No Growth, No Problem For Brazil Investors As Market Beats World

July 24, 2014

Kenneth Rapoza – Forbes, 7/22/2014

Slow growth, protests, and a humiliating defeat against the Germans in the World Cup earlier this month hasn’t soured investor sentiment on Brazilian equities. Over the last four weeks, Brazil’s stock market as measured by the MSCI Brazil index has beat out the MSCI World and the S&P 500.

The same can be told when looked at three months out, with the iShares MSCI Brazil (EWZ) exchange traded fund up 8.9%, beating the MSCI World and the MSCI Emerging Markets Index.

Who cares if GDP is expected to come in under 2% again this year, or that a hotly contested election is just three short months away. Brazil is the cheapest market in Latin America.

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Emerging-Market Equities Post Weekly Advance as Brazil Rallies

July 18, 2014

Julia Leite and Natasha Doff – Bloomberg Businessweek, 7/18/2014

Emerging-market stocks posted a weekly gain as oil producer Petroleo Brasileiro SA led a rally in Brazil on speculation a new president will revive growth in Latin America’s largest economy, offsetting declines in Russia.

The Ibovespa surged the most among the world’s biggest equity benchmarks as a poll showed President Dilma Rousseff’s lead narrowing in the October election. Chinese stocks rallied amid speculation more cities will loosen property curbs as home prices slump. The S&P BSE Sensex Index increased for a fourth day as Indian software stocks advanced. The Micex Index (INDEXCF) slid to a seven-week low in Moscow, with natural-gas producer OAO Gazprom posting its longest losing streak on record.

The iShares MSCI Emerging Markets ETF (EEM:US) increased 1.6 percent to $44.16, pushing its gain this week to 0.6 percent. The second-biggest exchange-traded fund that holds developing-country stocks sank 1.9 percent yesterday amid concern the shooting down of a Malaysian jet in Ukraine would escalate tensions in eastern Europe.

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China, Brazil close plane, finance, infrastructure deals

July 18, 2014

Anthony Boadle and Alonso Soto – Reuters, 7/17/2014

China and Brazil sealed their expanding commercial partnership on Thursday with a $5 billion credit line for Brazilian miner Vale and the purchase of 60 passenger jets from Brazilian planemaker Embraer.

In a raft of energy, finance and industry accords signed before presidents Xi Jinping and Dilma Rousseff, the two nations agreed to join forces to build railways to help Brazil cut its infrastructure deficit and feed China’s appetite for commodities.

Trade between China and Brazil soared to $83.3 billion last year from $3.2 billion in 2002, with iron ore, soy and oil making up the bulk of Brazilian exports, making China the South American nation’s biggest trade partner.

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China Focus: China, Brazil: friends beyond football

July 15, 2014

Shanghai Daily, 7/15/2014

During the World Cup, employees of the Brazil plant of Chinese car maker Chery were given time off for every match of the Brazilian team.

The games became a “happy-hour”; a time for Chinese and Brazilian employees to socialize together.

Chery has been operating in Brazil since 2009, a recent chapter in cooperation stretching back to the early 19th century, when Chinese tea growers took their skills to Brazil.

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Brazil, Russia aim to double bilateral trade

July 15, 2014

EFE – Fox News Latino, 7/14/2014

Brazilian President Dilma Rousseff and her Russian counterpart, Vladimir Putin, confirmed here Monday their goal of doubling bilateral trade to $10 billion a year.

Rousseff received Putin in Brasilia the day after both attended in Rio de Janeiro the final of the World Cup, which in 2018 will be organized by Russia.

The meeting was previous to the 6th Summit of the BRICS group of emerging or newly industrialized countries, of which Russia and Brazil are members together with India, China and South Africa, and which will be held on Tuesday in the northeastern city of Fortaleza.

