Dec. 30 (Bloomberg) -- Brazil’s so-called sovereign wealth fund can be used to make purchases of dollars in the spot market, Treasury official Cleber Oliveira said.
Under a decree published yesterday in the official gazette, the fund’s managers will need authorization from the ministries of finance and planning, as well as the central bank, to make the purchases, said Oliveira, an undersecretary of the Treasury in charge of fiscal planning.
Brazil is seeking to have the fund operational in 2010, Oliveira told reporters today in Brasilia. The fund had 16.3 billion reais ($9.35 billion) on Dec. 24, he said."
more: Brazil Sovereign Fund Can Buy Dollars in Spot Market
Wednesday, December 30, 2009
Tuesday, December 29, 2009
Brazil’s President Lula Signs Decree Creating Sovereign Fund
Brazil’s President Lula Signs Decree Creating Sovereign Fund
Dec. 29 (Bloomberg) -- Brazil’s President Luiz Inacio Lula da Silva signed a decree creating the country’s sovereign fund.
Brazil set the six-month London interbank offered rate, or Libor, as minimum return for the fund’s investments abroad, according to the decree published in the government’s official gazette today. The country set its long-term interest rate, or TJLP, as the minimum return for the fund’s investments in the local market.
Brazil’s sovereign fund will buy only investment grade assets rated by at least two agencies.
Last Updated: December 29, 2009 04:51 EST"
Dec. 29 (Bloomberg) -- Brazil’s President Luiz Inacio Lula da Silva signed a decree creating the country’s sovereign fund.
Brazil set the six-month London interbank offered rate, or Libor, as minimum return for the fund’s investments abroad, according to the decree published in the government’s official gazette today. The country set its long-term interest rate, or TJLP, as the minimum return for the fund’s investments in the local market.
Brazil’s sovereign fund will buy only investment grade assets rated by at least two agencies.
Last Updated: December 29, 2009 04:51 EST"
Thursday, December 24, 2009
Lemann, Telles, Sicupira to pay record Brazil fine
Lemann, Telles, Sicupira to pay record Brazil fine
RIO DE JANEIRO, Dec 24 (Reuters) - Brazilian financial tycoons Jorge Paulo Lemann, Marcel Herrmann Telles and Carlos Alberto Sicupira agreed to pay 18.6 million reais ($10.6 million) to settle a five-year old case where they were accused of abuse of power as controlling shareholders of beverage company AmBev (AMBV4.SA), the country's securities regulator said on Thursday.
The fines, among the highest ever paid by individuals in a financial lawsuit in Brazil, stemmed from a complaint filed in 2004 by Previ, Latin America's largest pension fund, against terms of the sale of AmBev to Belgium's Interbrew and the takeover of Canadian brewer Labatt, the regulator said.
Lemann, a Brazilian billionaire listed by Forbes magazine as the third wealthiest person in the country, Telles and Sicupira each agreed to pay 5 million reais to settle accusations that they wrongfully used a stock options plan to increase their stake in AmBev (ABV.N) and failed to meet their fiduciary duties, the regulator said in a statement.
Sicupira, the ninth richest Brazilian according to Forbes, also agreed to pay an additional 3.03 million reais to settle an accusation of conflict of interest. The regulator, known as CVM, said he should have abstained from voting in a board meeting that approved terms of the takeover of Labatt by AmBev because he was also a controlling shareholder of the Brazilian company.
Lemann and Telles, the seventh wealthiest Brazilian according to Forbes, also agreed pay each 285,000 reais to settle an accusation that they gave wrong information to the securities regulator regarding the Labatt purchase.
Brazil's securities regulator has stepped up its probe of insider trading and other types of fraud in the country as more individuals choose to put funds in the country's booming stock market. The regulator in October slapped a 19.2 million-real fine, the second-biggest ever in the country, on Credit Suisse (CSGN.VX) to settle an insider trading case.
Telles, Lemann and Sicupira founded Brazilian investment bank Garantia, which was sold to Credit Suisse in 1998, before making a fortune in the beer industry through a series of mergers and acquisitions that formed Anheuser-Busch InBev (ABI.BR). The three are among the largest individual owners of AB-Inbev.
Brazil's securities regulator also said six other AmBev executives agreed to pay a total 1.4 million reais to settle accusations they didn't fulfill their duties in regards to the takeover of Labatt.
Among those executives, Luis Felipe Dutra, AB-Inbev's current chief financial officer who was AmBev's director of investor relations at the time, agreed to pay 400,000 reais. ($1=1.753 reais) (Reporting by Elzio Barreto; Editing by Tim Dobbyn)"
RIO DE JANEIRO, Dec 24 (Reuters) - Brazilian financial tycoons Jorge Paulo Lemann, Marcel Herrmann Telles and Carlos Alberto Sicupira agreed to pay 18.6 million reais ($10.6 million) to settle a five-year old case where they were accused of abuse of power as controlling shareholders of beverage company AmBev (AMBV4.SA), the country's securities regulator said on Thursday.
The fines, among the highest ever paid by individuals in a financial lawsuit in Brazil, stemmed from a complaint filed in 2004 by Previ, Latin America's largest pension fund, against terms of the sale of AmBev to Belgium's Interbrew and the takeover of Canadian brewer Labatt, the regulator said.
Lemann, a Brazilian billionaire listed by Forbes magazine as the third wealthiest person in the country, Telles and Sicupira each agreed to pay 5 million reais to settle accusations that they wrongfully used a stock options plan to increase their stake in AmBev (ABV.N) and failed to meet their fiduciary duties, the regulator said in a statement.
Sicupira, the ninth richest Brazilian according to Forbes, also agreed to pay an additional 3.03 million reais to settle an accusation of conflict of interest. The regulator, known as CVM, said he should have abstained from voting in a board meeting that approved terms of the takeover of Labatt by AmBev because he was also a controlling shareholder of the Brazilian company.
Lemann and Telles, the seventh wealthiest Brazilian according to Forbes, also agreed pay each 285,000 reais to settle an accusation that they gave wrong information to the securities regulator regarding the Labatt purchase.
Brazil's securities regulator has stepped up its probe of insider trading and other types of fraud in the country as more individuals choose to put funds in the country's booming stock market. The regulator in October slapped a 19.2 million-real fine, the second-biggest ever in the country, on Credit Suisse (CSGN.VX) to settle an insider trading case.
Telles, Lemann and Sicupira founded Brazilian investment bank Garantia, which was sold to Credit Suisse in 1998, before making a fortune in the beer industry through a series of mergers and acquisitions that formed Anheuser-Busch InBev (ABI.BR). The three are among the largest individual owners of AB-Inbev.
Brazil's securities regulator also said six other AmBev executives agreed to pay a total 1.4 million reais to settle accusations they didn't fulfill their duties in regards to the takeover of Labatt.
Among those executives, Luis Felipe Dutra, AB-Inbev's current chief financial officer who was AmBev's director of investor relations at the time, agreed to pay 400,000 reais. ($1=1.753 reais) (Reporting by Elzio Barreto; Editing by Tim Dobbyn)"
Tuesday, December 22, 2009
Brazil Total Federal Debt Up 1.3% To BRL1.49 Tln In November
Brazil Total Federal Debt Up 1.3% To BRL1.49 Tln In November
BRASILIA (Dow Jones)--Under the impact of net debt issuance and interest accrual Brazil's total federal debt load rose by 1.3% to 1.49 trillion Brazilian reals ($837 billion) in November, the government reported Tuesday.
In a joint statement, Brazil's central bank and treasury said the country's domestic federal debt load denominated in reals rose 1.4% from October to BRL1.39 trillion.
The government reported the overall increase in domestic federal debt came alongside BRL7.92 billion in net debt issuance and BRL11.13 billion in interest accrual. -
Meanwhile, Brazil's outstanding federal debt overseas rose 0.4% from October to BRL102 billion.
Regarding the profile of federal domestic debt in November, treasury officials reported floating-rate debt fell to 37.39% of total domestic debt during the month from 37.66% in October.
At the same time, the share of fixed-rate debt rose to 32.47% from 31.23%.
The share of inflation-indexed bonds fell during the month of November to 28.21% of debt from 29.16%, while exchange-linked debt fell to 0.71% of the total from 0.72% the previous month.
Brazil's government has been attempting to lengthen its debt profile and reduce its exposure to interest-rate risk through increased sales of fixed-rate and inflation-indexed debt.
The government reported Tuesday that average maturity of domestic debt fell to 3.37 years in November from 3.42 years in October.
At the same time, however, the government said the volume of domestic debt maturing in the coming 12 months fell in November to 25.87% from 26.55%.
The average cost of debt coming due in the next 12 months fell to 10.86% annually from 11.15% annually.
The November federal debt figures released Tuesday represent a key element of consolidated public-sector debt figures scheduled for release next week.
Brazil posted net consolidated public sector debt in October of BRL1.33 trillion, equivalent to 44.8% of gross domestic product.
-By Gerald Jeffris, Dow Jones Newswires; (5561) 3335-0832, gerald.jeffris@dowjones.com"
BRASILIA (Dow Jones)--Under the impact of net debt issuance and interest accrual Brazil's total federal debt load rose by 1.3% to 1.49 trillion Brazilian reals ($837 billion) in November, the government reported Tuesday.
In a joint statement, Brazil's central bank and treasury said the country's domestic federal debt load denominated in reals rose 1.4% from October to BRL1.39 trillion.
The government reported the overall increase in domestic federal debt came alongside BRL7.92 billion in net debt issuance and BRL11.13 billion in interest accrual. -
Meanwhile, Brazil's outstanding federal debt overseas rose 0.4% from October to BRL102 billion.
Regarding the profile of federal domestic debt in November, treasury officials reported floating-rate debt fell to 37.39% of total domestic debt during the month from 37.66% in October.
At the same time, the share of fixed-rate debt rose to 32.47% from 31.23%.
The share of inflation-indexed bonds fell during the month of November to 28.21% of debt from 29.16%, while exchange-linked debt fell to 0.71% of the total from 0.72% the previous month.
Brazil's government has been attempting to lengthen its debt profile and reduce its exposure to interest-rate risk through increased sales of fixed-rate and inflation-indexed debt.
The government reported Tuesday that average maturity of domestic debt fell to 3.37 years in November from 3.42 years in October.
At the same time, however, the government said the volume of domestic debt maturing in the coming 12 months fell in November to 25.87% from 26.55%.
The average cost of debt coming due in the next 12 months fell to 10.86% annually from 11.15% annually.
The November federal debt figures released Tuesday represent a key element of consolidated public-sector debt figures scheduled for release next week.
Brazil posted net consolidated public sector debt in October of BRL1.33 trillion, equivalent to 44.8% of gross domestic product.
-By Gerald Jeffris, Dow Jones Newswires; (5561) 3335-0832, gerald.jeffris@dowjones.com"
Brazil Central Bank Sees 2010 Growth At 5.8%, IPCA At 4.6% - WSJ.com
Brazil Central Bank Sees 2010 Growth At 5.8%, IPCA At 4.6%
BRASILIA (Dow Jones)--Responding to the influence of strong local economic stimulus and an incipient global recovery, Brazil's economy should grow by 5.8% in 2010 from near zero this year, while inflation will accelerate to above the country's 4.5% annual inflation target, Brazil's central bank said Tuesday in its fourth-quarter inflation report.
The central bank revised its forecast for 2009 IPCA consumer price inflation upward to 4.3% from 4.2% seen earlier and lifted its projection for 2010 IPCA inflation to 4.6% from 4.4%. Meanwhile, it revised its economic growth projection for 2009 lower, to 0.2% from 0.8% seen in the previous report.
The monetary authority said the latest forecasts were based on an improving outlook abroad as well as a continued firm economic rebound locally.
'The scenario is based on a medium-term recovery in global economic activity on the external front, as well as continued expansion within a benign inflation environment on the domestic side,' the bank said. 'From the point of view of risks related to the inflation outlook, the main risk comes from the intensity of a domestic economic recovery, which will undergo still more important influence from economic policy stimulus.'
The bank, meanwhile, confirmed market expectations that inflation pressure could remain strong as the local economy stages a recovery, projecting 2011 inflation to remain above target at 4.6%.
The latest projections released by the central bank were based on an exchange rate of 1.75 Brazilian reals per dollar and a reference Selic interest rate of 8.75% annually.
-By Gerald Jeffris, Dow Jones Newswires; (5561) 3335-0832, gerald.jeffris@dowjones.com"
BRASILIA (Dow Jones)--Responding to the influence of strong local economic stimulus and an incipient global recovery, Brazil's economy should grow by 5.8% in 2010 from near zero this year, while inflation will accelerate to above the country's 4.5% annual inflation target, Brazil's central bank said Tuesday in its fourth-quarter inflation report.
The central bank revised its forecast for 2009 IPCA consumer price inflation upward to 4.3% from 4.2% seen earlier and lifted its projection for 2010 IPCA inflation to 4.6% from 4.4%. Meanwhile, it revised its economic growth projection for 2009 lower, to 0.2% from 0.8% seen in the previous report.
The monetary authority said the latest forecasts were based on an improving outlook abroad as well as a continued firm economic rebound locally.
'The scenario is based on a medium-term recovery in global economic activity on the external front, as well as continued expansion within a benign inflation environment on the domestic side,' the bank said. 'From the point of view of risks related to the inflation outlook, the main risk comes from the intensity of a domestic economic recovery, which will undergo still more important influence from economic policy stimulus.'
The bank, meanwhile, confirmed market expectations that inflation pressure could remain strong as the local economy stages a recovery, projecting 2011 inflation to remain above target at 4.6%.
The latest projections released by the central bank were based on an exchange rate of 1.75 Brazilian reals per dollar and a reference Selic interest rate of 8.75% annually.
-By Gerald Jeffris, Dow Jones Newswires; (5561) 3335-0832, gerald.jeffris@dowjones.com"
Brazil's BTG may bid for asset manager BRZ-report | Reuters
Brazil's BTG may bid for asset manager BRZ
SAO PAULO, Dec 22 (Reuters) - BTG Pactual, the securities firm controlled by Brazilian banking wunderkind Andre Esteves, is in talks to buy Sao Paulo-based asset management firm BRZ Investimentos, magazine Veja said on its Tuesday online edition.
Stocks | Mergers & Acquisitions | Bonds | Global Markets | Private Capital | Financials
Veja's Radar column, where the information was published, didn't give any terms for the transaction. GP Investments controls about 60 percent of BRZ, with the remaining 40 percent still belonging to a group of managing partners led by Nelson Rozental and Marcos Falcao.
BRZ has about 3 billion reais ($1.7 billion) in assets under management.
Spokeswomen for BRZ and GP Investments declined to immediately comment on the Veja report. A BTG Pactual spokeswoman did not answer calls requesting comments on the Veja report.
BRZ Investimentos, which was spun off about two years ago from Latin America's largest private equity firm GP Investments (GPIV11.SA), has been struggling in recent weeks after suspending redemptions on a private credit fund it oversees following massive withdrawals, according to local media reports. ($1=1.78 reais) (Reporting by Guillermo Parra-Bernal; Editing by Hans Peters)"
SAO PAULO, Dec 22 (Reuters) - BTG Pactual, the securities firm controlled by Brazilian banking wunderkind Andre Esteves, is in talks to buy Sao Paulo-based asset management firm BRZ Investimentos, magazine Veja said on its Tuesday online edition.
Stocks | Mergers & Acquisitions | Bonds | Global Markets | Private Capital | Financials
Veja's Radar column, where the information was published, didn't give any terms for the transaction. GP Investments controls about 60 percent of BRZ, with the remaining 40 percent still belonging to a group of managing partners led by Nelson Rozental and Marcos Falcao.
