Brazil to Help Out Pressured Electric Companies

August 12, 2014

Paulo Trevisani and Priscilla Oliveira – The Wall Street Journal, 8/7/2014

Brazil’s government is again offering help to struggling power distributors caught between rising wholesale costs and controlled retail prices.

The Finance Ministry said on Thursday that it is making available 6.6 billion Brazilian reais ($2.9 billion) in credit lines to the sector. The funds will come from private and government-controlled banks.

The fresh money is meant to cover a gap in the power companies’ accounts, as a prolonged drought significantly reduced generation capacity in Brazil’s mainly hydroelectric generated power grid.

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Brazil to help out pressured electric companies

August 8, 2014

Paulo Trevisani & Priscilla Oliveira – The Wall Street Journal, 8/7/2014

Brazil’s government is again offering help to struggling power distributors caught between rising wholesale costs and controlled retail prices.

The Finance Ministry said on Thursday that it is making available 6.6 billion Brazilian reais ($2.9 billion) in credit lines to the sector. The funds will come from private and government-controlled banks.

The fresh money is meant to cover a gap in the power companies’ accounts, as a prolonged drought significantly reduced generation capacity in Brazil’s mainly hydroelectric generated power grid.

Read more…


Brazil’s finance ministry takes issue with S&P downgrade

March 25, 2014

Brazil-U.S. Business Council, 3/25/2014

The Brazilian Finance Ministry, in a statement, was highly critical of Monday’s decision by international credit rating agency Standard & Poor’s to downgrade Brazil’s sovereign rating by one notch to BBB- from BBB. The statement said the downgrade was “inconsistent with Brazilian economic conditions.” S&P said risks to Brazilian debt have grown due to factors such as persistent inflation and deteriorating public accounts. The Finance Ministry said Brazilian accounts were “in order” and noted that Brazil’s government has consistently met primary budget surplus targets over the past decade. The Ministry also argued that Brazil has produced a consistent pattern of economic growth despite unfavorable global conditions in the past five years. The Ministry added, “Brazil is committed to investment as a priority,” noting the development of a sweeping infrastructure concessions program in recent years. Finally, the Ministry noted Brazil’s $378 billion in foreign reserves as a backstop against any international credit risk. Brazil’s credit rating is now at the minimum level for maintenance of “investment grade.” The downgrade will likely result in higher service costs for Brazilian private and public debt. S&P on Monday also downgraded Petrobras and Eletrobras by one notch to BBB-.

Read here. 



Brazil to name Caffarelli as Deputy Finance Minister

February 6, 2014

Rogerio Jelmayer – The Wall Street Journal, 2/6/2014

Brazil’s government is set to name Paulo Rogerio Caffarelli as the No. 2 official at the Finance Ministry as it seeks to improve ties with the business community, according to a person with knowledge of government decisions.

Mr. Caffarelli is currently vice president at Latin America’s largest bank by assets, the government-run Banco do Brasil SA BBAS3.BR +2.13% . He has overseen the bank’s efforts to expand internationally and was also responsible for lending to medium-size and large corporate customers.

Finance Minister Guido Mantega and his team have come in for considerable criticism for their handling of the Brazilian economy, which is entering a fourth year of subpar growth. Inflation remains high and there are concerns that increases in government spending may undermine the country’s investment-grade credit rating.

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Brazil official says country’s recovery will surprise markets

January 24, 2014

Alonso Soto & Luciana Otoni – Reuters, 1/23/2014

Financial markets are underestimating the speed at which the Brazilian economy could recover in a year that should be less volatile than previous ones, a senior government official told Reuters on Thursday.

Marcio Holland, the finance ministry’s secretary of economic policy, said that an uptick in domestic consumption, record grains output and more infrastructure investment should help the economy grow more this year than last.

The U.S.-trained economist, the ministry’s main forecaster, said financial markets are focusing too much on 2013, which was plagued by market volatility amid talk that the Federal Reserve would withdraw U.S. economic stimulus.

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Brazil stocks are cheap after China woes

January 24, 2014

Matt Clinch – CNBC, 1/24/2014

It’s the perfect time for investors to lead the charge back into emerging market Brazil, according to the country’s finance minister, who told CNBC that China growth fears have dragged stock prices down to very attractive levels.

Guido Mantega, Brazil’s finance minister, said the county’s stock market has become strongly dependent on China, with its heavy link to commodities. On Thursday, fresh data showed China’s manufacturing activity contracted for the first time in six months in January. Commodities producers drove the country’s Bovespa stock index down following the news.

“Over the last few weeks we’ve heard not very good news on growth rate for China. China has been giving ambivalent signals. So when they give signals like the one they gave yesterday with PMI that dropped a little, our stock market loses some value as a result,” he told CNBC at the World Economic Forum in Davos.

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