Brazil’s booming beauty market draws investors

Juliana Barbassa – Huffington Post, 02/13/2013

RIO DE JANEIRO — Looking good has always been serious business in Brazil. Now it’s big business, too.

A flush new middle class and a population strong on working adults is dropping major cash on designer shampoos, lotions and cosmetics, rapidly turning this country into a beauty industry powerhouse.

Sales of beauty products in Brazil hit $43 billion in 2011, a growth of 142 percent in five years that puts it on a pace to overtake Japan as the world’s second-largest beauty market within a few years, according to Euromonitor, a global market research company. At the same time, Japan’s beauty market grew by 40 percent and the United States’ by 7.3 percent.

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Brazil may be next health-care frontier for global investors

Fox Business/Dow Jones, 02/08/2013

According to the country’s census bureau, a decade of steady economic growth has lifted some 35 million Brazilians into a broad new middle class, a cohort now equal to about half Brazil’s total population of nearly 200 million souls.

“With the rise of the middle class, there is more demand for services, including health-care services,” said Humberto Selecetti, a KPMG consulting group partner. “Many international health-care companies are seeing only mediocre returns in their home markets, so they’re opting for investments in countries with greater potential. Brazil is one of these.”

According to Mr. Selecetti, only 23% of Brazilians currently have private health coverage of some kind, compared with 77% in the U.S. and 60% in Mexico.

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Brazil Oil Giant Petrobras Blames Dollar For Collapse

Kenneth Rapoza – Forbes, 02/05/2013

Where’s is Glenn Beck‘s wacky George Soros/Petrobras conspiracy theory now? How about in the trash can, lit on fire, and burning to ashes. Brazil`s largest oil company has been an awful investment pick even for savvy Soros. And it’s not about to rise like a Phoenix from the ashes anytime soon.

Brazil’s Petrobras (PBR) is on its way to $16 a share and one of the reasons that the star of the economy has lost its shine is…the dollar. If you believe their corporate executives that is.

This has been the year that was for Petrobras’s relatively new CEO Maria Graça Foster. The market cap of Petrobras has shed billions since she took over from what many Petrobras watchers say is nothing more than a policy instrument for Brasilia to funnel money to pet projects, rather than an actual oil company drilling below sand and rock salt in the Atlantic Ocean.

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Brazil’s conundrum: the strong weak economy

Kenneth Rapoza – Forbes, 02/01/2013

If it makes any sense, Brazil`s  economy is the mirror opposite of the United States right now.  Unemployment in the U.S. is rising, and so is the market. The economy is slowly recovering from its worst financial crisis since the Great Depression.

In Brazil, unemployment is shrinking and the stock market is in decline. The economy that was supposed to grow over 4 percent in 2012, grew by maybe 1 percent. This year, it’ll probably grow by 2 percent.

Even as the economy remains weak, the currency is starting to strengthen, going from a weakness of over two to the dollar to around 1.99 Brazilian reals to the dollar on Friday.  It’s new trading rage, says Marcelo Salomon of Barclays Capital, is now 1.95 to 2.05 rather than 2.05 to 2.10.

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Mess at Brazil’s Cruzeiro riles investors

Paul Kilby – Reuters, 8/17/2012

The move has left much of the buyside up in arms, feeling they are taking the fall for what they see as poor oversight by the central bank. Cruzeiro is the fourth Brazilian mid-tier bank to go bankrupt in recent years.

“Clients think they have to pay for the lack of work that the central bank should have done,” noted one US-based trader.

Law firm Bingham McCutchen is trying to organize a critical mass of investors to contest a tender offer for some US$1.6bn in outstanding dollar bonds. The tender is conditional on participation from local and international creditors holding at least 90% of the principal amount, so Bingham is said to be trying to get 10%-plus on board to gain some leverage against the FGC proposal.

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Consumption-led growth reaches its limits in Brazil

Reuters, 6/10/12

For many Brazilian executives, it was a day from hell. Last Friday, Brazil’s statistics agency published data showing the economy grew just 0.2 percent from January to March, marking a third consecutive quarter of stagnation – a shock for a country that only recently was booming.

Later in the day, São Paulo was brought to its knees by what city authorities described as its worst-ever traffic jam, with more than 295km of clogged roadways snaking through Brazil’s business capital and some furious commuters needing more than four hours to get home.

The symbolism was inescapable: Brazil has done a superb job of building and selling cars in recent years, but failed to build enough roads to accommodate them. Similarly, the economy as a whole has depended too much on stoking consumer demand and not enough on increasing supply by way of investment, resulting in terrible bottlenecks that have left Brazil at a standstill.

Some of Brazil’s top business leaders, speaking at a Reuters Latin America Investment Summit, said the demand-led model had probably run its course. They said that for Brazil to break out of its current logjam of annual growth rates below 3 percent, President Dilma Rousseff’s government would have to take bolder – and more difficult – steps to improve infrastructure and create a better investment climate.

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Brazil: investing to win

Stephanie Flanders – BBC News, 06/30/2011

It’s not often you get to stand on the very spot where the next World Cup will begin – you can see me doing just that in my latest report from Brazil. Fingers crossed, the first game of the 2014 World Cup will kick off from the mountain of earth that is set to become the Corinthians’ new stadium in Sao Paulo.

It sounds like a story we’ve heard many times before: country wins chance to host World Cup, then world spends years worrying whether said country will be ready in time. If I had to bet, I’d reckon Brazil would pull it off at the last minute, at vast expense, just like any other World Cup host you can remember.

But there is a larger prize to be won for Brazil, because some of the key issues they have to grapple with in hosting a successful World Cup – not to mention the Rio Olympics in 2016 – are the same ones that have been hurting the economy for years.

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Peru’s president-elect: want to use Brazil as an example

Rogerio Jelmayer – Dow Jones Newswire/WSJ, 06/13/2011

Peru President-elect Ollanta Humala on Friday said that his country has made good economic progress, but needs more social inclusion, and Brazil can be a good example.

“The Peruvian economy is very solid and we need to move to a second step which is social inclusion, and we want to use Brazil as an example which has already had plenty of success in this respect,” Humala told reporters after a meeting with Brazil’s former president, Luiz Inacio Lula da Silva.

Speaking alongside Humala, Lula said that “the easiest thing and the one which costs the government the least is to help the poor.”

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Mubadala sets its sights on Brazil

Asa Fitch – The National, 05/02/2011

Mubadala Development is studying several possible investments in Brazil as its strategy shifts towards emerging markets.

Any investments in Brazil’s energy, aluminium, aerospace and agriculture sectors would be the first in Latin America for Mubadala, a strategic investment company owned by the Abu Dhabi Government.

Waleed al Muhairi, the company’s chief operating officer, travelled with a delegation to Brazil last week to discuss Mubadala’s plans there.

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Investors can prosper from Brazil infrastructure boom

Reuters, 08/31/2010

Brazil’s infrastructure boom is creating investment opportunities in transportation and housing, industry executives and analysts said on Tuesday, although high demand for industry stocks is leaving some listed companies overvalued.

Medium-size companies involved in energy equipment that can benefit from state oil company Petrobras’ $224 billion, five year investment plan or the government’s low-income housing crusade can provide attractive returns, said Silvio Camargo, head of equity research for Fiducia Asset Management, at an industry seminar.

Rodrigo Fonseca, who helps manage $835 million in assets for Rio de Janeiro-based Pollux Capital, recommended scaffolding and equipment rental firm Mills Engenharia (MILS3.SA), which he said it slated to benefit from growth of sectors ranging from construction to the oil and gas industry.

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