BRZ has about 3 billion reais ($1.7 billion) in assets under management.
Spokeswomen for BRZ and GP Investments declined to immediately comment on the Veja report. A BTG Pactual spokeswoman did not answer calls requesting comments on the Veja report.
BRZ Investimentos, which was spun off about two years ago from Latin America's largest private equity firm GP Investments (GPIV11.SA), has been struggling in recent weeks after suspending redemptions on a private credit fund it oversees following massive withdrawals, according to local media reports. ($1=1.78 reais) (Reporting by Guillermo Parra-Bernal; Editing by Hans Peters)"
Monday, December 21, 2009
Emerging-Market Bond Yield Spreads Decline on Global Recovery - Bloomberg.com
Dec. 21 (Bloomberg) -- The yield gap on emerging-market debt fell the most in almost two months on speculation the global economic recovery is gathering strength.
The extra yield investors demand to own developing-nation debt over U.S. Treasuries declined 14 basis points to 2.90 percentage points by 5 p.m. in New York, according to JPMorgan Chase & Co., the biggest drop since Oct. 29. The MSCI Emerging Markets Index dropped 0.4 percent to 946.42 after a gain in the dollar reduced the appeal of commodities including oil and sugar as alternatives.
more: Emerging-Market Bond Yield Spreads Decline on Global Recovery
The extra yield investors demand to own developing-nation debt over U.S. Treasuries declined 14 basis points to 2.90 percentage points by 5 p.m. in New York, according to JPMorgan Chase & Co., the biggest drop since Oct. 29. The MSCI Emerging Markets Index dropped 0.4 percent to 946.42 after a gain in the dollar reduced the appeal of commodities including oil and sugar as alternatives.
more: Emerging-Market Bond Yield Spreads Decline on Global Recovery
Sunday, December 20, 2009
LATAM WEEKAHEAD-Brazil Q4 inflation report key for rate outlook | Reuters
LATAM WEEKAHEAD-Brazil Q4 inflation report key for rate outlook
NEW YORK, Dec 20 (Reuters) - Investors will be cautiously monitoring a key fourth-quarter inflation report to be released by the Brazilian central bank on Tuesday, looking for signs that a recent batch of positive economic indicators might force policy-makers to raise rates earlier than expected.
The Brazilian central bank so far has said it is comfortable with the inflation outlook for 2010, which could allow the benchmark Selic rate to remain at its all-time low of 8.75 percent for a long time.
But investors in the market of interest rate futures have been pricing a hike of at least 150 basis points as early as in the first half of the year, especially after Brazilian data on retail sales and job creation exceeded expectations last week.
"With Brazil's economic recovery continuing to show strong momentum, anchored by solid domestic demand boosted by this year's strong jobs recovery, re-accelerating growth and fiscal stimulus, expectations are high that the central bank will begin hiking rates in the first half of 2020," RBC Capital Markets said in a report.
Other key data points investors will be watching this week are:
Tuesday Dec. 22
* Brazil - central bank Q4 inflation report
Wednesday Dec. 23
* Brazil - IPCA 15 inflation: Barclays Capital expects mid-month consumer inflation in Brazil to slow down to 0.3 percent in December, after a 0.44 percent reading in the previous period.
By Walter Brandimarte
NEW YORK, Dec 20 (Reuters) - Investors will be cautiously monitoring a key fourth-quarter inflation report to be released by the Brazilian central bank on Tuesday, looking for signs that a recent batch of positive economic indicators might force policy-makers to raise rates earlier than expected.
The Brazilian central bank so far has said it is comfortable with the inflation outlook for 2010, which could allow the benchmark Selic rate to remain at its all-time low of 8.75 percent for a long time.
But investors in the market of interest rate futures have been pricing a hike of at least 150 basis points as early as in the first half of the year, especially after Brazilian data on retail sales and job creation exceeded expectations last week.
"With Brazil's economic recovery continuing to show strong momentum, anchored by solid domestic demand boosted by this year's strong jobs recovery, re-accelerating growth and fiscal stimulus, expectations are high that the central bank will begin hiking rates in the first half of 2020," RBC Capital Markets said in a report.
Other key data points investors will be watching this week are:
Tuesday Dec. 22
* Brazil - central bank Q4 inflation report
Wednesday Dec. 23
* Brazil - IPCA 15 inflation: Barclays Capital expects mid-month consumer inflation in Brazil to slow down to 0.3 percent in December, after a 0.44 percent reading in the previous period.
By Walter Brandimarte
Thursday, December 17, 2009
Banco do Brasil Is in Talks to Buy U.S. Bank, CEO Tells Valor - Bloomberg.com
Banco do Brasil Is in Talks to Buy U.S. Bank, CEO Tells Valor
Dec. 17 (Bloomberg) -- Banco do Brasil SA is in talks to buy the U.S. assets of a foreign bank in distress, Valor Economico reported, citing an interview with Chief Executive Officer Aldemir Bendine.
While Bendine declined to identify the bank, he said it has 14 branches in the U.S., the Sao Paulo-based newspaper reported.
Banco do Brasil is planning also to expand through acquisitions or by opening its own operations in Peru, Colombia, Paraguay, Uruguay, Angola and Mozambique, Valor reported the CEO as saying. In Europe, the bank aims to boost its business through a Vienna-based subsidiary, he said.
Banco do Brasil announced talks to buy a stake in Argentina’s Banco Patagonia earlier this week.
To contact the reporter responsible for this story: Camila Fontana in Sao Paulo at cfontana@bloomberg.net
Last Updated: December 17, 2009 04:47 EST"
Dec. 17 (Bloomberg) -- Banco do Brasil SA is in talks to buy the U.S. assets of a foreign bank in distress, Valor Economico reported, citing an interview with Chief Executive Officer Aldemir Bendine.
While Bendine declined to identify the bank, he said it has 14 branches in the U.S., the Sao Paulo-based newspaper reported.
Banco do Brasil is planning also to expand through acquisitions or by opening its own operations in Peru, Colombia, Paraguay, Uruguay, Angola and Mozambique, Valor reported the CEO as saying. In Europe, the bank aims to boost its business through a Vienna-based subsidiary, he said.
Banco do Brasil announced talks to buy a stake in Argentina’s Banco Patagonia earlier this week.
To contact the reporter responsible for this story: Camila Fontana in Sao Paulo at cfontana@bloomberg.net
Last Updated: December 17, 2009 04:47 EST"
Wednesday, December 16, 2009
Paraguay-Brazil Energy Treaty Going Nowhere Fast - NYTimes.com
Paraguay-Brazil Energy Treaty Going Nowhere Fast
ASUNCION, Paraguay (AP) -- It's been nearly five months since the presidents of Brazil and Paraguay agreed on a breakthrough deal to triple Paraguay's income from the world's second-largest hydroelectric dam, but the money won't be flowing anytime soon.
The treaty would increase Paraguay's income from energy generated by the Itaipu dam on the shared Parana River to $360 million, money that Paraguay's President Fernando Lugo wants to spend on agrarian reform to benefit 300,000 landless peasant families.
It also calls for Brazil to invest in high-capacity power lines across Paraguay, creating an energy grid that could help one of South America's poorest countries reshape its agricultural economy.
The treaty, signed by Lugo and Luiz Inacio Lula Da Silva on July 25, was quickly approved by Paraguay's congress, but lawmakers in Brazil have yet to move the plan out of the first of four committees due to consider it -- partly because what Brazil mostly gets from the deal is good relations with its poorer neighbor.
''It is controversial. It's not a simple matter, because it carries more benefits for Paraguay than Brazil,'' Brazilian Rep. Severiano Alves, a member of the lower house's foreign relations committee, told The Associated Press.
He said both houses of Congress would probably vote on it in the first half of 2010.
Carlos Mateo Balmelli, Itaipu's Paraguayan director, has lobbied for the agreement, but Alves says Brazil should not be pressured.
''They didn't pay anything to build the dam -- they just provided territory and water from the river. Brazil was the one that assumed the cost of financing Itaipu,'' Alves said.
Itaipu's 20 huge turbines generate electricity divided equally between the neighbors, but Paraguay's much smaller population and economy consumes the energy of only one turbine. The current treaty forces Paraguay to sell its excess capacity to Brazil until 2023, without the possibility of selling the energy elsewhere, at far less than market prices.
The new treaty would increase Paraguay's income from $5.10 to $15.30 per megawatt/hour for excess power sold to Brazil. Lugo said the proposal has already succeeded in overcoming Paraguay's
isolation, a legacy of Alfredo Stroessners 1954-1989 dictatorship.
The existing treaty was signed in 1973, before the dam was built. Both countries took on loans to build it -- debt that now totals $17 billion. But Paraguay doesn't recognize $8 billion of it because it considers the debt to be illegally obtained by corrupt officials of the former government.
------
Associated Press Writer Marco Sibaja in Brasilia, Brazil contribued to this story.
ASUNCION, Paraguay (AP) -- It's been nearly five months since the presidents of Brazil and Paraguay agreed on a breakthrough deal to triple Paraguay's income from the world's second-largest hydroelectric dam, but the money won't be flowing anytime soon.
The treaty would increase Paraguay's income from energy generated by the Itaipu dam on the shared Parana River to $360 million, money that Paraguay's President Fernando Lugo wants to spend on agrarian reform to benefit 300,000 landless peasant families.
It also calls for Brazil to invest in high-capacity power lines across Paraguay, creating an energy grid that could help one of South America's poorest countries reshape its agricultural economy.
The treaty, signed by Lugo and Luiz Inacio Lula Da Silva on July 25, was quickly approved by Paraguay's congress, but lawmakers in Brazil have yet to move the plan out of the first of four committees due to consider it -- partly because what Brazil mostly gets from the deal is good relations with its poorer neighbor.
''It is controversial. It's not a simple matter, because it carries more benefits for Paraguay than Brazil,'' Brazilian Rep. Severiano Alves, a member of the lower house's foreign relations committee, told The Associated Press.
He said both houses of Congress would probably vote on it in the first half of 2010.
Carlos Mateo Balmelli, Itaipu's Paraguayan director, has lobbied for the agreement, but Alves says Brazil should not be pressured.
''They didn't pay anything to build the dam -- they just provided territory and water from the river. Brazil was the one that assumed the cost of financing Itaipu,'' Alves said.
Itaipu's 20 huge turbines generate electricity divided equally between the neighbors, but Paraguay's much smaller population and economy consumes the energy of only one turbine. The current treaty forces Paraguay to sell its excess capacity to Brazil until 2023, without the possibility of selling the energy elsewhere, at far less than market prices.
The new treaty would increase Paraguay's income from $5.10 to $15.30 per megawatt/hour for excess power sold to Brazil. Lugo said the proposal has already succeeded in overcoming Paraguay's
isolation, a legacy of Alfredo Stroessners 1954-1989 dictatorship.
The existing treaty was signed in 1973, before the dam was built. Both countries took on loans to build it -- debt that now totals $17 billion. But Paraguay doesn't recognize $8 billion of it because it considers the debt to be illegally obtained by corrupt officials of the former government.
------
Associated Press Writer Marco Sibaja in Brasilia, Brazil contribued to this story.
Brazil Holds TJLP Long-Term Interest Rate Unchanged At 6.00% - WSJ.com
Brazil Holds TJLP Long-Term Interest Rate Unchanged At 6.00%
BRASILIA (Dow Jones)--Brazil will maintain its TJLP long-term interest rate unchanged at 6.00% annually for the first quarter of 2010, the country's National Monetary Council, or CMN, announced Wednesday.
The TJLP, used on loans to businesses made by the government-backed Brazilian National Development Bank, has been held unchanged since the second quarter this year. The rate normally is based on expectations for inflation plus risk spreads on the country's sovereign debt. The government, however, didn't reveal the composition of the rate.
According to recent Brazilian central bank market surveys, Brazil's IPCA consumer price inflation is seen at around 4.5% over the coming 12 months.
Brazil's sovereign debt spreads, according to the J.P. Morgan Emerging Markets Bond Index Plus, stood at 191 points over U.S. Treasurys at Tuesday's market close.
The CMN is the Brazilian government's highest-ranking economic policy-making body. It's chaired by Finance Minister Guido Mantega and also includes Central Bank President Henrique Meirelles and Planning Minister Paulo Bernardo. The council reviews the TJLP rate every three months.
-By Gerald Jeffris, Dow Jones Newswires; (5561) 3335-0832; gerald.jeffris@dowjones.com
Reservas crescerão menos em 2010
Reservas crescerão menos em 2010
Os analistas de bancos são unânimes em apostar que o Brasil vai continuar a ter sobras de dólares em 2010 e que as reservas internacionais (o caixa do país em moeda estrangeira) vão continuar a crescer. Isso apesar das previsões de um déficit maior em conta corrente (que mede o comércio de bens e serviços) e de mais recursos externos necessários para financiá-lo.
Neste ano, o Banco Central já comprou US$ 25,572 bilhões no mercado interno de câmbio até o dia 4 de dezembro, segundo o último dado disponível. Absorveu parte importante do fluxo positivo de dólares ao país. Para 2010, as estimativas de bancos ouvidos pelo Valor são de que a autoridade monetária vai continuar a adquirir a moeda americana, mas em valores menores do que isso: de US$ 15 bilhões a, no máximo, US$ 20 bilhões.
Foto Destaque
As reservas internacionais, onde são contabilizados esses dólares adquiridos, devem crescer menos do que os US$ 38,3 bilhões até agora neste ano. Devem passar dos US$ 240 bilhões no final de 2009 para US$ 270 bilhões em 2010, com aproximadamente US$ 10 bilhões representando a própria valorização dos ativos nos quais o dinheiro das reservas é aplicado pelo Banco Central."
Cristiane Perini Lucchesi, de São Paulo Valor Online
Os analistas de bancos são unânimes em apostar que o Brasil vai continuar a ter sobras de dólares em 2010 e que as reservas internacionais (o caixa do país em moeda estrangeira) vão continuar a crescer. Isso apesar das previsões de um déficit maior em conta corrente (que mede o comércio de bens e serviços) e de mais recursos externos necessários para financiá-lo.
Neste ano, o Banco Central já comprou US$ 25,572 bilhões no mercado interno de câmbio até o dia 4 de dezembro, segundo o último dado disponível. Absorveu parte importante do fluxo positivo de dólares ao país. Para 2010, as estimativas de bancos ouvidos pelo Valor são de que a autoridade monetária vai continuar a adquirir a moeda americana, mas em valores menores do que isso: de US$ 15 bilhões a, no máximo, US$ 20 bilhões.
Foto Destaque
As reservas internacionais, onde são contabilizados esses dólares adquiridos, devem crescer menos do que os US$ 38,3 bilhões até agora neste ano. Devem passar dos US$ 240 bilhões no final de 2009 para US$ 270 bilhões em 2010, com aproximadamente US$ 10 bilhões representando a própria valorização dos ativos nos quais o dinheiro das reservas é aplicado pelo Banco Central."
Cristiane Perini Lucchesi, de São Paulo Valor Online
Brazil Interest Rate Future Yield Rises to Highest in 10 Months - Bloomberg.com
Brazil Interest Rate Future Yield Rises to Highest in 10 Months
Dec. 16 (Bloomberg) -- ...
Policy makers lowered the benchmark rate to a low of 8.75 percent in July. Brazilian economists expect an increase to 10.63 percent by the end of next year, according to a weekly central bank survey published on Dec. 14.
The real was little changed at 1.7513 per dollar at 9:44 a.m. in New York, from 1.7520 yesterday.
