Brazil´s Batista says he wants to do business again

Luciana Magalhaes – The Wall Street Journal, 11/17/2015

After losing about $30 billion in the past few years amid the collapse of his industrial group, embattled Brazilian entrepreneur Eike Batista told a congressional panel Tuesday that he has nearly paid off or renegotiated all his debts and wants to do business again.

“I am not bankrupt,” Mr. Batista told a commission formed to investigate possible irregularities in loans given by Brazil´s development bank, or BNDES, to some large local conglomerates.

BNDES signed agreements to loan Mr. Batista’s firms around 10 billion reais (about $2.62 billion). Mr. Batista paid off some of that debt. The rest was assumed by investors who purchased the businessman’s companies out of bankruptcy. Mr. Batista denied receiving any special favors from the development bank and said he paid the same rates as other borrowers.

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Brazil police conduct new round of raids linked to Petrobras probe

Guillermo Parra-Bernal and Pedro Fonseca – Reuters, 11/16/2015

Brazil’s Federal Police on Monday began a new round of arrests and search and seizure operations in the states of Rio de Janeiro and Bahia related to a corruption probe involving state-controlled oil producer Petróleo Brasileiro SA, police said.

In a statement, the police said officers were making 11 search and seizure orders and looking to arrest two people as part of the 20th round of the so-called “Operation Car Wash” investigation. Another five people are also being searched and will be taken to court in Curitiba, in southern Brazil, where they will be questioned, the statement said.

The seven people are former officials at the company, known as Petrobras, and are under investigation over alleged graft related to contracts for the company’s Abreu e Lima and Pasadena refineries, the statement said.

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Brazil keen to further strengthen trade ties with India

PTI – Economic Times, 11/16/2015

Brazil today called for expanding a trade pact with India by adding more products such as frozen chicken (whole) and processed soyabean in the tariff agreement and also stressed on technology transfer and investment in agriculture research.

Brazil is also keen to export ethanol and milk products to India and boost shipments of edible oils. India and MERCOSUR, comprising Brazil, Argentina, Uruguay and Paraguay, already has a preferential trade pact.

“We would like to expand tariff agreement,” said Katia Abreu, the Brazilian Minister of Agriculture, Livestock and Food Supply.

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Brazilian institutions have responded well to political crisis

Lee Alston – Financial Times, 11/15/2015

Bullish on Brazil — really? The Brazilian currency has fallen more than 30 per cent in a year. Interest rates are at 15 per cent, 9 percentage points of which are gobbled up by inflation. Unemployment is climbing. The economy is shrinking. And if that were not enough, Brazil is also suffering its biggest-ever corruption scandal.

Petrobras, the state-owned energy company, admitted to losses of R$6bn ($1.6bn); the federal police puts the figure far higher. The affair has weakened an already indecisive president. Since her re-election last year, Dilma Rousseff has lost control of her government coalition and of much of her own Workers’ party. Her approval rating has sunk to 8 per cent — lower even than the 9 per cent rating of former president Fernando Collor de Mello just before he left office under duress in 1992. Ms Rousseff may yet face a similar fate; in a move that could presage impeachment, the federal budget watchdog , the TCU, rejected the government’s 2014 accounts.

Brazil’s condition does look bad. Yet some things have turned out better than expected. The government has made a credible move to stabilise markets, appointing as finance minister Joaquim Levy — a no-nonsense fiscal conservative. His aim is to return Brazil to policies that support social inclusion without imperilling public finances. Rumours abound that Henrique Meirelles, former head of the central bank and equally opposed to inflation, may replace Mr Levy. Mr Meirelles may be more effective because he has former president Luiz Inácio Lula da Silva’s blessing. No matter how much Ms Rousseff, her party or their coalition dislike the idea of a painful fiscal adjustment, the view that this is the only way to go has prevailed.

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Brazilian real drops as recession deepens and China trade slumps

Filipe Pacheco – Bloomberg Business, 11/9/2015

The Brazilian real slumped as economists in a central bank survey said the recession is worsening, while a disappointing trade report out of China shows it’s unlikely the Asian nation can help fuel a rebound anytime soon.

The real dropped 0.7 percent to 3.7937 per dollar as of 10:44 a.m. in Sao Paulo. The currency is down 30 percent this year, making it the worst performer among 31 major counterparts to the dollar tracked by Bloomberg.

Economists now forecast Brazil’s economy will shrink 3.1 percent this year and 1.9 percent next year, deeper than the 3.05 percent and 1.51 percent contractions they had estimated a week ago, according to the central bank survey published Monday. Adding to Brazil’s economic woes, Chinese overseas shipments declined 6.9 percent in October in dollar terms, the customs administration said, a bigger decline than estimated by all 31 economists in a Bloomberg survey. China is Brazil’s biggest trading partner.

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Brazil’s Embraer eyes U.S. deals to sell 100-seat regional jets

Robert Wall – The Wall Street Journal, 11/9/2015

Brazilian plane maker Embraer SA is in talks with major U.S. carriers to buy some of its regional jets seating more than 100 passengers, further cementing its position in the world’s largest airliner market.

Embraer, the world’s third-largest plane maker, has already made inroads selling 70-seat version of its so called E-Jets in the U.S., but now is eyeing prospects for the slightly larger models that cost more and yield higher profits.

“There is a huge opportunity for us,” said Paulo César de Souza e Silva, who heads Embraer’s commercial airplane unit.

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Outlook for Brazil getting bleaker – OECD

Financial Times, 11/9/2015

There is little brightness on the horizon for the battered Brazilian economy, which is struggling against a painful recession.

The Organisation for Economic Cooperation and Development (OECD) has further downgraded its expectations for the Brazilian economy both this year and next, with the country’s recession likely to be deeper than originally thought.

The OECD is forecasting that the Brazilian economy will shrink 3.1 per cent this year followed by a further 1.2 per cent contraction in 2016. This is a significant downgrade from the OECD’s last forecast in September, when it predicted the Brazilian economy would shrink by 2.8 per cent this year and by 0.7 per cent in 2016.

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