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Brazil Aims to Bolster Private Sector

June 19, 2014

Luciana Magalhaes, Paulo Trevisani and Rogerio Jelmayer – The Wall Street Journal, 6/18/2014

With Brazil’s economy slowing and criticism of President Dilma Rousseff rising among business leaders ahead of October’s elections, the government on Wednesday unveiled measures aimed at bolstering the private sector.

Brazil’s Finance Minister Guido Mantega said the government will make permanent a tax-credit program for exporters. It will also extend another business credit program valued at 80 billion reais ($36 billion) a year which was set to expire at the end of 2014. The budget for the extension is yet to be decided, he added. “The new measures will increase competitiveness,” Mr. Mantega told reporters in Brasilia.

Congress must still approve the measures. Mr. Mantega said more details would be revealed Friday.

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FACT SHEET: The U.S.-Brazil Bilateral Relationship

June 18, 2014

The White House, 6/17/2014

Vice President Biden traveled to Brazil to attend the first United States World Cup game and to meet with President Dilma Rousseff and Vice-President Michel Temer to discuss our countries’ broad and multifaceted bilateral relationship.

Growing Economic Cooperation

The United States and Brazil engage regularly in a number of formal dialogues and working groups on economic issues.  These consultations are contributing to two-way goods and services trade that exceeded $100 billion in 2013.  The United States has foreign direct investment in Brazil totaling roughly $80 billion and Brazilian foreign direct investment in the United States is rising, reaching approximately $14 billion in 2012.

The U.S. Secretary of the Treasury recently visited Brazil for discussions on bilateral and global economic and financial issues, reflecting the two countries’ increasingly shared stake in promoting strong, sustainable, and balanced global economic growth and job creation.  In May, the U.S. Secretary of Transportation visited Brazil to meet with Brazilian counterparts on land, air, and waterway transportation cooperation that can facilitate trade and travel.  The continued exchange of high-level official delegations underscores the two countries’ commitment to building a mutually-beneficial economic partnership.

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COLUMN-The score on Brazil as a long-term investment

June 16, 2014

John Wasik – Reuters, 6/16/2014

The beginning rounds of the World Cup have offered thrills to global soccer fans. But what should excite investors about Brazil?

The South American country is brimming with natural resources and growth possibilities. Despite concerns about its growth slowdown and its preparations for the upcoming Olympics, the country can be a good holding if global population growth remains on course.

There are more than a dozen exchange-traded funds (ETFs) that hold Brazilian stocks exclusively. They vary from broad-based index funds to specialized ETFs that use leverage to amplify market moves.

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UBS Pursuit of Brazil High-Frequency Trading Makes It No. 1

June 16, 2014

Christiane Lucchesi – Bloomberg, 6/15/2014

UBS AG (UBSN)’s bet on high-frequency trading helped it overtake Swiss rival Credit Suisse Group AG in Brazil’s equity markets for the first time.

High-speed trading is the only part of Brazil’s stock market that’s growing, as fees, trading volume and new-share offerings decline. Before UBS bought Sao Paulo-based Link Investimentos last year, giving it the fastest-growing brokerage in the country, Credit Suisse dominated trading since at least 2007, according to BM&FBovespa SA (BVMF3) rankings through May.

Barclays Plc and Deutsche Bank AG are among companies that have scaled back their equity teams in Brazil in response to the decline in underwriting revenue and trading volume. Trading this year will be even lower than usual due to the World Cup soccer tournament, according to Edemir Pinto, CEO for BM&FBovespa.

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Since FIFA Kick-Off, Brazil Stocks Beat The World

June 16, 2014

Kenneth Rapoza – Forbes, 6/16/2014

Since the June 6th kick-off of the FIFA World Cup in Brazil on June 6, Brazilian equities have beaten the world.

Sign of things to come in the FIFA finals on July 13 in Rio de Janeiro?  That’s the majority consensus out there now, at least on the soccer field. But in equities, Brazil is on a tear and one wonders why it took so long for investors to realize the World Cup was coming to Brazil.

While some of this could be retail investors buying on momentum, long term investors have been saying that next year will be a good one for emerging markets. And that includes Brazil.

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