To contact the reporter responsible for this story: Camila Fontana in Sao Paulo at cfontana@bloomberg.net
Dec. 16 (Bloomberg) -- ...
Policy makers lowered the benchmark rate to a low of 8.75 percent in July. Brazilian economists expect an increase to 10.63 percent by the end of next year, according to a weekly central bank survey published on Dec. 14.
The real was little changed at 1.7513 per dollar at 9:44 a.m. in New York, from 1.7520 yesterday.
To contact the reporter responsible for this story: Camila Fontana in Sao Paulo at cfontana@bloomberg.net
Cinco municípios responderam por 25% do PIB do país em 2007, nota IBGE
Cinco municípios responderam por 25% do PIB do país em 2007, nota IBGE
RIO - Cinco municípios responderam por aproximadamente 25% de toda a renda gerada pelo país em 2007. De acordo com o PIB dos Municípios Brasileiros 2003-2007, divulgado hoje pelo Instituto Brasileiro de Geografia e Estatística (IBGE), São Paulo respondeu, em 2007, por 12% do PIB brasileiro, enquanto Rio de Janeiro ficou com 5,2%; Brasília com 3,8%; Belo Horizonte com 1,4% e Curitiba com 1,4%.
A pesquisa mostra ainda que os 45 municípios mais ricos do país responderam em 2007 por quase metade do PIB, agregando 30,5% da população brasileira. Já os 1.342 municípios com a menor participação relativa foram responsáveis, em conjunto, por 1% do PIB, contando com 3,5% da população do país.
Entre as regiões, a mais desigual em 2007 era a Centro-Oeste, onde Brasília respondeu por 42,4% do PIB regional. Retirando Brasília do cálculo, 16 outros municípios agregaram 50% das riquezas da região. No Norte, sete municípios foram responsáveis por 50% do PIB, enquanto, no Nordeste, foram necessários 21 municípios para atingir 50% do PIB; no Sul, foram 27 e no Sudeste, 13.
De acordo com o IBGE, os cinco municípios com menor PIB foram Olho D´Água do Piauí, São Luís do Piauí, Areia de Baraúnas (Paraíba), São Miguel da Baixa Grande (Piauí) e Santo Antônio dos Milagres (Piauí).
O conjunto das capitais brasileiras representava, em 2007, 34,4% da renda nacional, sendo que as capitais no Norte foram responsáveis pro 2,4% do total; as do Nordeste por 4,5%; as do Sul por 2,9%; as do Centro-Oeste por 5,1%; e as do Sudeste por 19,4%. Apenas Florianópolis, em Santa Catarina, não apresentou o maior PIB do Estado, ficando atrás de Joinville e de Itajaí.
No total, o país fechou o ano de 2007 com 25 municípios com participação superior a 0,5% do PIB do país. Deste total, dez (São Paulo, Osasco, São Bernardo do Campo, Santos, Jundiaí, Campinas, São José dos Campos, Santo André, Barueri e Guarulhos) ficam no Estado de São Paulo; três no Rio de Janeiro (Rio de Janeiro, Duque de Caxias e Campos dos Goytacazes); dois em Minas Gerais (Belo Horizonte e Betim) e mais as capitais Curitiba, Vitória, Recife, Goiânia, Belém, Salvador, Porto Alegre, Fortaleza, Brasília e Manaus."
RIO - Cinco municípios responderam por aproximadamente 25% de toda a renda gerada pelo país em 2007. De acordo com o PIB dos Municípios Brasileiros 2003-2007, divulgado hoje pelo Instituto Brasileiro de Geografia e Estatística (IBGE), São Paulo respondeu, em 2007, por 12% do PIB brasileiro, enquanto Rio de Janeiro ficou com 5,2%; Brasília com 3,8%; Belo Horizonte com 1,4% e Curitiba com 1,4%.
A pesquisa mostra ainda que os 45 municípios mais ricos do país responderam em 2007 por quase metade do PIB, agregando 30,5% da população brasileira. Já os 1.342 municípios com a menor participação relativa foram responsáveis, em conjunto, por 1% do PIB, contando com 3,5% da população do país.
Entre as regiões, a mais desigual em 2007 era a Centro-Oeste, onde Brasília respondeu por 42,4% do PIB regional. Retirando Brasília do cálculo, 16 outros municípios agregaram 50% das riquezas da região. No Norte, sete municípios foram responsáveis por 50% do PIB, enquanto, no Nordeste, foram necessários 21 municípios para atingir 50% do PIB; no Sul, foram 27 e no Sudeste, 13.
De acordo com o IBGE, os cinco municípios com menor PIB foram Olho D´Água do Piauí, São Luís do Piauí, Areia de Baraúnas (Paraíba), São Miguel da Baixa Grande (Piauí) e Santo Antônio dos Milagres (Piauí).
O conjunto das capitais brasileiras representava, em 2007, 34,4% da renda nacional, sendo que as capitais no Norte foram responsáveis pro 2,4% do total; as do Nordeste por 4,5%; as do Sul por 2,9%; as do Centro-Oeste por 5,1%; e as do Sudeste por 19,4%. Apenas Florianópolis, em Santa Catarina, não apresentou o maior PIB do Estado, ficando atrás de Joinville e de Itajaí.
No total, o país fechou o ano de 2007 com 25 municípios com participação superior a 0,5% do PIB do país. Deste total, dez (São Paulo, Osasco, São Bernardo do Campo, Santos, Jundiaí, Campinas, São José dos Campos, Santo André, Barueri e Guarulhos) ficam no Estado de São Paulo; três no Rio de Janeiro (Rio de Janeiro, Duque de Caxias e Campos dos Goytacazes); dois em Minas Gerais (Belo Horizonte e Betim) e mais as capitais Curitiba, Vitória, Recife, Goiânia, Belém, Salvador, Porto Alegre, Fortaleza, Brasília e Manaus."
Valor Online (Rafael Rosas | Valor)
16/12/2009 10:21
Tuesday, December 15, 2009
Spain's Elecnor to build 96 MW wind parks in Brazil | Markets | Reuters
Spain's Elecnor to build 96 MW wind parks in Brazil
MADRID, Dec 15 (Reuters) - Spanish energy firm Elecnor (ENOR.MC) on Tuesday said it had won a contract worth 183 million euros ($266.1 million) to build five wind parks in Brazil.
The company added in a statement that the parks in the southern Brazilian state of Rio Grande do Sul would have a total generating capacity of 96 megawatts. (Reporting by Tomas Gonzalez; Writing by Martin Roberts)"
MADRID, Dec 15 (Reuters) - Spanish energy firm Elecnor (ENOR.MC) on Tuesday said it had won a contract worth 183 million euros ($266.1 million) to build five wind parks in Brazil.
The company added in a statement that the parks in the southern Brazilian state of Rio Grande do Sul would have a total generating capacity of 96 megawatts. (Reporting by Tomas Gonzalez; Writing by Martin Roberts)"
Brazil Sells $500 Million of Bonds to Yield 4.75%
Brazil Sells $500 Million of Bonds to Yield 4.75%
Dec. 15 (Bloomberg) -- Brazil sold $500 million of 10-year bonds in the country’s fifth international dollar bond offering this year.
The South American country sold the bonds to yield 4.75 percent, down from 6.13 percent in an initial offering in January and from 5.80 percent in a second sale in May. Today’s yield was 1.14 percentage points more than U.S. Treasuries. The government said in a statement it plans to sell up to $25 million of the securities in Asian markets.
Brazil tapped debt markets as a global economic recovery fuels demand for the securities. Emerging-market debt sales rose 83 percent to a record $597 billion this year, according to Bloomberg data. Brazil is returning to overseas markets after Abu Dhabi’s bailout yesterday of Dubai World boosted demand for higher-yielding assets, said Paul Biszko, emerging-markets strategist at RBC Capital Markets in Toronto.
“Brazil is using Dubai as an opportunity to issue now versus a potentially even more volatile backdrop next year,” Biszko said.
The yield on Brazil’s 5.875 percent bonds due in 2019 fell to 4.65 percent from 6.44 percent on Jan. 8, according to JPMorgan Chase & Co. The bond’s price rose to 109.02 cents on the dollar from 95.90 cents during that period.
Morgan Stanley and Goldman Sachs Group Inc. arranged today’s bond offering, said a person familiar with the transaction who declined to be identified because he’s not allowed to speak publicly.
To contact the reporters responsible for this story: Francisco Marcelino at mdeoliveira@bloomberg.net; Veronica Espinosa in New York at vespinosa@bloomberg.net.
Last Updated: December 15, 2009 16:50 EST
Dec. 15 (Bloomberg) -- Brazil sold $500 million of 10-year bonds in the country’s fifth international dollar bond offering this year.
The South American country sold the bonds to yield 4.75 percent, down from 6.13 percent in an initial offering in January and from 5.80 percent in a second sale in May. Today’s yield was 1.14 percentage points more than U.S. Treasuries. The government said in a statement it plans to sell up to $25 million of the securities in Asian markets.
Brazil tapped debt markets as a global economic recovery fuels demand for the securities. Emerging-market debt sales rose 83 percent to a record $597 billion this year, according to Bloomberg data. Brazil is returning to overseas markets after Abu Dhabi’s bailout yesterday of Dubai World boosted demand for higher-yielding assets, said Paul Biszko, emerging-markets strategist at RBC Capital Markets in Toronto.
“Brazil is using Dubai as an opportunity to issue now versus a potentially even more volatile backdrop next year,” Biszko said.
The yield on Brazil’s 5.875 percent bonds due in 2019 fell to 4.65 percent from 6.44 percent on Jan. 8, according to JPMorgan Chase & Co. The bond’s price rose to 109.02 cents on the dollar from 95.90 cents during that period.
Morgan Stanley and Goldman Sachs Group Inc. arranged today’s bond offering, said a person familiar with the transaction who declined to be identified because he’s not allowed to speak publicly.
To contact the reporters responsible for this story: Francisco Marcelino at mdeoliveira@bloomberg.net; Veronica Espinosa in New York at vespinosa@bloomberg.net.
Last Updated: December 15, 2009 16:50 EST
Emerging-Market Debt Trading Rises 19%, EMTA Says - Business Exchange
Emerging-Market Debt Trading Rises 19%, EMTA Says
Brazilian debt tallied the second-most trading volume, with $155 billion in turnover.
The extra yield investors demand to own developing-nation bonds instead of U.S. Treasuries shrank to 2.93 percentage points from 6.90 percentage points on Dec. 31, according to JPMorgan Chase & Co.’s EMBI+ Index.
Emerging-market corporate bond trading totaled $175 billion in the third quarter, a 98 percent increase from the same period last year, according to the survey.
To contact the reporters responsible for this story: Veronica Espinosa in New York at vespinosa@bloomberg.net.
Brazilian debt tallied the second-most trading volume, with $155 billion in turnover.
The extra yield investors demand to own developing-nation bonds instead of U.S. Treasuries shrank to 2.93 percentage points from 6.90 percentage points on Dec. 31, according to JPMorgan Chase & Co.’s EMBI+ Index.
Emerging-market corporate bond trading totaled $175 billion in the third quarter, a 98 percent increase from the same period last year, according to the survey.
To contact the reporters responsible for this story: Veronica Espinosa in New York at vespinosa@bloomberg.net.
Brazil Launches $500M 2019 Reopened Bonds At 4.75%
Brazil Launches $500M 2019 Reopened Bonds At 4.75%
NEW YORK (Dow Jones)--Brazil launched $500 million of 2019 global bonds at 4.75% Tuesday, according to a person familiar with the deal.
The Brazilian Treasury announced Tuesday the reopening of its 2019 global sovereign bond, expanding the current $1.775 billion issue by $500 million. The coupon is 5.875%.
The books on the deal for New York and Europe were closed at about 11 a.m. EST and were said to be oversubscribed.
However, people familiar with the matter said the treasury has no intention of increasing the amount of the offer, even in the event of heavy demand.
The issue may only be increased during the Asian trading session by up to 5% for investors unable to participate during this time zone.
Morgan Stanley and Goldman Sachs are joint bookrunners on the issue.
Dedicated emerging-market investors weren't keen on participating, even though most are broadly optimistic on Brazil's economy as a whole.
'Brazil as country, we're quite bullish on fundamentals,' said one big fund manager. 'But the market has more than priced that in. So, generally, we're underweight Brazil.' However, they said that the fund will use this reopening to rebalance its portfolio.
Kevin Daly, an emerging market portfolio manager at Aberdeen Investment Managers in London, said: 'Brazil just doesn't yield anything. It's just ridiculously low.'
Interested investors are likely global government bond funds, crossover investors, and those that need to rebalance their portfolios if they have too much cash at the end of the year, he said.
Brazil first issued the 2019 bond in January with a volume of $1.025 billion. The bond came with a coupon rate of 5.875% and a yield of 6.13%. In May, the treasury reopened the 2019 bond, raising an additional $750 million at an annual yield of 5.8%.
Earlier this month, Treasury Secretary Arno Augustin told Dow Jones Newswires that Brazil's government was likely to issue another 10-year overseas bond before the end of the year.
'We are looking to build a better yield curve and improve the quality of our debt management,' Augustin said at that time.
Brazil's is enjoying its investment grade status to access the debt market. In September, Moody's Investors Service raised Brazil's sovereign credit rating to Baa3, an investment-grade rating, more than a year after Standard & Poor's and Fitch Rating elevated Brazil to investment grade.
-By Riva Froymovich, Dow Jones Newswires; 212-416-2217; riva.froymovich@dowjones.com
-By Tom Murphy and Rogerio Jelmayer, Dow Jones Newswires; 55-11-2847-4519; brazil@dowjones.com"
NEW YORK (Dow Jones)--Brazil launched $500 million of 2019 global bonds at 4.75% Tuesday, according to a person familiar with the deal.
The Brazilian Treasury announced Tuesday the reopening of its 2019 global sovereign bond, expanding the current $1.775 billion issue by $500 million. The coupon is 5.875%.
The books on the deal for New York and Europe were closed at about 11 a.m. EST and were said to be oversubscribed.
However, people familiar with the matter said the treasury has no intention of increasing the amount of the offer, even in the event of heavy demand.
The issue may only be increased during the Asian trading session by up to 5% for investors unable to participate during this time zone.
Morgan Stanley and Goldman Sachs are joint bookrunners on the issue.
Dedicated emerging-market investors weren't keen on participating, even though most are broadly optimistic on Brazil's economy as a whole.
'Brazil as country, we're quite bullish on fundamentals,' said one big fund manager. 'But the market has more than priced that in. So, generally, we're underweight Brazil.' However, they said that the fund will use this reopening to rebalance its portfolio.
Kevin Daly, an emerging market portfolio manager at Aberdeen Investment Managers in London, said: 'Brazil just doesn't yield anything. It's just ridiculously low.'
Interested investors are likely global government bond funds, crossover investors, and those that need to rebalance their portfolios if they have too much cash at the end of the year, he said.
Brazil first issued the 2019 bond in January with a volume of $1.025 billion. The bond came with a coupon rate of 5.875% and a yield of 6.13%. In May, the treasury reopened the 2019 bond, raising an additional $750 million at an annual yield of 5.8%.
Earlier this month, Treasury Secretary Arno Augustin told Dow Jones Newswires that Brazil's government was likely to issue another 10-year overseas bond before the end of the year.
'We are looking to build a better yield curve and improve the quality of our debt management,' Augustin said at that time.
Brazil's is enjoying its investment grade status to access the debt market. In September, Moody's Investors Service raised Brazil's sovereign credit rating to Baa3, an investment-grade rating, more than a year after Standard & Poor's and Fitch Rating elevated Brazil to investment grade.
