s move to increase airport investment, especially ahead of the 2014 World Cup and the 2016 Summer Olympics. The airport, which currently serves as a hub for regional carrier Azul Linhas Aereas Brasileiras, could become Brazil’s biggest airport in about two decades if all the expansions proposed by the government ahead of the handover are carried out.

Read more…

Economics lessons from China and Brazil can teach each other

Katy Barnato – CNBC, 05/23/2013

They may both be “BRICs“, but China and Brazil face opposite problems and should take tips from each other, according to a report by Capital Economics published on Thursday.

“Brazil in essence needs to become more like China, with its investment growth, and China needs to learn from Brazil in how to support consumer spending,” said Capital Economics’ chief emerging markets economist, Neil Shearing, in a pan-EM report.

Growth has slowed in both the EM giants, as the impact of euro zone woes and a sluggish U.S. economy is felt in countries with previously robust economies. However, Shearing said that Brazil’s and China’s difficulties were largely rooted in country-specific, but contrasting, problems.

Read more…

The view toward closer U.S.-Brazil Relations

Julia E. Sweig – Council of Foreign Relations, 05/22/2013

Vice President Joe Biden will visit Brazil, Colombia, and Trinidad and Tobago next week. Don’t assume this American vice president is merely ceremonial: he has a significant domestic portfolio including immigration, guns, and the budget. Nor is his visit one of those bloated good will trips meant to dole out patronage or shore up support for some American foreign venture. Rather, it seems the Obama administration has decided to try and seize a huge, and to date largely missed opportunity related to jobs, energy, and prosperity in Latin America.

Why the sudden awakening? Immigration reform, the President’s top legislative priority this year, and a political must for both parties, has alerted the White House to the potential foreign policy benefit in Latin America, and not just Mexico, of solving a major domestic problem. In fact, the White House and the American public’s disposition to deal with once untouchable domestic politics around immigration, guns, energy, marijuana legalization, and maybe even Cuba, open the door for potential convergence with Latin America. And provide a chance to get beyond the usual ideological battles that too often sap diplomatic energy and patience.

Biden arrives in Brazil five months before President Rousseff’s state visit to the United States and ten years since President Bush and President Lula convened their cabinets for a joint ministerial meeting, their recognition of the strategic potential for the two democracies and their economies. Since then, dozens, if not hundreds, of ministerial and sub-ministerial meetings have followed. And we have stitched together dozens of inter-governmental dialogues, initiatives, defense, business, scientific, and educational exchanges. Yet there is still something missing between the two powers—call it a lack of ambition.

Read more…

Despite stumbles, a promising path for start-ups in Brazil

Vinod Sreeharsha – The New York Times, 05/21/2013

Brazil’s Internet start-ups were once the darlings of emerging markets, attracting venture capitalists from around the world. But after two-plus years of growth, the sector is facing tougher times.

Numerous young companies, even those with prominent investors, are struggling to show sustainable profitability despite early rapid growth in revenue. A case in point: Shoes4You, an e-commerce site selling designer footwear, decided to close down last month, despite being backed by the prominent United States investment firms Redpoint Ventures, Accel Partners and Flybridge Capital Partners.

Many in the industry consider its failure a harbinger of things to come. “I expect a lot of shut-downs, and that a lot of companies will be firing people,” said one of the site’s backers, Fabrice Grinda, a prominent French angel investor.

Read more…

Brazil’s Petrobras not facing cash flow difficulties – president

Fox Business/Dow Jones Newswires, 05/22/2013

Brazil’s state-run oil company Petrobras (PBR, PETR4.BR) remains well financed and isn’t facing cash flow difficulties as suggested by some market rumors, its president said Wednesday.

Responding to questions from lawmakers on a Brazilian congressional committee, Petrobras President Graca Foster said company initiatives to raise cash didn’t indicate it was undergoing problems.

“Petrobras has a cash reserve of $20 billion,” she said. “This information isn’t correct.”

Read more…

Despite risks, Brazil courts the millisecond investor

Dan Horch, Nathaniel Popper – The New York Times, 05/22/2013

At a time when the mere phrase “high-frequency trading” makes some investors queasy, Brazil’s stock exchange is putting out the digital welcome mat.

