Itau sees investment bank revenue rising outside Brazil

Rogerio Jelmayer and Luciana Magalhaes – The Wall Street Journal, 7/01/2015

The investment banking arm of Brazilian financial firm Itau Unibanco Holdings SA said Wednesday it expects its revenue to rise across Latin America outside Brazil.

Last year, Itau BBA, as the investment bank is known, pocketed 70% of its revenue from operations in Brazil and the rest from other Latin American countries.

“In three to five years we see our operations in Latin America representing around 35% of fees,” Jean-Marc Etlin, vice president of Itau BBA, said at a news conference. Itau BBA is preparing to start operations at its brokerage unit in Mexico with 50 employees, Mr. Etlin said. The bank said it expects more capital market activities in Mexico amid the country’s expected economic expansion over the near term.

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Brazil hails long-awaited EU trade breakthrough

Joe Leahy – The Financial Times, 7/01/2015

Mercosur and the EU appear set to exchange formal offers on tariffs by the end of the year, raising hopes that the South American bloc is close to clinching the biggest trade deal in its 24-year history.

Armando Monteiro, the Brazilian trade and industry minister, told the Financial Times in an interview that the exchange of market access offers would mark an important step towards full implementation of the proposed trade deal as early as next year.

The South American bloc and the EU have been engaged in on-off talks on a deal since 1999.

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Japan takes Brazil to WTO over taxes it says favour local firms

Tom Miles – Reuters, 7/02/2015

Japan launched a complaint against Brazil at the World Trade Organization on Thursday to challenge charges and taxes that it says illegally favour Brazilian-made goods over foreign competition, the WTO said in a statement.

Japan says Brazil imposes a higher tax burden on importers and provides export-contingent subsidies, affecting sales of Japanese cars, semiconductors, smartphones, software and other hi-tech and automation products, the WTO said.

Under WTO rules, Brazil has 60 days to settle the complaint. After that Japan could ask the Organization to adjudicate.

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Brazil Federal Police arrest another former Petrobras executive

Rogerio Jelmayer – The Wall Street Journal, 7/02/2015

Brazil’s federal police have arrested another former executive of state-run energy company Petróleo Brasileiro SA, or Petrobras, as part of an investigation into a broader corruption scandal that has wounded the country’s largest company.

Police arrested Jorge Zelada, a former top executive of Petrobras, early Thursday at his home in Rio de Janeiro. Mr. Zelada was arrested on suspicion of corruption and money laundering, said a police spokesman. Mr. Zelada’s lawyer couldn’t be immediately reached for comment.

Mr. Zelada was director of international operations of Petrobras from 2008 to 2012. He replaced Nestor Cerveró, who was convicted in May of money laundering and sentenced to five years in prison for his role in the widening scandal.

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Brazil tries to rebuild relations with U.S. after NSA spying scandal

Jackie Northam – NPR, 6/30/2015

It’s rare that a world leader will cancel a planned state visit to the White House, but that’s what happened two years ago when Brazil’s President Dilma Rousseff found out that the U.S. had been spying on her and her top aides.

The Brazilian leader is now trying to let bygones be bygones, and is in Washington, D.C., to visit with President Obama.

Rousseff’s decision to cancel the state visit — with its formal dinners and high-profile meetings — threw a strong and robust bilateral relationship into disarray, says Eric Farnsworth of the Council of the Americas and Americas Society.

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Brazil’s president seeks investment during U.S. visit

Paulo Trevisani – The Wall Street Journal – 6/29/2015

Brazil’s President Dilma Rousseff said Monday that a more business-friendly environment is needed in Latin America’s largest economy to attract the investment it needs to restore growth.

“We need to reduce the risks of doing business in Brazil,” she said in an interview in New York, as she began a visit to the U.S. aimed at drawing investors and to meet with President Barack Obama in Washington.

Her task is complicated by poor economic conditions at home. Annual inflation is running at 8.8% despite high interest rates, with the benchmark rate at 13.75%. Economists forecast an economic contraction this year. But Ms. Rousseff said Brazil still has strong fundamentals that should attract long-term investors.

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Brazil’s Petrobras slashes 5-year investment budget

Paul Kiernan – The Wall Street Journal, 6/29/2015

Brazilian state-run oil company Petróleo Brasileiro SA said Monday it plans to slash investments by 37% over the next five years in an urgent effort to reduce its soaring debt load.

Petrobras expects capital spending over the 2015-19 period to total $130.3 billion, the company said in a long-delayed document outlining its five-year business plan. Petrobras’ previous five-year plan foresaw investments of $220.6 billion over the 2014-18 period.

The company also increased its goal for asset sales this year and next, saying it now expects to divest $15.1 billion in 2015-16, up from a previous target of $13.7 billion.

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