-By Riva Froymovich, Dow Jones Newswires; 212-416-2217; riva.froymovich@dowjones.com
-By Tom Murphy and Rogerio Jelmayer, Dow Jones Newswires; 55-11-2847-4519; brazil@dowjones.com"
Pride sues Brazil's GP Investments for $44 mln | Reuters
Pride sues Brazil's GP Investments for $44 mln
NEW YORK, Dec 15 (Reuters) - Pride International Inc (PDE.N), an oil and gas service company, sued Brazilian private equity firm GP Investments Ltd GPIV11.LU and its Argentine subsidiary for $44 million Pride said they owe in a stock purchase agreement.
The lawsuit filed on Monday in Manhattan federal court in New York said the agreement on Aug. 9, 2007, with Sao Paolo-based GP and San Antonio Oil & Gas Services Ltd of Buenos Aires was for the sale of Pride's Latin America land-based drilling, exploration and production services business.
Ernst & Young [ERNY.UL] accounting firm determined the amount owed after the closing of the deal and GP and San Antonio failed to meet a contractual deadline of Dec. 21, 2008 to pay, the lawsuit said.
'Despite continuing to tout their financial stability, success, and business principles to the international business and investment community, GP and San Antonio are apparently either unwilling or unable to pay the over $44 million owed to plaintiffs under the agreement,' the lawsuit said.
An attorney for GP Investments could not immediately be reached for comment.
The case is Pride International Inc et al v GP Investments Ltd, U.S. District Court for the Southern District of New York, No. 09-10174.
(Reporting by Grant McCool; Editing by Richard Chang)"
NEW YORK, Dec 15 (Reuters) - Pride International Inc (PDE.N), an oil and gas service company, sued Brazilian private equity firm GP Investments Ltd GPIV11.LU and its Argentine subsidiary for $44 million Pride said they owe in a stock purchase agreement.
The lawsuit filed on Monday in Manhattan federal court in New York said the agreement on Aug. 9, 2007, with Sao Paolo-based GP and San Antonio Oil & Gas Services Ltd of Buenos Aires was for the sale of Pride's Latin America land-based drilling, exploration and production services business.
Ernst & Young [ERNY.UL] accounting firm determined the amount owed after the closing of the deal and GP and San Antonio failed to meet a contractual deadline of Dec. 21, 2008 to pay, the lawsuit said.
'Despite continuing to tout their financial stability, success, and business principles to the international business and investment community, GP and San Antonio are apparently either unwilling or unable to pay the over $44 million owed to plaintiffs under the agreement,' the lawsuit said.
An attorney for GP Investments could not immediately be reached for comment.
The case is Pride International Inc et al v GP Investments Ltd, U.S. District Court for the Southern District of New York, No. 09-10174.
(Reporting by Grant McCool; Editing by Richard Chang)"
Monday, December 14, 2009
Brazil Corporate Bond Sales to Rise, Coutinho Says
Dec. 14 (Bloomberg) -- Brazil’s local-currency corporate debt market is poised for a “golden year” in 2010 as investor appetite for longer-maturity real-denominated assets increases, said Luciano Coutinho, president of the state development bank.
Brazil has “great potential” for a secondary market for corporate bonds, and BNDES, as the development bank is known, is prepared to help build it, Coutinho said. Larger Brazilian companies with “good” credit ratings will be able to issue real-denominated debt next year in addition to selling shares, Coutinho said.
“We expect 2010 will be a golden year for the development of the corporate bond market,” Coutinho told reporters in Sao Paulo. “The capital markets have robust and immediate opportunities for expansion.”
more: Brazil Corporate Bond Sales to Rise, Coutinho Says
Brazil has “great potential” for a secondary market for corporate bonds, and BNDES, as the development bank is known, is prepared to help build it, Coutinho said. Larger Brazilian companies with “good” credit ratings will be able to issue real-denominated debt next year in addition to selling shares, Coutinho said.
“We expect 2010 will be a golden year for the development of the corporate bond market,” Coutinho told reporters in Sao Paulo. “The capital markets have robust and immediate opportunities for expansion.”
more: Brazil Corporate Bond Sales to Rise, Coutinho Says
Friday, December 11, 2009
BTG to create Brazil infrastructure fund-executive | Reuters
BTG to create Brazil infrastructure fund-executive
SAO PAULO, Dec 11 (Reuters) - BTG Pactual, the securities firm led by Andre Esteves, is set to launch a private equity-backed Brazilian infrastructure fund, to take advantage of massive road, port and dam projects, a senior executive said.
Private Capital
'With expectations of growth coming around 5 percent next year, the need for infrastructure investment will be huge,' Eduardo Cutolo, an executive director at Sao Paulo-based BTG Pactual, told reporters late on Thursday.
Private equity investment is expected to grow next year as the country's growth prospects and declining interest rates draw a new class of risk-hungry investors.
Brazil makes up for about half of Latin America's gross domestic product and in the past four years represented 45 percent of all private equity investments in the region, according to Emerging Markets Private Equity Association data.
Cutolo did not give details on the terms or size of the fund.
Esteves and his partners sold Rio de Janeiro-based Pactual to UBS AG (UBSN.VX) in 2006 and later became global head of fixed-income, currencies and commodities at the Swiss bank. He formed BTG last year with some of his former partners at Pactual.
Less than four months after quitting his UBS job in 2008, Esteves and his partners in BTG moved to buy Lehman Brothers Inc.'s Brazil unit to expand its trading muscle. BTG bought back Pactual from UBS for about $2.5 billion in a deal concluded in September this year.
The bank aims at taking up the slack left by global investment funds and banks that had to flee emerging markets amid the worst financial crisis in eight decades. Cutolo reiterated that BTG Pactual wants to become the largest emerging markets-based securities firm in a few years. (Reporting by Aluisio Alves; Writing by Guillermo Parra-Bernal; editing by Simon Jessop)
SAO PAULO, Dec 11 (Reuters) - BTG Pactual, the securities firm led by Andre Esteves, is set to launch a private equity-backed Brazilian infrastructure fund, to take advantage of massive road, port and dam projects, a senior executive said.
Private Capital
'With expectations of growth coming around 5 percent next year, the need for infrastructure investment will be huge,' Eduardo Cutolo, an executive director at Sao Paulo-based BTG Pactual, told reporters late on Thursday.
Private equity investment is expected to grow next year as the country's growth prospects and declining interest rates draw a new class of risk-hungry investors.
Brazil makes up for about half of Latin America's gross domestic product and in the past four years represented 45 percent of all private equity investments in the region, according to Emerging Markets Private Equity Association data.
Cutolo did not give details on the terms or size of the fund.
Esteves and his partners sold Rio de Janeiro-based Pactual to UBS AG (UBSN.VX) in 2006 and later became global head of fixed-income, currencies and commodities at the Swiss bank. He formed BTG last year with some of his former partners at Pactual.
Less than four months after quitting his UBS job in 2008, Esteves and his partners in BTG moved to buy Lehman Brothers Inc.'s Brazil unit to expand its trading muscle. BTG bought back Pactual from UBS for about $2.5 billion in a deal concluded in September this year.
The bank aims at taking up the slack left by global investment funds and banks that had to flee emerging markets amid the worst financial crisis in eight decades. Cutolo reiterated that BTG Pactual wants to become the largest emerging markets-based securities firm in a few years. (Reporting by Aluisio Alves; Writing by Guillermo Parra-Bernal; editing by Simon Jessop)
Brazil’s Real to Surpass 1.50 Per Dollar, Booth Says
Dec. 11 (Bloomberg) -- Brazil’s real may appreciate “way past” 1.50 per U.S. dollar next year as investors flock to Latin America’s largest economy, said Ashmore Group Plc’s Jerome Booth.
Brazil’s benchmark interest rate may climb by 2 percentage points next year from a record low of 8.75 percent, Booth, chief of research at the London-based firm that oversees $31 billion of assets, said in a telephone interview.
“Brazilian rates are going to go up, but they’re not going to go up the 400 basis points that some people think,” Booth said. “The currency I would expect to rally considerably. Way past 1.50.”
...“The perception of risk needs changing radically,” Booth said. “The investor that is thinking of maybe putting 5 percent in emerging markets needs to rethink and realize that being 95 percent in developed markets is very risky.”
more: Brazil’s Real to Surpass 1.50 Per Dollar, Booth Says
Brazil’s benchmark interest rate may climb by 2 percentage points next year from a record low of 8.75 percent, Booth, chief of research at the London-based firm that oversees $31 billion of assets, said in a telephone interview.
“Brazilian rates are going to go up, but they’re not going to go up the 400 basis points that some people think,” Booth said. “The currency I would expect to rally considerably. Way past 1.50.”
...“The perception of risk needs changing radically,” Booth said. “The investor that is thinking of maybe putting 5 percent in emerging markets needs to rethink and realize that being 95 percent in developed markets is very risky.”
more: Brazil’s Real to Surpass 1.50 Per Dollar, Booth Says
Wednesday, December 9, 2009
Agência Senado - 09/12/2009 - Promulgada emenda dos precatórios
Agência Senado - 09/12/2009 - Promulgada emenda dos precatórios
![[Foto: ]](http://www.senado.gov.br/noticia/multimidia/verImagem.aspx?codImagem=195310 "[Foto: ]")
CONGRESSO
09/12/2009 - 11h31
09/12/2009 - 11h31
Promulgada emenda dos precatórios
Em sessão solene presidida pelo deputado Marco Maia (PT-RS), vice-presidente da Câmara dos Deputados, o Congresso Nacional promulgou, na manhã desta quarta-feira (09), a Emenda Constitucional 62/09, que altera as regras para pagamento de precatórios, como são chamadas as dívidas judiciais da União, estados, Distrito Federal e municípios. Leu o texto o deputado Inocêncio Oliveira (PR-PE), 1º secretário da Câmara.
A emenda cria um regime especial segundo o qual a quitação dos precatórios alimentares e de menor valor terá prioridade sobre os demais. O texto promulgado também obriga os municípios a destinarem entre 1% e 1,5% de suas receitas correntes líquidas para o pagamento dos precatórios. Esse percentual, para os estados, fica entre 1,5% e 2%. A emenda estabelece ainda que os valores das dívidas sofrerão atualização monetária de acordo com as regras da caderneta de poupança.
Conforme o estabelecido pela emenda, 50% dos recursos dos precatórios serão usados para pagamento conforme ordem cronológica e à vista. A outra metade da dívida deverá ser quitada por meio de leilões, onde o credor que conceder o maior desconto sobre o total da dívida a receber terá seu crédito quitado primeiro. Também estão previstos pagamentos por ordem crescente de débito ou por conciliação entre as partes.Teresa Cardoso / Agência Senado
(Reprodução autorizada mediante citação da Agência Senado)
(Reprodução autorizada mediante citação da Agência Senado)
Tuesday, December 8, 2009
Rates Rise As Brazil Sells BRL1.25B NTN-Bs At 6.26%-6.83% - WSJ.com
Rates Rise As Brazil Sells BRL1.25B NTN-Bs At 6.26%-6.83%
BRASILIA (Dow Jones)--Brazil's federal treasury sold BRL1.25 billion($714.2 million) worth of NTN-B inflation-linked bonds on auction Tuesday at a slightly higher range of interest rates than seen at recent auctions.
The government sold bonds with six maturities ranging from Nov. 2011, to May 2045 at average interest rates ranging from 6.26% to 6.83%. Those compared with rates ranging from 6.16% to 6.78% at an auction of similar maturities held on Nov. 24.
NTN-B bonds pay a rate equal to Brazil's official IPCA inflation rate plus an interest rate established at the auction.
Traders said the yields seen at Tuesday's auction reflected expectations of gradually accelerating inflation and rising interest rates for the coming year.
Brazil's 12-month IPCA consumer price inflation through mid-November rose 4.09% versus a 4.14% advance in the same period through mid-October.
The latest figure remained below the government's official inflation target of 4.5%, however recent market estimates have pointed toward accelerating inflation in the year ahead.
According to a weekly central bank market survey released Monday, IPCA inflation is seen ending 2010 at 4.48%. The same survey shows the country's reference Selic interest rate rising to 10.6% annually from a current 8.75%.
-By Gerald Jeffris, Dow Jones Newswires; (5561) 3335-0832, gerald.jeffris@dowjones.com"
BRASILIA (Dow Jones)--Brazil's federal treasury sold BRL1.25 billion($714.2 million) worth of NTN-B inflation-linked bonds on auction Tuesday at a slightly higher range of interest rates than seen at recent auctions.
The government sold bonds with six maturities ranging from Nov. 2011, to May 2045 at average interest rates ranging from 6.26% to 6.83%. Those compared with rates ranging from 6.16% to 6.78% at an auction of similar maturities held on Nov. 24.
NTN-B bonds pay a rate equal to Brazil's official IPCA inflation rate plus an interest rate established at the auction.
Traders said the yields seen at Tuesday's auction reflected expectations of gradually accelerating inflation and rising interest rates for the coming year.
Brazil's 12-month IPCA consumer price inflation through mid-November rose 4.09% versus a 4.14% advance in the same period through mid-October.
The latest figure remained below the government's official inflation target of 4.5%, however recent market estimates have pointed toward accelerating inflation in the year ahead.
According to a weekly central bank market survey released Monday, IPCA inflation is seen ending 2010 at 4.48%. The same survey shows the country's reference Selic interest rate rising to 10.6% annually from a current 8.75%.
-By Gerald Jeffris, Dow Jones Newswires; (5561) 3335-0832, gerald.jeffris@dowjones.com"
Monday, December 7, 2009
Brazil's Belo Monte Not Seen As Essential To Energy Demand - WSJ.com
SAO PAULO (Dow Jones)--Brazil's lights will stay on whether or not the planned Belo Monte hydroelectric dam ever sees the light of day, some top sector analysts said Monday.
'Our view is that Brazil will not lack power supply if Belo Monte does not get built because thermoelectric power companies and wind power will be available to meet demand,' said Marcos Severine, a senior analyst at Itau Securities in Sao Paulo.
The drama over the 11,000 megawatt power station has many local pundits saying that Brazil will not meet energy demand right around the time the nation hosts the World Cup in 2014 and the Olympic games in 2016.
Although Brazilians are notorious for talking their country into a catastrophe, Walter Vitto, an industry consultant at Tendencias in Sao Paulo, said where Belo Monte fails, coal and natural gas will find their niche.
'We are not going to be facing the chaotic rolling blackouts we faced in 2000 and 2001,' he said. Back then, the government was reining in spending and private energy companies were not investing in expansion due to uncertainties over the new, regulated energy market policies being created at the time.
'There is certainly the risk that hydroelectric power won't be able to meet demand, but then the new natural gas, wind and coal fired plants will be able to make up for it,' Vitto said.
The Belo Monte dam was supposed to be auctioned off to bidders in December but that has been postponed because the environmental protection agency, Ibama, has not yet signed off on the project.
The dam will be Brazil's second largest power station behind the Itaipu dam in the south, which has installed capacity to generate 14,000 megawatts of electricity.
Later this month, the government will hold the so-called A-5 energy auction. The auction, designed to meet energy demand in five years' time, is dominated by natural gas and coal-fired power companies.
Nearly 80% of Brazil's electric power comes from hydroelectric dams.
-By Kenneth Rapoza, Dow Jones Newswires; 5511-2847-4541; kenneth.rapoza@dowjones.com"
Brazil's Belo Monte Not Seen As Essential To Energy Demand
'Our view is that Brazil will not lack power supply if Belo Monte does not get built because thermoelectric power companies and wind power will be available to meet demand,' said Marcos Severine, a senior analyst at Itau Securities in Sao Paulo.
