3 Reasons Why Brazil’s State-Controlled Oil Giant Petrobras Should Be Privatized

November 21, 2014

Anderson Antunes – Forbes, 11/20/2014

One of the most famous songs by the late Brazilian rock star and songwriter Raul Seixas is entitled ‘Rent,’ in reference to what he considered to be the best solution for Brazil: literally, to rent the country for foreigners. The song was composed in 1980, at a time when Brazil was going through a difficult economic period marked by hyperinflation.

Fast-forward to 2014. Today the ghost of price increases gone out of control has come back to haunt Brazilians, partly due to a government-sponsored rise in fuel prices that resulted in consumer prices advancing 6.54% in the 12 months through mid-November, down from a rise of 6.62% through the previous month but still above the 6.5% ceiling of Brazil’s Central Bank target, according to the median of 22 market forecasts for the IPCA-15 inflation index.

Add to that a total lack of confidence from investors, a growing budget deficit, falling industrial production and rising poverty. Even the stability of the Brazilian job market, one of the few bright spots for the government, has begun to show signs of difficulties ahead: For the first time since October 1999 the weekly payroll numbers showed a net loss of 30,000 jobs last month, well below the market expectations of a gain of 56,000.

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Brazil’s Silva winning over investors in presidential race

August 28, 2014

Walter Brandimarte – Reuters, 8/27/2014

Investors are warming up to a possible victory by Marina Silva in Brazil’s presidential election as the popular environmentalist emerges as their best shot at avoiding four more years of a government they strongly dislike.

Disdain for President Dilma Rousseff’s leftist policies runs so deep in Brazilian financial markets that one comment making the rounds there says: “Marina is like Russian roulette, but Dilma is like a fully-loaded revolver.”

It captures the mistrust that many investors feel toward Silva, whose history of volatile decisions, lack of executive experience and emphasis on eco-friendly policies, even at the possible expense of economic growth, have all raised red flags.

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Brazil-Ethiopia- Djibouti-South Sudan investment seminar going on

June 7, 2013

Zeryhun Kassa – All Africa, 06/06/2013

The first ever two-day Brazil-Ethiopia-Djibouti-South Sudan Trade and Investment Seminar opened on 6 June 2013 in Addis Ababa. Organized by the Embassy of Brazil in Ethiopia, the Seminar aims to provide an opportunity for business and investment networking between governments and companies from Brazil, Ethiopia, Djibouti and South Sudan.

It also aims to encourage strategic information-sharing on potential investment opportunities and available incentives, market potential and trade flows between entrepreneurs and policy makers of the four countries.

Those attending from Ethiopia include officials of the Ethiopian Ministries of Trade, Industry, Foreign Affairs and Agriculture, and representatives of the Ethiopian Sugar Corporation, and private businesses among others.

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Wasn’t a weaker currency supposed to help Brazil?

June 4, 2013

Kenneth Rapoza – Forbes, 06/03/2013

When the Brazilian real was strengthening like gangbusters against the dollar, all the way to R$1.55 back in July of 2008, the government both loved it and hated it.

They loved it because it meant the world loved Brazil and Brazil, with its nagging (and misplaced) inferiority complex, was mighty proud of its strong currency.  Fast forward to the Lehman Brothersand pending fall out in late 2008-09 and the strong currency became a curse. It became part of the “currency war”, a term made quite popular over the last two years by Brazilian Finance Minister Guido Mantega.

The Fed and European Central Bank were weakening their currencies.  Investors were looking for yield were finding it in places like Brazil. Money poured in. The real kept gaining on the dollar and euro.  Mantega and big businesses complained.  They couldn’t be competitive at R$1.70. They needed R$2.00 to $1, everyone was told.

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Brazil’s booming beauty market draws investors

February 13, 2013

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

February 8, 2013

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

February 5, 2013

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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