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

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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Brazil election jitters may hit investment in 2014

Alonso Soto & Luciana Otoni – Reuters, 4/8/2014

Brazil’s presidential vote will likely delay some investment decisions this year but spending on infrastructure is expected to remain strong, a senior government official told Reuters on Tuesday.

Although President Dilma Rousseff is the favorite to win the October 5 general election, many investors could withhold funds until the next government outlines its plans for the following four years, which could hamper the country’s already slow economic growth.

“It is obvious that businesses will delay some investments until after the election to have more clarity,” said the official, who asked not to be named because he is not allowed to speak publicly.

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Real falls as fed concern joins Brazil deficit in damping demand

Gabrielle Coppola – Bloomberg, 11/25/2013

Brazil’s real declined on speculation the Federal Reserve will curtail monetary stimulus amid concern the government’s deteriorating finances will lead to a reduced credit rating.

The currency depreciated 0.1 percent to 2.2826 per U.S. dollar at 10:09 a.m. in Sao Paulo after rising 1.5 percent last week, its first weekly gain since Oct. 18. Swap rates on the contracts due in January 2015 fell one basis point, or 0.01 percentage point, to 10.86 percent.

“The dollar’s recovery is tied to the possibility that the Fed may reduce stimulus,” Joao Paulo de Gracia Correa, currency manager at Correparti Corretora de Cambio, said in a telephone interview from Curitiba, Brazil.

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A welfare check under fire in Brazil

Stephen Kurczy – The Christian Science Monitor, 11/17/2013

Eliane Antunes doesn’t expect her grandchildren to walk through gunfire. But in Maré, a shantytown abutting Rio de Janeiro’s international airport, their walk to school passes through a war zone between rival drug gangs.

That puts more than just an education at risk. It can mean that the family won’t receive a welfare check from Bolsa Família, which requires recipient children to have good school attendance.

For Ms. Antunes, it meant her family was suspended from the program for three months.

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Maids winning rights squeezes Brazilian families’ wallets

Joshua Goodman – Bloomberg, 04/08/2013

For millions of maids, the law is a milestone being compared to Brazil’s 19th-century abolition of slavery. For the families that rely on domestics, it’s a budget squeeze that could force them to cook and clean for themselves.

Congress last week approved a constitutional amendment granting domestic servants an 8-hour work day, overtime pay and other rights enjoyed by the rest of the workforce. While hailed by lawmakers as historic, the law is spreading concern among middle and upper-class families that the cost of employing a maid or nanny will spike after almost doubling since 2006.

Daniela Batista, a working mom in Sao Paulo, says she may fire the nanny who has cared for her children for two years to avoid paying the additional 800 reais ($400) a month she says it will now cost her in overtime pay alone. Currently she pays 1,800 reais for 12 hours of service, five days a week, and she may have to hunt for someone who’ll work for less.

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Crime wave hits Sao Paulo, with political effects

Brian Winter – Reuters, 07/26/2012

(Reuters) – Murders and robberies are soaring in Sao Paulo, Brazil’s biggest city and financial capital, in a crime wave that could further hurt the local economy and have national political implications.

Sao Paulo had 622 homicides in the first six months of the year, a 21 percent increase over the same period of 2011, according to government data released this week. Armed robberies grew 8 percent, and are now occurring at the rate of 319 a day in the city of more than 11 million people.

Economists say that crime is a leading factor in the so-called “Brazil cost” – the mix of logistical bottlenecks, high taxes and other costs that make Brazil one of the world’s most expensive places to do business, and have contributed to a sharp economic slowdown over the past year.

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Of the BRICs, Brazil most expensive for business

Sarah de Sainte Croix – Rio Times, 04/10/2012

Of the five high-growth countries studied, Brazil came out as the least competitive, image by KPMG LLP.

Out of the world’s five major high-growth economies – Brazil, China, India, Mexico and Russia – Brazil is ranked the most expensive country to do business in, according to a recent report. The 2012 Competitive Alternatives survey, released by KPMG International, compares locations in more than a hundred cities in fourteen countries around the world.

Of the five high-growth countries studied, Brazil came out as the least competitive by a significant margin, with just a seven percent cost advantage over the United States.

By comparison, the study found China and India to be the most competitive in the group, with overall business costs 25.8 and 25.3 percent below the U.S. baseline respectively.

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Invigorated Rousseff shifts focus to ‘Brazil cost’

Brian Winter – Reuters, 04/02/2012

Standing before reporters on a trip to India last week, Brazil’s generally stern President Dilma Rousseff flashed a wry smile, admitted to jet lag and said: “If I take a nap right here, cut me some slack, OK?”

Humor is not the only new quality she’s displaying lately.

After taking office on the crest of an economic boom that allowed an unhurried approach to reforms, Rousseff is starting to take bold steps to cut Brazil’s notoriously high business costs and taxes, driven by what advisers describe as a new sense of urgency to revive a stagnating economy.

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Brazil’s giant wave

John Paul Rathbone – FT, 03/12/2012

For the past ten years, the Brazilian economy has surfed a giant wave. It has been an exhilarating ride, based on two main factors: the rising prices of Brazilian commodities – which has boosted the external sector; and a boom in domestic consumer credit, which has boosted internal demand (and was sparked, largely, by Lula’s innovation of allowing credit payments to be deducted directly from workplace wages). Now, however, this twin-pronged Brazilian “model” faces its first serious test. That, probably, is why the recent economic slowdown has attracted so much interest.

The European Union and China are Brazil’s two biggest foreign markets. Together, they account for 40 per cent of exports. Now they are slowing. This reduces demand for the real goods that Brazil exports.

At the same time, there is an increasing international supply of nominal assets: these are the inflows of global financial liquidity that have caused the real to rise. The government fears that an ever-stronger real – combined with the infamous “Brazil cost” – will allow competitors to eat domestic manufacturers’ lunch. Brasília is right to worry. For one, a smaller manufacturing sector threatens employment, which would in turn slow domestic credit expansion. One early sign of this can be seen in the Brazilian banks that have reported a rise in delinquent debts and slower loan growth.

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After-hour e-mail ban swells Brazil cost that business laments

Raymond Colitt – Bloomberg, 01/31/2012

Brazilians tired of answering their boss’s after-hours e-mails may be able to charge overtime based on a law businesses see hurting competitiveness in Latin America’s largest economy.

Using portable communications devices is equivalent to working in the office, according to legislation signed by President Dilma Rousseff last month.

The law is one more obstacle companies say they face in Brazil, where regulations mandating everything from employer- provided breakfasts to union contributions are a daily drag on efficiency bemoaned for decades as the “Custo Brasil,” or Brazil Cost. It takes less time to set up a business in Nigeria or Mongolia than it does Brazil, according to the World Bank, which ranked it No. 126 out of 183 countries in its 2012 competitiveness study.

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