The drama over the 11,000 megawatt power station has many local pundits saying that Brazil will not meet energy demand right around the time the nation hosts the World Cup in 2014 and the Olympic games in 2016.
Although Brazilians are notorious for talking their country into a catastrophe, Walter Vitto, an industry consultant at Tendencias in Sao Paulo, said where Belo Monte fails, coal and natural gas will find their niche.
'We are not going to be facing the chaotic rolling blackouts we faced in 2000 and 2001,' he said. Back then, the government was reining in spending and private energy companies were not investing in expansion due to uncertainties over the new, regulated energy market policies being created at the time.
'There is certainly the risk that hydroelectric power won't be able to meet demand, but then the new natural gas, wind and coal fired plants will be able to make up for it,' Vitto said.
The Belo Monte dam was supposed to be auctioned off to bidders in December but that has been postponed because the environmental protection agency, Ibama, has not yet signed off on the project.
The dam will be Brazil's second largest power station behind the Itaipu dam in the south, which has installed capacity to generate 14,000 megawatts of electricity.
Later this month, the government will hold the so-called A-5 energy auction. The auction, designed to meet energy demand in five years' time, is dominated by natural gas and coal-fired power companies.
Nearly 80% of Brazil's electric power comes from hydroelectric dams.
-By Kenneth Rapoza, Dow Jones Newswires; 5511-2847-4541; kenneth.rapoza@dowjones.com"
Brazil's Belo Monte Not Seen As Essential To Energy Demand
Sunday, December 6, 2009
Brazil Treasury Secretary: Overseas Bond Likely In December - WSJ.com
Brazil Treasury Secretary: Overseas Bond Likely In December
SAO PAULO (Dow Jones)--Brazil's government likely will issue another overseas bond before the end of the year, Treasury Secretary Arno Augustin said Friday.
'We are looking to build a better yield curve and improve the quality of our debt management,' Augustin said in a telephone interview.
He said the bond likely would be denominated in U.S. dollars and carry a 10-year term. He said it was possible the government would reopen its 2019 bond. He didn't offer any idea about the size of the offer.
Augustin said the government was also studying a possible overseas bond denominated in the Brazilian real. 'This is on our agenda,' he said. 'However, it is not likely for the short term since rates for dollar-denominated bonds are so good right now. A real-denominated issue is possible in 2010.'
Brazil has accessed the international debt market four times this year. In January, Brazil issued $1.025 billion in global bonds due in 2019. The bonds were sold at a yield of 6.127%. In May, it reopened the operation, raising another $750 million at a yield of 5.8%.
In July, the treasury obtained $525 million from the issue of an overseas bond due in 2037, with a yield of 6.45%. At the end of September, it raised $1.27 billion with the issue of a global bond due 2041, with a yield of 5.8%.
In the September operation, the government took advantage of a sovereign upgrade by Moody's, tapping the international bond market to fill out its debt curve.
In September, Moody's Investors Service raised Brazil's sovereign credit rating to Baa3, an investment-grade rating, more than a year after Standard & Poor's and Fitch Rating did so.
Brazil has issued real-denominated bonds overseas before, most recently in May 2008. At that time, it raised 750 million Brazilian reals ($441 million) from the reopening of an existing 2028 bond.
'Given the current international environment of low interest rates, Brazil's government will continue its policy of repurchasing overseas debt,' Augustin said.
In 2008, Brazil repurchased overseas bonds with total face value of $1.2 billion.
'We would like to buy more, but investors seem like they want to hold on to their Brazilian paper,' Augustin said.
The treasury secretary said Brazil's government will release its annual domestic debt management plan at the beginning of 2010. 'I can already tell you at least one thing about the plan,' Augustin said. 'We will aim to reduce the debt-to-GDP ratio next year.'
The debt-to-GDP ratio was 44.8% as of Oct. 31, up from 36.0% at the end of 2008. Brazil's public sector debt rose this year because of the global recession, which caused a decline in tax revenue.
But Brazil's economy is expected to rebound in 2010. Most economists are expecting growth of 5% next year after an expansion of no more than 1% for 2009.
Regarding Brazil's volatile foreign exchange market, Augustin said, 'We are closely monitoring the exchange rate, and we will be ready to correct any distortions.'
The Brazilian real has gained about 35% against the U.S. dollar so far in 2009, causing worries for exporters.
Augustin said Brazil's government will continue its policy of systematic purchases of U.S. dollars in order to build foreign reserves. 'This policy will continue, managed by the central bank,' he said.
Brazil's reserves stood at $238 billion at the end of November, up $5 billion from the previous month.
-By Rogerio Jelmayer, Dow Jones Newswires; 55-11-2847-4519; brazil@dowjones.com"
SAO PAULO (Dow Jones)--Brazil's government likely will issue another overseas bond before the end of the year, Treasury Secretary Arno Augustin said Friday.
'We are looking to build a better yield curve and improve the quality of our debt management,' Augustin said in a telephone interview.
He said the bond likely would be denominated in U.S. dollars and carry a 10-year term. He said it was possible the government would reopen its 2019 bond. He didn't offer any idea about the size of the offer.
Augustin said the government was also studying a possible overseas bond denominated in the Brazilian real. 'This is on our agenda,' he said. 'However, it is not likely for the short term since rates for dollar-denominated bonds are so good right now. A real-denominated issue is possible in 2010.'
Brazil has accessed the international debt market four times this year. In January, Brazil issued $1.025 billion in global bonds due in 2019. The bonds were sold at a yield of 6.127%. In May, it reopened the operation, raising another $750 million at a yield of 5.8%.
In July, the treasury obtained $525 million from the issue of an overseas bond due in 2037, with a yield of 6.45%. At the end of September, it raised $1.27 billion with the issue of a global bond due 2041, with a yield of 5.8%.
In the September operation, the government took advantage of a sovereign upgrade by Moody's, tapping the international bond market to fill out its debt curve.
In September, Moody's Investors Service raised Brazil's sovereign credit rating to Baa3, an investment-grade rating, more than a year after Standard & Poor's and Fitch Rating did so.
Brazil has issued real-denominated bonds overseas before, most recently in May 2008. At that time, it raised 750 million Brazilian reals ($441 million) from the reopening of an existing 2028 bond.
'Given the current international environment of low interest rates, Brazil's government will continue its policy of repurchasing overseas debt,' Augustin said.
In 2008, Brazil repurchased overseas bonds with total face value of $1.2 billion.
'We would like to buy more, but investors seem like they want to hold on to their Brazilian paper,' Augustin said.
The treasury secretary said Brazil's government will release its annual domestic debt management plan at the beginning of 2010. 'I can already tell you at least one thing about the plan,' Augustin said. 'We will aim to reduce the debt-to-GDP ratio next year.'
The debt-to-GDP ratio was 44.8% as of Oct. 31, up from 36.0% at the end of 2008. Brazil's public sector debt rose this year because of the global recession, which caused a decline in tax revenue.
But Brazil's economy is expected to rebound in 2010. Most economists are expecting growth of 5% next year after an expansion of no more than 1% for 2009.
Regarding Brazil's volatile foreign exchange market, Augustin said, 'We are closely monitoring the exchange rate, and we will be ready to correct any distortions.'
The Brazilian real has gained about 35% against the U.S. dollar so far in 2009, causing worries for exporters.
Augustin said Brazil's government will continue its policy of systematic purchases of U.S. dollars in order to build foreign reserves. 'This policy will continue, managed by the central bank,' he said.
Brazil's reserves stood at $238 billion at the end of November, up $5 billion from the previous month.
-By Rogerio Jelmayer, Dow Jones Newswires; 55-11-2847-4519; brazil@dowjones.com"
Thursday, November 26, 2009
Governo pretende ousar na liberalização cambial
Medidas em estudo avançado no governo devem permitir maior internacionalização dos bancos que operam no Brasil
A nova rodada de liberalização cambial, em estudo avançado no governo, deve contemplar medidas mais ousadas, que facilitem a saída de poupança doméstica para aplicações no exterior e permitam maior internacionalização dos bancos que operam no Brasil.
As propostas que estão sob avaliação de especialistas do governo são: autorizar os bancos brasileiros a emprestar a empresas no exterior recursos captados no mercado interno; remover entraves para que os bancos no Brasil operem com derivativos no mercado internacional; ampliar ou mesmo extinguir os limites para que os fundos multimercados apliquem no mercado externo; e ampliar o teto de aplicação dos fundos de pensão, recentemente autorizados a investir até 10% do patrimônio líquido em fundos de investimentos no exterior.
Esse conjunto de medidas - que deverá ser acompanhado por uma série de revogações de circulares e resoluções do Conselho Monetário Nacional (CMN) que instituíram regras cambiais próprias de uma economia carente de moeda estrangeira - representa uma segunda etapa no processo de liberalização do mercado de câmbio no país. As primeiras medidas se destinaram, em anos recentes, a facilitar o ingresso de moeda estrangeira no Brasil. Agora, as ações do governo estão dirigidas para a simplificação da saída de recursos.
Para que os bancos que operam no país possam emprestar a empresas no exterior, sejam as nacionais que se internacionalizam ou as estrangeiras, será preciso extinguir os mandamentos da circular nº 24, do Banco Central, que desde fevereiro de 1966 impõe, num só artigo, a proibição para que essas instituições emprestem poupança doméstica fora do país. O artigo diz: ' Comunicamos que é expressamente vedado às instituições financeiras, por qualquer forma, aplicar ou promover a colocação no exterior de recursos coletados no país'.
A circular nº 24 é parte da própria história do Banco Central, criado pela lei nº 4.595, em 1964. Na avaliação de fontes do governo, essa regra não condiz com a necessidade de o sistema financeiro doméstico acompanhar a internacionalização das empresas brasileiras.
Valor Econômico > Impresso > Caderno A
Claudia Safatle, de Brasília
26/11/2009
Governo pretende ousar na liberalização cambial
Nov. 26 (Bloomberg) -- The Brazilian government is planning measures to facilitate private investments abroad and to give local banks more freedom to make international transactions, Valor Economico reported, without saying where it got the information.
Authorities are evaluating proposals such as allowing local banks to lend abroad and to operate derivatives in the international markets, the Sao Paulo-based newspaper said. Other rules under consideration are ending limits for hedge funds to invest abroad and raising the limit for pension funds to buy foreign assets.
The proposals are part of a broader government effort to liberalize foreign-exchange transactions, Valor reported.
Calls by Bloomberg News to the Finance Ministry and the central bank weren’t immediately returned.
To contact the reporter responsible for this story: Camila Fontana in Sao Paulo at cfontana@bloomberg.net
Last Updated: November 26, 2009 05:17 EST
A nova rodada de liberalização cambial, em estudo avançado no governo, deve contemplar medidas mais ousadas, que facilitem a saída de poupança doméstica para aplicações no exterior e permitam maior internacionalização dos bancos que operam no Brasil.
As propostas que estão sob avaliação de especialistas do governo são: autorizar os bancos brasileiros a emprestar a empresas no exterior recursos captados no mercado interno; remover entraves para que os bancos no Brasil operem com derivativos no mercado internacional; ampliar ou mesmo extinguir os limites para que os fundos multimercados apliquem no mercado externo; e ampliar o teto de aplicação dos fundos de pensão, recentemente autorizados a investir até 10% do patrimônio líquido em fundos de investimentos no exterior.
Esse conjunto de medidas - que deverá ser acompanhado por uma série de revogações de circulares e resoluções do Conselho Monetário Nacional (CMN) que instituíram regras cambiais próprias de uma economia carente de moeda estrangeira - representa uma segunda etapa no processo de liberalização do mercado de câmbio no país. As primeiras medidas se destinaram, em anos recentes, a facilitar o ingresso de moeda estrangeira no Brasil. Agora, as ações do governo estão dirigidas para a simplificação da saída de recursos.
Para que os bancos que operam no país possam emprestar a empresas no exterior, sejam as nacionais que se internacionalizam ou as estrangeiras, será preciso extinguir os mandamentos da circular nº 24, do Banco Central, que desde fevereiro de 1966 impõe, num só artigo, a proibição para que essas instituições emprestem poupança doméstica fora do país. O artigo diz: ' Comunicamos que é expressamente vedado às instituições financeiras, por qualquer forma, aplicar ou promover a colocação no exterior de recursos coletados no país'.
A circular nº 24 é parte da própria história do Banco Central, criado pela lei nº 4.595, em 1964. Na avaliação de fontes do governo, essa regra não condiz com a necessidade de o sistema financeiro doméstico acompanhar a internacionalização das empresas brasileiras.
Valor Econômico > Impresso > Caderno A
Claudia Safatle, de Brasília
26/11/2009
Governo pretende ousar na liberalização cambial
Nov. 26 (Bloomberg) -- The Brazilian government is planning measures to facilitate private investments abroad and to give local banks more freedom to make international transactions, Valor Economico reported, without saying where it got the information.
Authorities are evaluating proposals such as allowing local banks to lend abroad and to operate derivatives in the international markets, the Sao Paulo-based newspaper said. Other rules under consideration are ending limits for hedge funds to invest abroad and raising the limit for pension funds to buy foreign assets.
The proposals are part of a broader government effort to liberalize foreign-exchange transactions, Valor reported.
Calls by Bloomberg News to the Finance Ministry and the central bank weren’t immediately returned.
To contact the reporter responsible for this story: Camila Fontana in Sao Paulo at cfontana@bloomberg.net
Last Updated: November 26, 2009 05:17 EST
Wednesday, November 25, 2009
UPDATE: Brazil Boosts Support For IMF Facility To $14 Billion
BRASILIA (Dow Jones)--Brazil will make available a total of $14 billion to the International Monetary Fund's NAB fund, up from the $10 billion originally planned, Finance Minister Guido Mantega said Wednesday.
NAB stands for the IMF's New Arrangements to Borrow and will contain total funding of some $600 billion. The NAB facility is meant to boost the IMF's lending resources during times of global financial stress.
'This money will be available to the IMF and it will be doled out as needed, rather than all at once,' Mantega said at a news conference. 'It's like an expense account.'
The NAB facility was originally planned to hold $500 billion, mainly from industrialized countries. But Brazil, along with a number of other emerging countries, has agreed to participate.
Mantega said, 'Brazil, Russia, China and India, the BRIC countries, will control 15% of the NAB fund. That equals virtually a veto power because decisions on how to use the fund need to be approved by holders of at least 85% of the stakes.'
-By Tom Murphy, Dow Jones Newswires; 55-11-2847-4519; brazil@dowjones.com"
NAB stands for the IMF's New Arrangements to Borrow and will contain total funding of some $600 billion. The NAB facility is meant to boost the IMF's lending resources during times of global financial stress.
'This money will be available to the IMF and it will be doled out as needed, rather than all at once,' Mantega said at a news conference. 'It's like an expense account.'
The NAB facility was originally planned to hold $500 billion, mainly from industrialized countries. But Brazil, along with a number of other emerging countries, has agreed to participate.
Mantega said, 'Brazil, Russia, China and India, the BRIC countries, will control 15% of the NAB fund. That equals virtually a veto power because decisions on how to use the fund need to be approved by holders of at least 85% of the stakes.'
-By Tom Murphy, Dow Jones Newswires; 55-11-2847-4519; brazil@dowjones.com"
Brazil Boosts Support For IMF Facility To $14 Billion
Friday, November 20, 2009
Brazil May Allow Some Funds to Invest 100% Overseas, Folha Says - Bloomberg.com
Brazil May Allow Some Funds to Invest 100% Overseas, Folha Says
Nov. 20 (Bloomberg) -- Brazil’s government may allow so- called multimarket funds to invest entirely in overseas assets, eliminating a 20 percent limit on foreign holdings to help curb the appreciation of the real, Folha de S. Paulo reported, without saying where it got the information.
