March 10, 2014
Matthew Malinowski – Bloomberg, 3/10/2014
Brazil economists cut their 2014 key interest rate forecast for the second straight week, as 350 basis points in borrowing cost increases since last year threaten to undermine growth.
Brazil’s central bank will lift the benchmark Selic to 11 percent this year, compared with analysts’ estimates of 11.13 percent last week and 11.25 percent two weeks ago, according to the March 7 central bank survey of about 100 economists published today.
President Dilma Rousseff’s administration is combating prospects of faster inflation and slower growth. While the economy expanded more than analysts’ estimates in the fourth quarter, both consumer and industrial confidence remain low. The central bank on Feb. 26 halved the pace of key rate increases as factors including a weaker real pressure consumer prices even as demand remains uneven.
March 10, 2014
Jack Bell – The New York Times, 3/9/2014
The star-crossed stadium in the rain forest was given its first official run-through on Sunday in Manaus, Brazil, with a quarterfinal match in a regional championship.
The Arena da Amazônia was the site of an accident last month in which a worker was killed when a crane collapsed. It is one of 12 venues that will be used for the World Cup, which begins in June. The accident in February once again shined an uncomfortable light on Brazil’s stuttering preparations for the tournament. The stadium was one of six that were not completed by the end of 2013, as had been required by FIFA.
According to The Associated Press, the stadium cost nearly $290 million, about $70 million more than originally expected. Three workers died during construction, including the Portuguese man who was killed while a crane that had been used to construct the stadium roof was being disassembled.
March 4, 2014
Louie Grint – Daily Finance, 3/3/2014
Adding to the uncertainty that most emerging markets are experiencing, a local event is stirring up volatility in Brazilian stocks. Presidential and legislature elections will take place in the country in October, and three candidates have real chances of taking office. The favorite is current President Dilma Rousseff, who is running for re-election, and then we have Aecio Neves and Eduardo Campos.
How does this matter to Brazilian ADRs?
A key point here is the degree of government intervention. Investors sense that if President Dilma Rousseff is re-elected, government intervention will continue, damaging companies’ profitability level. The other two candidates are seen as more market-friendly, and they still have a chance, especially with the current slowdown in the economy. So let’s see how three ADRs are performing.
First, here’s a Brazilian forestry leader and the world’s largest producer of hardwood market pulp, Fibria Celulose . It has an annual production capacity of approximately 5.3 million tons.
March 3, 2014
Simon Romero – The New York Times, 2/28/2014
IN his fits of rage, Eduardo Paes, the mayor of Rio de Janeiro, has thrown a stapler at one aide. He threw an ashtray at another. He berated a councilwoman in her chambers, calling her a tramp. Stunning diners at a crowded Japanese restaurant where he was being taunted by one constituent, a singer in a rock band, he punched the man in the face.
While Mr. Paes, 44, has apologized to the targets of his wrath after each episode, he adds that he is under a lot of stress. Normally clocking 15-hour days as he tears up and rebuilds parts of Rio in the most far-reaching overhaul of the city in decades, Mr. Paes is finding that consensus over his plans is elusive.
“Don’t ever in your life do a World Cup and the Olympic Games at the same time,” Mr. Paes recently said at a debate here on Rio’s transformation, making at a stab at gallows humor over the street protests that have seized the city over the past year. “This will make your life almost impossible.”
February 27, 2014
Brian Winter – Reuters, 2/27/2014
Brazil’s economy ended 2013 on a positive note thanks to strong consumer spending and investment, providing a much-needed boost to President Dilma Rousseff as she tries to rebuild her credibility with investors and win reelection in October.
Gross domestic product expanded 0.7 percent in the fourth quarter compared to the third quarter, the government statistics institute said on Thursday. That was more than twice the amount expected by economists, and it pushed the economy to 2.3 percent growth on an annual basis for the full year of 2013.
Such growth is a far cry from the dynamic 4 to 5 percent annual levels often seen last decade, when Chinese demand for commodities helped make Brazil a star among emerging markets. Poor infrastructure, high consumer debt and sagging businessconfidence have brought Latin America’s biggest economy back to earth since then, prompting fears of a long period of stagnant growth ahead, possibly for years to come.
February 27, 2014
David Biller – Bloomberg, 2/27/2014
Brazil’s economy grew in the fourth quarter more than economists forecast as an increase in investment offset a drop in industrial production.
Brazil’s gross domestic product rose 0.7 percent in the fourth quarter from the prior three months after contracting 0.5 percent in the third quarter, the national statistics agency said today in Rio de Janeiro. That is above every forecast from 49 analysts surveyed by Bloomberg, whose median estimate was for 0.3 percent growth. Brazil’s GDP expanded 2.3 percent in 2013.
Today’s data will help boost lagging confidence in the world’s second-biggest emerging market, according to Jankiel Santos, chief economist at Banco Espirito Santo de Investimento. PresidentDilma Rousseff has overseen the slowest three-year growth period in a decade, with above-target inflation eroding consumer and business confidence. Policy makers led by central bank President Alexandre Tombini halved the pace of key rate increases yesterday as they work to tame inflation without further jeopardizing growth.
February 25, 2014
Joe Leahy – The Financial Times, 2/24/2014
For weeks workers at São Paulo’s Itaquerao stadium have been clearing up the damage from a deadly construction accident in November. A giant roof girder crashed through a wall of the unfinished 68,000-seat arena, killing two labourers and casting a pall over Brazil’s preparations for this year’s football World Cup.
“People working in there say it won’t be ready in time for the World Cup,” says Paulo Arminio, who sells snacks to construction workers from a van outside the venue and who witnessed the accident.
The government and Fifa, football’s global governing body, insist the stadium will be ready for the world’s most popular sporting event, which begins in June.
February 25, 2014
Jan D. Walter -Deutsche Welle, 2/25/2014
The initial conversation between Brazil’s President Dilma Rousseff, European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso apparently went well. After their first meeting on Monday (24.02.2014), Rousseff told reporters, “For the first time, we’re close to an agreement.”
She was referring to negotiations on a shared free trade deal sought by both sides for years. But there are more than just import and export considerations at stake. Both delegations announced talks would take place about financing an internet cable to run directly between Europe and Brazil.
Taken as a whole, the EU is Brazil’s biggest trade partner – ahead of even China and the US. But Brazil’s once positive trade balance with the EU has recently tumbled from a surplus of $3.3 billion (2.4 billion euros) in 2011 to a deficit of $7.1 billion in 2013. Additionally, trade volume over 2012 to 2013 sank from $37.4 billion to $33 billion.
February 24, 2014
Rogerio Jelmayer – The Wall Street Journal, 2/23/2014
Brazil’s President Dilma Rousseff remains the favorite to win re-election in October with a comfortable lead over possible contenders, according to a poll published Sunday.
The Datafolha polling institute said Ms. Rousseff has recovered much of the support she had lost in the wake of mass street protests in the middle of last year.
Millions of Brazilians demonstrated in cities across the country of 200 million people. They had many complaints, but most were focused on perceived corruption and on the poor quality of public services, such as health care and education.