In recent years, the BM&F Bovespa stock exchange in São Paulo has taken steps to make its market more friendly to high-speed traders, even as many regulators around the world are casting an increasingly skeptical eye on the sector after a series of well-publicized market malfunctions in the United States.

Lawmakers in Canada, Australia and the European Union have been looking at imposing limits on such traders, whose investment time horizons are measured in milliseconds rather than months.

Read more…

Chart of the week: Brazil’s foundations, undermined

Jonathan Wheatley – Financial Times, 04/22/2013

Brazil’s central bank is in tightening mode again, raising its policy interest rate last week after a long cycle of loosening that began in August 2011. It is worried that inflation is on the rise and less worried, apparently, about slow growth.

But behind recent numbers on inflation is another set of numbers on retail sales, which fell in February for the first time in a decade. If that turns into a trend, the very foundations of Brazil’s recent growth story will be undermined. Chart of the week takes a look.

The blue line on the chart below shows retail sales by volume, seasonally adjusted. As you can see, they have been rising almost without interruption for the past decade, undeterred by the global crisis of 2008-09 that sent so many markets around the world into a tailspin. More so even than global demand for Brazil’s abundant export commodities, it is domestic consumer demand that has underpinned Brazilian growth for the past several years.

Read more…

Brazil’s richest woman, owner of the famous Havaianas brand, dies at 100

Anderson Antunes – Forbes, 04/21/2013

Dirce Navarro de Camargo,Brazil‘s richest woman, died at home this Saturday at the age of 100. The information of Camargo’s passing was first reported by Folha de São Paulo newspaper, and confirmed by Forbes Brasil. No more details on the cause or circumstances of Camargo’s death have been released.

Camargo appeared in Forbes’World’s Billionaires list last March as the 87th richest person in the world, the 4th richest person in Brazil and the country’s richest woman, with a net worth estimated at $11.5 billion. She was also the world’s oldest billionaire.

The bulk of Camargo’s fortune comes from her stake in Camargo Correa, a Brazilian private conglomerate founded by her late husband, Forbes’ “original billionaire” Sebastião Camargo, in 1939. The company, which is present in more than 20 countries and employs over 60,000 people worldwide, has operations in cement, energy and construction. It also controls São Paulo Alpargatas SA, which manufactures the world famous Havaianas flip-flops.

Read more…

Brazil: The creaking champions

Joe Leahy – Financial Times, 04/21/2013

In 2010, when 60 Minutes came to Brazil to do a piece on the “World’s Next Economic Superpower”, the US television programme chose Eike Batista as the ambassador for the country.

“You know, in the last 16 years, Brazil has put its act together. This is it. Hello, time for Americans to wake up,” Mr Batista said with trademark brashness.

In retrospect, the discovery by primetime TV of Brazil’s economy should itself have been a sell signal for investors that a long boom in Latin America’s biggest economy, fuelled by high commodity prices and credit, was peaking.

Read more…

 

OGX penniless by 2014 triggers Batista cash hunt: Brazil credit

Rodrigo Orihuela, Boris Korby – Bloomberg, 02/25/2013

Bondholders are increasing pressure on Brazilian billionaire Eike Batista to raise outside money for his oil producer, pushing up borrowing costs to levels associated with companies on the verge of collapse.

After surging to more than 11.6 percent last week, yields on $2.56 billion of notes due 2018 issued by OGX Petroleo & Gas Participacoes SA ended Feb. 22 at 11.06 percent following a report by Sao Paulo-based newspaper Valor Economico that Batista is in talks to sell a stake in OGX to Malaysia’s state energy company. Company officials declined to comment on the report.

OGX’s cash hoard dropped 23 percent in the six months through September to 5.1 billion reais ($2.56 billion) as subpar production at its first two oil wells put output goals out of reach. Bonds of OGX, which will run out of cash in less than two years at its current burn rate, have suffered even after Batista said in October that he would pump $1 billion of his own money into the company that he founded in 2007.

Read more…