Multimarket funds are for high-risk investors and can hold fixed-income assets, currency, gold, shares, options and other financial instruments, Folha said.
Finance Ministry spokeswoman Patricia Mesquita declined to comment when contacted by Bloomberg News today.
To contact the reporter on this story: Laura Price in London at lprice3@bloomberg.net
Last Updated: November 20, 2009 05:54 EST"
Nov. 20 (Bloomberg) -- Brazil’s government may allow so- called multimarket funds to invest entirely in overseas assets, eliminating a 20 percent limit on foreign holdings to help curb the appreciation of the real, Folha de S. Paulo reported, without saying where it got the information.
Multimarket funds are for high-risk investors and can hold fixed-income assets, currency, gold, shares, options and other financial instruments, Folha said.
Finance Ministry spokeswoman Patricia Mesquita declined to comment when contacted by Bloomberg News today.
To contact the reporter on this story: Laura Price in London at lprice3@bloomberg.net
Last Updated: November 20, 2009 05:54 EST"
Thursday, November 19, 2009
Brazil Increase of IOF ‘Should Not Be Ruled Out,’ JPMorgan Says - Bloomberg.com
Brazil Increase of IOF ‘Should Not Be Ruled Out,’ JPMorgan Says
Nov. 19 (Bloomberg) -- Brazil’s so-called IOF tax on the purchase of equity and fixed-income assets by foreigners may be expanded further to fight an appreciation in the currency, JPMorgan Chase & Co. said.
The extension of the tax to the creation of new depositary receipts, announced yesterday, shows that the IOF remains the key instrument to fight the real’s appreciation, and therefore IOF brackets that are higher or broader in scope should not be ruled out, wrote Sao Paulo-based Julio C. Callegari in a note.
To contact the reporter on this story: Paulo Winterstein in Sao Paulo at pwinterstein@bloomberg.net.
Last Updated: November 19, 2009 07:31 EST"
Nov. 19 (Bloomberg) -- Brazil’s so-called IOF tax on the purchase of equity and fixed-income assets by foreigners may be expanded further to fight an appreciation in the currency, JPMorgan Chase & Co. said.
The extension of the tax to the creation of new depositary receipts, announced yesterday, shows that the IOF remains the key instrument to fight the real’s appreciation, and therefore IOF brackets that are higher or broader in scope should not be ruled out, wrote Sao Paulo-based Julio C. Callegari in a note.
To contact the reporter on this story: Paulo Winterstein in Sao Paulo at pwinterstein@bloomberg.net.
Last Updated: November 19, 2009 07:31 EST"
Monday, November 16, 2009
JPMorgan Chase Names Berquo to Run Bank’s Businesses in Brazil - Business Exchange
JPMorgan Chase Names Berquo to Run Bank’s Businesses in Brazil
Nov. 16 (Bloomberg) -- JPMorgan Chase & Co., the second- largest U.S. bank, named Claudio Berquo to run the firm’s investment bank, asset management and treasury and securities services businesses in Brazil.
Berquo, 48, will continue as head of the private bank in Brazil, Latin America’s largest economy, and report to Eduardo Cepeda in that role, according to an internal memo from Mary Erdoes, chief executive officer of the asset management unit, and Nicolas Aguzin, head of Latin America. Tasha Pelio, a spokeswoman for the New York-based bank, confirmed the memo’s contents.
JPMorgan is extending its reach internationally as rivals struggle to return to profitability. The bank is in talks to buy the half of U.K. brokerage Cazenove Group that it doesn’t already own, according to a person familiar with the matter.
“As strong as our business is in Latin America, there is still tremendous opportunity for growth, particularly in Brazil,” Erdoes and Aguzin said in the memo.
Berquo, who has been at JPMorgan for 15 years, was previously responsible for JPMorgan’s wealth management business in Brazil. Prior to that he was a senior executive in the investment bank, the memo said.
JPMorgan ranks fifth in Latin American equity sales this year, according to Bloomberg data. Brazilian economists raised their gross domestic product growth forecast to 5 percent in 2010, from 4.83 percent last week, according to a central bank survey of about 100 professionals.
To contact the reporter on this story: Elizabeth Hester in New York at ehester@bloomberg.net.
Last Updated: November 16, 2009 15:57 EST"
Nov. 16 (Bloomberg) -- JPMorgan Chase & Co., the second- largest U.S. bank, named Claudio Berquo to run the firm’s investment bank, asset management and treasury and securities services businesses in Brazil.
Berquo, 48, will continue as head of the private bank in Brazil, Latin America’s largest economy, and report to Eduardo Cepeda in that role, according to an internal memo from Mary Erdoes, chief executive officer of the asset management unit, and Nicolas Aguzin, head of Latin America. Tasha Pelio, a spokeswoman for the New York-based bank, confirmed the memo’s contents.
JPMorgan is extending its reach internationally as rivals struggle to return to profitability. The bank is in talks to buy the half of U.K. brokerage Cazenove Group that it doesn’t already own, according to a person familiar with the matter.
“As strong as our business is in Latin America, there is still tremendous opportunity for growth, particularly in Brazil,” Erdoes and Aguzin said in the memo.
Berquo, who has been at JPMorgan for 15 years, was previously responsible for JPMorgan’s wealth management business in Brazil. Prior to that he was a senior executive in the investment bank, the memo said.
JPMorgan ranks fifth in Latin American equity sales this year, according to Bloomberg data. Brazilian economists raised their gross domestic product growth forecast to 5 percent in 2010, from 4.83 percent last week, according to a central bank survey of about 100 professionals.
To contact the reporter on this story: Elizabeth Hester in New York at ehester@bloomberg.net.
Last Updated: November 16, 2009 15:57 EST"
Brazil Real 7.2% Undervalued Even After Rally, BofA Says
Nov. 16 (Bloomberg) -- Brazil’s real, the best- performing major currency this year, is undervalued by 7.2 percent against the dollar based on the nation’s rising exports and higher savings, Bank of America Corp. said.
Emerging-market currencies are “broadly undervalued” against the dollar, with Latin America the most undervalued region in the world, Bank of America strategists wrote in a note to clients.
The Brazilian currency, which has gained 35 percent this year, rose 0.6 percent to 1.7126 against the dollar at 11:22 a.m. New York time. The real should appreciate to 1.60 per dollar in two to three years, Benoit Anne, the London-based head of emerging market foreign-currency and debt strategy at Bank of America, said by phone today.
“In nominal terms, the real is still undervalued,” Anne said, citing an improving current account and excess savings. “We think the real should strengthen over the long term based on our model.”
... more: Brazil Real 7.2% Undervalued Even After Rally, BofA Says
Emerging-market currencies are “broadly undervalued” against the dollar, with Latin America the most undervalued region in the world, Bank of America strategists wrote in a note to clients.
The Brazilian currency, which has gained 35 percent this year, rose 0.6 percent to 1.7126 against the dollar at 11:22 a.m. New York time. The real should appreciate to 1.60 per dollar in two to three years, Benoit Anne, the London-based head of emerging market foreign-currency and debt strategy at Bank of America, said by phone today.
“In nominal terms, the real is still undervalued,” Anne said, citing an improving current account and excess savings. “We think the real should strengthen over the long term based on our model.”
... more: Brazil Real 7.2% Undervalued Even After Rally, BofA Says
Friday, November 13, 2009
Dollar Overwhelms Central Banks From Brazil to Korea (Update1) - Bloomberg.com
By Oliver Biggadike and Matthew Brown
Nov. 13 (Bloomberg) -- Brazil, South Korea and Russia are losing the battle among developing nations to reduce gains in their currencies and keep exports competitive as the demand for their financial assets, driven by the slumping dollar, is proving more than central banks can handle."...
‘Suffered Tremendously’
Brazil’s real is up 1.6 percent this month, even after imposing a tax in October on foreign stock and bond investments and increasing foreign reserves by $9.5 billion in October in an effort to curb the currency’s appreciation. The real has risen 33 percent this year.
“We have to be careful that our exchange rate doesn’t appreciate too much as to deindustrialize the country,” Marcos Verissimo, chief of staff at Brazil’s state development bank known as BNDES, said yesterday at a conference in Sao Paulo. “The capital goods industry has suffered tremendously.”....
“The dollar is weakening because the U.S. has the lowest short-term interest rates in the world will be the sell side of the carry trade as long as that remains true,” Chris Low, chief economist at FTN Financial in New York, wrote in a note to clients yesterday.....
‘Hard to Fight’
Brazil’s economy emerged from a recession in the second quarter, swinging to a 1.9 percent expansion after six months of contraction, a Sept. 11 report from the statistics agency showed. Six straight months of job growth, coupled with tax breaks and record low borrowing costs, pushed up consumer spending and helped Latin America’s largest economy rebound from the global financial crisis.
“I hear a lot of noise reflecting the government’s discomfort with the exchange rate, but it is hard to fight this,” said Rodrigo Azevedo, the monetary policy director of Brazil’s central bank from 2004 to 2007. “There is very little Brazil can do,” said Azevedo, who runs $1.8 billion at JGP SA in Rio de Janeiro, in an Oct. 16 interview.
To contact the reporter on this story:
Oliver Biggadike in New York at obiggadike@bloomberg.net
Matthew Brown in London at brown42@bloomberg.net
Last Updated: November 13, 2009 01:34 EST
Dollar Overwhelms Central Banks From Brazil to Korea
Nov. 13 (Bloomberg) -- Brazil, South Korea and Russia are losing the battle among developing nations to reduce gains in their currencies and keep exports competitive as the demand for their financial assets, driven by the slumping dollar, is proving more than central banks can handle."...
‘Suffered Tremendously’
Brazil’s real is up 1.6 percent this month, even after imposing a tax in October on foreign stock and bond investments and increasing foreign reserves by $9.5 billion in October in an effort to curb the currency’s appreciation. The real has risen 33 percent this year.
“We have to be careful that our exchange rate doesn’t appreciate too much as to deindustrialize the country,” Marcos Verissimo, chief of staff at Brazil’s state development bank known as BNDES, said yesterday at a conference in Sao Paulo. “The capital goods industry has suffered tremendously.”....
“The dollar is weakening because the U.S. has the lowest short-term interest rates in the world will be the sell side of the carry trade as long as that remains true,” Chris Low, chief economist at FTN Financial in New York, wrote in a note to clients yesterday.....
‘Hard to Fight’
Brazil’s economy emerged from a recession in the second quarter, swinging to a 1.9 percent expansion after six months of contraction, a Sept. 11 report from the statistics agency showed. Six straight months of job growth, coupled with tax breaks and record low borrowing costs, pushed up consumer spending and helped Latin America’s largest economy rebound from the global financial crisis.
“I hear a lot of noise reflecting the government’s discomfort with the exchange rate, but it is hard to fight this,” said Rodrigo Azevedo, the monetary policy director of Brazil’s central bank from 2004 to 2007. “There is very little Brazil can do,” said Azevedo, who runs $1.8 billion at JGP SA in Rio de Janeiro, in an Oct. 16 interview.
To contact the reporter on this story:
Oliver Biggadike in New York at obiggadike@bloomberg.net
Matthew Brown in London at brown42@bloomberg.net
Last Updated: November 13, 2009 01:34 EST
Dollar Overwhelms Central Banks From Brazil to Korea
View Waldemar Jezler's profile
Thursday, November 12, 2009
Brazil Currency Specialist to Join Finance Ministry, Valor Says
Nov. 12 (Bloomberg) -- Economist Emilio Garofalo Filho left the Brazilian central bank to work at the Finance Ministry, Valor Economico reported, without saying where it got the information.
Finance Minister Guido Mantega invited Garofalo, 56, to help design policies to contain the local currency’s appreciation against the dollar, according to the newspaper.
Calls by Bloomberg News to the Finance Ministry and the central bank weren’t answered before regular business hours.
To contact the reporter responsible for this story:
Camila Fontana in Sao Paulo at cfontana@bloomberg.net
Last Updated: November 12, 2009 04:51 EST
Brazil Currency Specialist to Join Finance Ministry, Valor Says
Finance Minister Guido Mantega invited Garofalo, 56, to help design policies to contain the local currency’s appreciation against the dollar, according to the newspaper.
Calls by Bloomberg News to the Finance Ministry and the central bank weren’t answered before regular business hours.
To contact the reporter responsible for this story:
Camila Fontana in Sao Paulo at cfontana@bloomberg.net
Last Updated: November 12, 2009 04:51 EST
Brazil Currency Specialist to Join Finance Ministry, Valor Says
Wednesday, November 11, 2009
Brazil Real May Rally 10% to 10-Year High: Technical Analysis
Nov. 11 (Bloomberg) -- Brazil’s real, the best-performing major currency in the world this year, may rally 10 percent to a 10-year high because government measures aren’t enough to stem gains, said Phil Roberts, a technical analyst at Barclays Plc.
The real will take out a decade high of 1.5545 per dollar reached in August 2008, a month before global credit markets seized up, Roberts said. He said that should the real begin to falter and decline to 1.7810 per dollar, it would signal that the rally that began in March would be ending.
The real has climbed 35 percent this year, more than all currencies Bloomberg tracks against the dollar after the Seychelles rupee. The real weakened 0.3 percent today to 1.7175 per dollar at 11:16 a.m. in New York.
This rally is “not over,” Roberts said in an interview from London. “Attempts to stop the appreciation of the real will have to be stronger.” ....
more: Brazil Real May Rally 10% to 10-Year High: Technical Analysis
To contact the reporter on this story: Tal Barak Harif in New York at tbarak@bloomberg.net
Last Updated: November 11, 2009 11:32 EST
The real will take out a decade high of 1.5545 per dollar reached in August 2008, a month before global credit markets seized up, Roberts said. He said that should the real begin to falter and decline to 1.7810 per dollar, it would signal that the rally that began in March would be ending.
The real has climbed 35 percent this year, more than all currencies Bloomberg tracks against the dollar after the Seychelles rupee. The real weakened 0.3 percent today to 1.7175 per dollar at 11:16 a.m. in New York.
This rally is “not over,” Roberts said in an interview from London. “Attempts to stop the appreciation of the real will have to be stronger.” ....
more: Brazil Real May Rally 10% to 10-Year High: Technical Analysis
To contact the reporter on this story: Tal Barak Harif in New York at tbarak@bloomberg.net
Last Updated: November 11, 2009 11:32 EST
Tuesday, November 10, 2009
Brazil, Mexico Debt May Be Rated Same by 2010 (Update2) - Bloomberg.com
Nov. 10 (Bloomberg) -- Brazil’s credit rating probably will be raised next year while Mexico’s will be cut, giving Latin America’s two biggest economies the same risk level for the first time, said Doug Smith, chief economist for the Americas at Standard Chartered Plc.
Smith said he expects ratings companies to lift Brazilian debt one grade as its diversified trade helps pull the economy out of recession faster than most developing countries. Mexico’s rating likely will be lowered one level as a reliance on U.S. export demand and oil sales slows its recovery, he said.
“It is about who is moving in the right direction and who is maybe not moving in the right direction,” Smith said at an event in New York. The two countries sharing the same rating “is something people wouldn’t think was particularly likely five years ago, but I think this is something we should expect in the middle of next year,” he said.
Brazil won an investment-grade rating of Baa3 from Moody’s Investors Service in September, putting it one level above high- yield or junk at all three major ratings companies. Standard & Poor’s and Fitch Ratings have a negative outlook on Mexico’s BBB+ rating, the third-lowest investment-grade, amid concern declining oil production will swell the country’s budget gap.
Brazil is also benefiting from prospects investment will increase ahead of the 2014 World Cup and the 2016 Olympics in the country, as well as the oil discoveries in its offshore fields. Brazil’s pre-salt finds, which lie beneath a layer of salt under the sea bed, include the biggest oilfield discovery in the Americas since 1976. The deposits may more than double Brazil’s proven reserves in three years."
more: Brazil, Mexico Debt May Be Rated Same by 2010
Smith said he expects ratings companies to lift Brazilian debt one grade as its diversified trade helps pull the economy out of recession faster than most developing countries. Mexico’s rating likely will be lowered one level as a reliance on U.S. export demand and oil sales slows its recovery, he said.
“It is about who is moving in the right direction and who is maybe not moving in the right direction,” Smith said at an event in New York. The two countries sharing the same rating “is something people wouldn’t think was particularly likely five years ago, but I think this is something we should expect in the middle of next year,” he said.
Brazil won an investment-grade rating of Baa3 from Moody’s Investors Service in September, putting it one level above high- yield or junk at all three major ratings companies. Standard & Poor’s and Fitch Ratings have a negative outlook on Mexico’s BBB+ rating, the third-lowest investment-grade, amid concern declining oil production will swell the country’s budget gap.
Brazil is also benefiting from prospects investment will increase ahead of the 2014 World Cup and the 2016 Olympics in the country, as well as the oil discoveries in its offshore fields. Brazil’s pre-salt finds, which lie beneath a layer of salt under the sea bed, include the biggest oilfield discovery in the Americas since 1976. The deposits may more than double Brazil’s proven reserves in three years."
more: Brazil, Mexico Debt May Be Rated Same by 2010
Rates Widen As Brazil Sells BRL833.7 Mln NTN-Bs At 6.16%-6.75% - WSJ.com
Rates Widen As Brazil Sells BRL833.7 Mln NTN-Bs At 6.16%-6.75%
BRASILIA (Dow Jones)--Brazil's federal treasury sold 833.7 million Brazilian reals ($487.83 million) worth of face-value NTN-B inflation-linked bonds of BRL1 billion on auction Tuesday at a slightly wider range of interest rates than seen at recent auctions.
The government sold bonds with six maturities ranging from November 2011, to May 2045 at average interest rates ranging from 6.16% to 6.75%. Those compared with rates of 6.24% to 6.67% at an auction of similar maturities held Oct. 20.
NTN-B bonds pay a rate equal to Brazil's official IPCA inflation rate plus an interest rate established at the auction.
Traders said the wider range of yields seen Tuesday reflected modest inflation and interest rate expectations seen over recent days.
Brazil's 12-month official IPCA index decelerated to 4.14% in mid-October from 4.34% through the end of September, while the country's reference Selic interest rate stood at 8.75% annually.
According to a weekly central bank market survey released Monday, IPCA inflation is seen ending 2010 at 4.46%, while the reference Selic rate is seen rising to 10.5% annually.
Brazil has set an annual inflation target through 2011 at 4.5%.
-By Gerald Jeffris, Dow Jones Newswires; (5561) 3335-0832; gerald.jeffris@dowjones.com"
BRASILIA (Dow Jones)--Brazil's federal treasury sold 833.7 million Brazilian reals ($487.83 million) worth of face-value NTN-B inflation-linked bonds of BRL1 billion on auction Tuesday at a slightly wider range of interest rates than seen at recent auctions.
The government sold bonds with six maturities ranging from November 2011, to May 2045 at average interest rates ranging from 6.16% to 6.75%. Those compared with rates of 6.24% to 6.67% at an auction of similar maturities held Oct. 20.
NTN-B bonds pay a rate equal to Brazil's official IPCA inflation rate plus an interest rate established at the auction.
Traders said the wider range of yields seen Tuesday reflected modest inflation and interest rate expectations seen over recent days.
Brazil's 12-month official IPCA index decelerated to 4.14% in mid-October from 4.34% through the end of September, while the country's reference Selic interest rate stood at 8.75% annually.
According to a weekly central bank market survey released Monday, IPCA inflation is seen ending 2010 at 4.46%, while the reference Selic rate is seen rising to 10.5% annually.
Brazil has set an annual inflation target through 2011 at 4.5%.
-By Gerald Jeffris, Dow Jones Newswires; (5561) 3335-0832; gerald.jeffris@dowjones.com"
Brazil Investigating Investment Tax Loopholes, Estado Reports
Nov. 10 (Bloomberg) -- Brazil’s Finance Ministry is investigating possible loopholes used by investors to avoid paying a new tax on foreign purchases of stocks and bonds, O Estado de Sao Paulo reported, citing an interview with a government official who declined to be identified.
The Finance Ministry is inclined to raise the tax rate from 2 percent and at the same time to eliminate the tax on purchases of stocks in initial public offerings, the person told Estado.
The Finance Ministry press office didn’t immediately return calls by Bloomberg News seeking comment.
To contact the reporter responsible for this story: Camila Fontana at cfontana@bloomberg.net
Last Updated: November 10, 2009 05:02 EST
Brazil Investigating Investment Tax Loopholes, Estado Reports - Bloomberg.com
The Finance Ministry is inclined to raise the tax rate from 2 percent and at the same time to eliminate the tax on purchases of stocks in initial public offerings, the person told Estado.
The Finance Ministry press office didn’t immediately return calls by Bloomberg News seeking comment.
To contact the reporter responsible for this story: Camila Fontana at cfontana@bloomberg.net
Last Updated: November 10, 2009 05:02 EST
Brazil Investigating Investment Tax Loopholes, Estado Reports - Bloomberg.com
Friday, November 6, 2009
Darling Seeks G-20 Plan to Deal With Asset Bubbles (Update2) - Bloomberg.com
Nov. 6 (Bloomberg) -- U.K. Chancellor of the Exchequer Alistair Darling said the Group of 20 nations should develop a way to tackle asset-price bubbles as the world’s leading economies recover.
“We have got to make sure we don’t get ourselves into a situation where some pressure starts to rise and then it becomes bigger and bigger and when the whole thing comes to an end it has catastrophic consequences,” Darling said in an interview with Bloomberg Television.
The comments help shape the agenda for a meeting of G-20 finance ministers hosted by Darling today in St. Andrews, Scotland. They echo calls from the International Monetary Fund and Nouriel Roubini, the New York University professor who predicted the crisis that began in 2007.
.... ‘Bubble-Building’
“We also have this concern,” Russian Finance Minister Alexei Kudrin said in an interview in London yesterday. “We need to be very careful with this huge amount of injected liquidity.”
Henrique Meirelles, the Brazilian central bank governor, told reporters on Nov. 3 in Oxford, England, that “there’s a need for international cooperation in preventing imbalances and bubble-building and some of that demands international regulation, symmetry of regulation among several countries.”
more: Darling Seeks G-20 Plan to Deal With Asset Bubbles (Update2) - Bloomberg.com
“We have got to make sure we don’t get ourselves into a situation where some pressure starts to rise and then it becomes bigger and bigger and when the whole thing comes to an end it has catastrophic consequences,” Darling said in an interview with Bloomberg Television.
The comments help shape the agenda for a meeting of G-20 finance ministers hosted by Darling today in St. Andrews, Scotland. They echo calls from the International Monetary Fund and Nouriel Roubini, the New York University professor who predicted the crisis that began in 2007.
.... ‘Bubble-Building’
“We also have this concern,” Russian Finance Minister Alexei Kudrin said in an interview in London yesterday. “We need to be very careful with this huge amount of injected liquidity.”
Henrique Meirelles, the Brazilian central bank governor, told reporters on Nov. 3 in Oxford, England, that “there’s a need for international cooperation in preventing imbalances and bubble-building and some of that demands international regulation, symmetry of regulation among several countries.”
more: Darling Seeks G-20 Plan to Deal With Asset Bubbles (Update2) - Bloomberg.com
Brazil May Exempt IPOs From Foreign Inflow Tax, Estado Reports
Nov. 6 (Bloomberg) -- Brazil’s Finance Minister Guido Mantega may exempt initial public offerings from a new 2 percent tax on foreign inflows while increasing the levy on other transactions, Estado reported, without saying how it got the information.
An increase in the inflow tax may be applied to other kinds of transactions in a bid to stem the real’s rally against the dollar, the Sao Paulo-based newspaper reported.
The Finance Ministry didn’t immediately return calls by Bloomberg News seeking comment.
To contact the reporter on this story: Francisco Marcelino in Sao Paulo at mdeoliveira@bloomberg.net
Last Updated: November 6, 2009 07:14 EST
Brazil May Exempt IPOs From Foreign Inflow Tax, Estado Reports - Bloomberg.com
An increase in the inflow tax may be applied to other kinds of transactions in a bid to stem the real’s rally against the dollar, the Sao Paulo-based newspaper reported.
The Finance Ministry didn’t immediately return calls by Bloomberg News seeking comment.
To contact the reporter on this story: Francisco Marcelino in Sao Paulo at mdeoliveira@bloomberg.net
Last Updated: November 6, 2009 07:14 EST
Brazil May Exempt IPOs From Foreign Inflow Tax, Estado Reports - Bloomberg.com
Brazil Government To Inject BRL100 Billion In BNDES -Report - WSJ.com
SAO PAULO (Dow Jones)--The Brazilian government will inject another 100 billion Brazilian reals ($58 billion) into the state-controlled Brazilian Development Bank, or BNDES, Brazilian President Luiz Inacio Lula da Silva said in a exclusive interview published Friday by local newspaper Valor Economico.
The capital injection will be used by the BNDES to increase its lending to domestic companies, especialy for long-term investments projects.
Earlier this year, the government injected BRL100 billion into the BNDES for short- and long-term lending to companies.
-By Rogerio Jelmayer,
NOVEMBER 6, 2009, 6:10 A.M. ET
Brazil Government To Inject BRL100 Billion In BNDES -Report - WSJ.com
The capital injection will be used by the BNDES to increase its lending to domestic companies, especialy for long-term investments projects.
Earlier this year, the government injected BRL100 billion into the BNDES for short- and long-term lending to companies.
-By Rogerio Jelmayer,
NOVEMBER 6, 2009, 6:10 A.M. ET
Brazil Government To Inject BRL100 Billion In BNDES -Report - WSJ.com
Thursday, November 5, 2009
Mantega Says Brazil Inflow Tax to Help Avoid ‘Bubble’
By Laura Price and Juan Pablo Spinetto
Nov. 5 (Bloomberg) -- Brazilian Finance Minister Guido Mantega said the country’s 2 percent tax on some capital inflows will help prevent the formation of an asset “bubble.” [more: Mantega Says Brazil Inflow Tax to Help Avoid ‘Bubble’]
Nov. 5 (Bloomberg) -- Brazilian Finance Minister Guido Mantega said the country’s 2 percent tax on some capital inflows will help prevent the formation of an asset “bubble.” [more: Mantega Says Brazil Inflow Tax to Help Avoid ‘Bubble’]
Brazil to Propose Measures on Exchange Rates at G20, Folha Says
By Andre Soliani
Nov. 5 (Bloomberg) -- Brazil will propose to the Group of 20 countries measures to avoid overvaluation of the Brazilian, Australian, New Zealander and South African currencies against the U.S. dollar and the Chinese yuan, Folha de Sao Paulo reported, citing Finance Minister Guido Mantega. Mantega told the Sao Paulo-based newspaper that investors are shifting money to commodity exporting economies because rich nations are paying low interest rates.
The government’s 2 percent tax on foreign purchases of fixed income securities and equities is helping contain stock and currency gains, Folha reported Mantega as saying.
To contact the reporter on this story: Andre Soliani in Brasilia at asoliani@bloomberg.net
Last Updated: November 5, 2009 07:08 EST
Brazil to Propose Measures on Exchange Rates at G20, Folha Says - Bloomberg.com
Wednesday, November 4, 2009
Brazil Real Needs to Drop 19% for Sustained Growth, Barbosa Says
By Fabiola Moura
Nov. 4 (Bloomberg) -- Brazil’s currency needs to weaken as much as 19 percent for sustainable economic growth, said Nelson Barbosa, the Brazilian Finance Ministry’s top policy adviser.
The real needs to be at 2.1 to 2.12 per U.S. dollar for growth, Barbosa told reporters at an event in New York. The currency traded at 1.7237 per dollar at 11:10 a.m. New York time.
To contact the reporter on this story: Fabiola Moura in New York at fdemoura@bloomberg.net
Last Updated: November 4, 2009 11:16 EST
Brazil Real Needs to Drop 19% for Sustained Growth, Barbosa Says
Nov. 4 (Bloomberg) -- Brazil’s currency needs to weaken as much as 19 percent for sustainable economic growth, said Nelson Barbosa, the Brazilian Finance Ministry’s top policy adviser.
The real needs to be at 2.1 to 2.12 per U.S. dollar for growth, Barbosa told reporters at an event in New York. The currency traded at 1.7237 per dollar at 11:10 a.m. New York time.
To contact the reporter on this story: Fabiola Moura in New York at fdemoura@bloomberg.net
Last Updated: November 4, 2009 11:16 EST
Brazil Real Needs to Drop 19% for Sustained Growth, Barbosa Says
Brazil Banco Fibra Raises $110M From Bonds Issue - WSJ.com
Brazil Banco Fibra Raises $110M From Bonds Issue
SAO PAULO (Dow Jones)--Small Brazil bank Banco Fibra raised $110 million from the issue of bonds overseas, a person involved in the operation told Dow Jones Newswires on Wednesday.
The bonds will carry a seven-year maturity and will pay an annual yield of 8.5%. Goldman Sachs coordinated the operation.
Fibra was founded in 1988 and is controlled by the Steinbruch family, which has interests in the textile, steel and real estate sectors.
-By Rogerio Jelmayer, Dow Jones Newswires; 5511-2847-4521; rogerio.jelmayer@dowjones.com"
SAO PAULO (Dow Jones)--Small Brazil bank Banco Fibra raised $110 million from the issue of bonds overseas, a person involved in the operation told Dow Jones Newswires on Wednesday.
The bonds will carry a seven-year maturity and will pay an annual yield of 8.5%. Goldman Sachs coordinated the operation.
Fibra was founded in 1988 and is controlled by the Steinbruch family, which has interests in the textile, steel and real estate sectors.
-By Rogerio Jelmayer, Dow Jones Newswires; 5511-2847-4521; rogerio.jelmayer@dowjones.com"
Brazil Removal of Outflow Barriers Is ‘Inevitable,’ WestLB Says - Bloomberg.com
Brazil Removal of Outflow Barriers Is ‘Inevitable,’ WestLB Says
By Camila Fontana
Nov. 4 (Bloomberg) -- The removal of barriers to the outflow of dollars from Brazil is inevitable, said Ures Folchini, executive vice-president of local markets at Banco WestLB do Brasil.
Central bank President Henrique Meirelles said late yesterday that Brazil is conducting studies to remove “artificial impediments” to outflows of foreign currencies.
Meirelles, speaking at an event in Oxford, U.K., said the country needs to “modernize” its exchange rate system.
The Brazilian real is the best performer against the dollar this year among 26 emerging-market currencies tracked by Bloomberg, with a 34 percent gain.
The real rose 0.7 percent to 1.7330 per U.S. dollar at 7:57 a.m. New York time, from 1.7446 yesterday.
WestLB predicts the real will finish the year at 1.65 per dollar. Folchini spoke in a phone interview from Sao Paulo.
On the proposal by the central bank:
“This is an inevitable step that is seen as an advancement by the market. Our economy is becoming increasingly important.
“You know you can get out if you need to. You get more comfortable to invest, that helps the real to go up.”
On the real’s direction:
“The real is following the trend of other currencies against the dollar, with smaller or greater intensity. Even the measures that were taken by the government to curb gains won’t interrupt this trend.”
On capital flows into Brazilian securities:
“The window for companies to issue bonds is very large.”
To contact the reporter on this story: Camila Fontana Correa in Sao Paulo at cfontana@bloomberg.net
Last Updated: November 4, 2009 08:04 EST"
By Camila Fontana
Nov. 4 (Bloomberg) -- The removal of barriers to the outflow of dollars from Brazil is inevitable, said Ures Folchini, executive vice-president of local markets at Banco WestLB do Brasil.
Central bank President Henrique Meirelles said late yesterday that Brazil is conducting studies to remove “artificial impediments” to outflows of foreign currencies.
Meirelles, speaking at an event in Oxford, U.K., said the country needs to “modernize” its exchange rate system.
The Brazilian real is the best performer against the dollar this year among 26 emerging-market currencies tracked by Bloomberg, with a 34 percent gain.
The real rose 0.7 percent to 1.7330 per U.S. dollar at 7:57 a.m. New York time, from 1.7446 yesterday.
WestLB predicts the real will finish the year at 1.65 per dollar. Folchini spoke in a phone interview from Sao Paulo.
On the proposal by the central bank:
“This is an inevitable step that is seen as an advancement by the market. Our economy is becoming increasingly important.
“You know you can get out if you need to. You get more comfortable to invest, that helps the real to go up.”
On the real’s direction:
“The real is following the trend of other currencies against the dollar, with smaller or greater intensity. Even the measures that were taken by the government to curb gains won’t interrupt this trend.”
On capital flows into Brazilian securities:
“The window for companies to issue bonds is very large.”
To contact the reporter on this story: Camila Fontana Correa in Sao Paulo at cfontana@bloomberg.net
Last Updated: November 4, 2009 08:04 EST"
Tuesday, November 3, 2009
Vale Sells $1 Billion of 30-Year Bonds in Overseas Markets
By Veronica Navarro Espinosa
Nov. 3 (Bloomberg) -- Vale SA, the Rio de Janeiro-based company that is the world’s largest iron-ore producer, sold $1 billion of 30-year bonds in its second overseas dollar note offering this year.
Vale sold the bonds to yield 2.65 percentage points above similar-maturity U.S. Treasuries, according to Bloomberg data. Deutsche Bank AG, HSBC Holdings Plc and JPMorgan Chase & Co. arranged the offering, Vale said in a filing to Brazil’s securities regulator."
more: Vale Sells $1 Billion of 30-Year Bonds in Overseas Markets
Nov. 3 (Bloomberg) -- Vale SA, the Rio de Janeiro-based company that is the world’s largest iron-ore producer, sold $1 billion of 30-year bonds in its second overseas dollar note offering this year.
Vale sold the bonds to yield 2.65 percentage points above similar-maturity U.S. Treasuries, according to Bloomberg data. Deutsche Bank AG, HSBC Holdings Plc and JPMorgan Chase & Co. arranged the offering, Vale said in a filing to Brazil’s securities regulator."
more: Vale Sells $1 Billion of 30-Year Bonds in Overseas Markets
Vale to Sell 30-Year Bonds in Overseas Markets Today
By Veronica Navarro Espinosa
Nov. 3 (Bloomberg) -- Vale SA, the Rio de Janeiro-based company that is the world’s largest iron-ore producer, plans to sell benchmark bonds today in its second overseas dollar note offering this year, said a person familiar with the transaction.
Vale may sell the bonds to yield 2.70 percentage points above similar-maturity U.S. Treasuries, said the person, who declined to be identified because terms aren’t set. A benchmark issue is typically for at least $500 million. Deutsche Bank AG, HSBC Holdings Plc and JPMorgan Chase & Co. are arranging the offering, Vale said in a filing to Brazil’s securities regulator."
more: Vale to Sell 30-Year Bonds in Overseas Markets Today (Update3) - Bloomberg.com:
Nov. 3 (Bloomberg) -- Vale SA, the Rio de Janeiro-based company that is the world’s largest iron-ore producer, plans to sell benchmark bonds today in its second overseas dollar note offering this year, said a person familiar with the transaction.
Vale may sell the bonds to yield 2.70 percentage points above similar-maturity U.S. Treasuries, said the person, who declined to be identified because terms aren’t set. A benchmark issue is typically for at least $500 million. Deutsche Bank AG, HSBC Holdings Plc and JPMorgan Chase & Co. are arranging the offering, Vale said in a filing to Brazil’s securities regulator."
more: Vale to Sell 30-Year Bonds in Overseas Markets Today (Update3) - Bloomberg.com:
Brazil's central bank calls auction to buy dollars
SAO PAULO, Nov 3 (Reuters) - Brazil's central bank offered to buy dollars on the spot foreign exchange market on Tuesday in an ongoing effort to boost international reserves and soak up greenbacks pouring into the economy.
The bank has bought about $20.78 billion on the spot market since May 8, including $6.518 billion in the month of October through Oct. 23, to soak up dollar liquidity and prevent further appreciation of Brazil's currency, the real.
Brazil's currency (BRBY) was trading 0.17 percent stronger at 1.753 per U.S. dollar shortly after the central bank's announcement. (Reporting by Silvio Cascione; Writing by Luciana Lopez; Editing by Andrea Ricci)
Brazil's central bank calls auction to buy dollars
Tue Nov 3, 2009 12:16pm EST
The bank has bought about $20.78 billion on the spot market since May 8, including $6.518 billion in the month of October through Oct. 23, to soak up dollar liquidity and prevent further appreciation of Brazil's currency, the real.
Brazil's currency (BRBY) was trading 0.17 percent stronger at 1.753 per U.S. dollar shortly after the central bank's announcement. (Reporting by Silvio Cascione; Writing by Luciana Lopez; Editing by Andrea Ricci)
Brazil's central bank calls auction to buy dollars
Tue Nov 3, 2009 12:16pm EST
Lula Says Brazil Assessing ‘Permanent Solution’ for Tax Cuts
Lula Says Brazil Assessing ‘Permanent Solution’ for Tax Cuts - Bloomberg.com:
By Iuri Dantas
Nov. 3 (Bloomberg) -- Brazilian President Luiz Inacio Lula da Silva said the Finance Ministry and the country’s consumer products manufacturers are discussing a “permanent solution” regarding tax cuts on home appliances.
The government is proceeding with “caution” as declining tax collection this year won’t be allowed to endanger “social programs and investment,” Lula said in his weekly newspaper column published on the presidency’s Web site.
“A more permanent solution is being discussed by the Finance Ministry” and industry representatives, Lula said. “Caution is needed.”
Finance Minister Guido Mantega on Oct. 29 announced that the government had decided to extend tax cuts on energy- efficient appliances for three months and might consider additional measures, without elaborating.
To contact the reporter on this story:’ Iuri Dantas in Brasilia at idantas@bloomberg.net
Last Updated: November 3, 2009 09:54 EST"
By Iuri Dantas
Nov. 3 (Bloomberg) -- Brazilian President Luiz Inacio Lula da Silva said the Finance Ministry and the country’s consumer products manufacturers are discussing a “permanent solution” regarding tax cuts on home appliances.
The government is proceeding with “caution” as declining tax collection this year won’t be allowed to endanger “social programs and investment,” Lula said in his weekly newspaper column published on the presidency’s Web site.
“A more permanent solution is being discussed by the Finance Ministry” and industry representatives, Lula said. “Caution is needed.”
Finance Minister Guido Mantega on Oct. 29 announced that the government had decided to extend tax cuts on energy- efficient appliances for three months and might consider additional measures, without elaborating.
To contact the reporter on this story:’ Iuri Dantas in Brasilia at idantas@bloomberg.net
Last Updated: November 3, 2009 09:54 EST"
Friday, October 30, 2009
Brazil Sept. Budget Deficit Widens to Nine-Month High (Update3) - Bloomberg.com
Brazil Sept. Budget Deficit Widens to Nine-Month High (Update3) - Bloomberg.com:
By Andre Soliani and Joshua Goodman
Oct. 30 (Bloomberg) -- Brazil’s budget deficit widened more than expected in September to a nine-month high as the government carried out its stimulus plan amid falling revenue.
The deficit, including the federal government, local governments and state companies, widened to 22.4 billion ($13 billion) from 8.16 billion reais in August, the central bank said in a report distributed today in Brasilia. Analysts expected a gap of 12 billion reais, according to the median of three forecasts in a Bloomberg survey. It was the widest gap for the month of September since the series started in 2001." [more...]
By Andre Soliani and Joshua Goodman
The deficit, including the federal government, local governments and state companies, widened to 22.4 billion ($13 billion) from 8.16 billion reais in August, the central bank said in a report distributed today in Brasilia. Analysts expected a gap of 12 billion reais, according to the median of three forecasts in a Bloomberg survey. It was the widest gap for the month of September since the series started in 2001." [more...]
Brazil Corporate Debt Fund to Raise $1.67 Billion, Valor Says
Brazil Corporate Debt Fund to Raise $1.67 Billion, Valor Says - Bloomberg.com:
By Camila Fontana
Oct. 30 (Bloomberg) -- Credit Suisse Group AG and Banco Santander SA’s Brazilian units together launched a corporate debt fund aiming to raise as much as 2.9 billion reais ($1.67 billion), Valor Economico reported, citing an interview with Jean-Pierre Cote Gil, the Standard & Poor’s executive in charge of rating the fund’s shares.
The minimum investment in the fund is 1 million reais, and companies will be able to borrow up to 350 million reais, the Sao Paulo-based newspaper reported.
To contact the reporter on this story: Camila Fontana Correa in Sao Paulo at cfontana@bloomberg.net.
Last Updated: October 30, 2009 06:51 EDT"
By Camila Fontana
Oct. 30 (Bloomberg) -- Credit Suisse Group AG and Banco Santander SA’s Brazilian units together launched a corporate debt fund aiming to raise as much as 2.9 billion reais ($1.67 billion), Valor Economico reported, citing an interview with Jean-Pierre Cote Gil, the Standard & Poor’s executive in charge of rating the fund’s shares.
The minimum investment in the fund is 1 million reais, and companies will be able to borrow up to 350 million reais, the Sao Paulo-based newspaper reported.
To contact the reporter on this story: Camila Fontana Correa in Sao Paulo at cfontana@bloomberg.net.
Last Updated: October 30, 2009 06:51 EDT"
Wednesday, October 28, 2009
Itau Europa to Sell Three-Year Real-Linked Notes (Update2) - Bloomberg.com
Itau Europa to Sell Three-Year Real-Linked Notes (Update2) - Bloomberg.com:
By Camila Fontana
Oct. 28 (Bloomberg) -- Itau Unibanco Holding SA’s European unit plans to sell as much as $100 million of real-linked structured notes this week.
The unit of Brazil’s biggest non-government bank, known as Banco Itau Europa, will sell the three-year securities at an interest rate of 10.5 percent in a private placement, said Mauro Morelli, a member of the company’s executive board. The dollar- denominated notes will be linked to the real, meaning interest and principal payments will fluctuate with movements in Brazil’s currency.
Itau is tapping into demand from investors looking to buy real-based assets without having to pay a 2 percent tax Brazil implemented last week on foreigners’ purchases of stocks and fixed-income assets, Morelli said. The government imposed the tax, known as IOF, in a bid to contain a rally that has made the real the best-performing major currency this year.
“We are issuing to meet demand from investors who want exposure to the real and need an alterative to the IOF in Brazil,” Morelli said in a telephone interview from Lisbon.
To contact the reporter on this story: Camila Fontana Correa in Sao Paulo at cfontana@bloomberg.net
Last Updated: October 28, 2009 17:02 EDT"
By Camila Fontana
Oct. 28 (Bloomberg) -- Itau Unibanco Holding SA’s European unit plans to sell as much as $100 million of real-linked structured notes this week.
The unit of Brazil’s biggest non-government bank, known as Banco Itau Europa, will sell the three-year securities at an interest rate of 10.5 percent in a private placement, said Mauro Morelli, a member of the company’s executive board. The dollar- denominated notes will be linked to the real, meaning interest and principal payments will fluctuate with movements in Brazil’s currency.
Itau is tapping into demand from investors looking to buy real-based assets without having to pay a 2 percent tax Brazil implemented last week on foreigners’ purchases of stocks and fixed-income assets, Morelli said. The government imposed the tax, known as IOF, in a bid to contain a rally that has made the real the best-performing major currency this year.
“We are issuing to meet demand from investors who want exposure to the real and need an alterative to the IOF in Brazil,” Morelli said in a telephone interview from Lisbon.
To contact the reporter on this story: Camila Fontana Correa in Sao Paulo at cfontana@bloomberg.net
Last Updated: October 28, 2009 17:02 EDT"
Monday, October 26, 2009
Brazil’s Real Falls on Speculation Government May Curb Gains - Bloomberg.com
Brazil’s Real Falls on Speculation Government May Curb Gains - Bloomberg.com
By Camila Fontana
Oct. 26 (Bloomberg) -- Brazil’s real slid for the first time in four days on speculation the government may take additional steps to curb the currency’s rally.
The real dropped 1 percent to 1.7350 per U.S. dollar at 3:08 p.m. New York time, from 1.7173 on Oct. 23. The decline cut the currency’s appreciation this year to 33 percent. Last week the government imposed a 2 percent tax on foreign purchases of stocks and fixed-income securities.
“The market is wondering what the government is going to do after we break the 1.7 barrier,” said Paulo Petrassi, manager of fixed income investments at Leme Investimentos. The government may increase the tax rate on foreign inflows, he said in a phone interview from Florianopolis.
A spokeswoman from the Finance Ministry in Brasilia who declined to give her name said new measures to contain the real’s gains are not off the table, but that no announcement is imminent.
Brazilian authorities will most likely use the country’s sovereign fund to buy dollars in an effort to stop the currency from climbing even further, said Antonio Madeira, chief economist at MCM Consultores Associados in Sao Paulo.
Fixed income manager Rafael Correia of GAP Asset Management said in a phone interview from Rio de Janeiro that if the Brazilian currency reaches 1.8 per dollar, it will be a good opportunity to buy reais again.
The real opened higher and reached 1.7020 in early trading. The proximity to 1.7 prompted many local investors to buy dollars to prevent losses, said Roberto Kropp, a director at Daycoval Asset Management in an interview from Sao Paulo. The central bank bought dollars in the spot market today for 1.7059 reais each.
In the overnight interest-rates futures market, the yield on the contract due January 2011 rose four basis points, or 0.04 percentage point, to 10.28 percent, according to Bloomberg data.
To contact the reporter responsible for this story: Camila Fontana at cfontana@bloomberg.net
Last Updated: October 26, 2009 15:24 EDT"
By Camila Fontana
Oct. 26 (Bloomberg) -- Brazil’s real slid for the first time in four days on speculation the government may take additional steps to curb the currency’s rally.
The real dropped 1 percent to 1.7350 per U.S. dollar at 3:08 p.m. New York time, from 1.7173 on Oct. 23. The decline cut the currency’s appreciation this year to 33 percent. Last week the government imposed a 2 percent tax on foreign purchases of stocks and fixed-income securities.
“The market is wondering what the government is going to do after we break the 1.7 barrier,” said Paulo Petrassi, manager of fixed income investments at Leme Investimentos. The government may increase the tax rate on foreign inflows, he said in a phone interview from Florianopolis.
A spokeswoman from the Finance Ministry in Brasilia who declined to give her name said new measures to contain the real’s gains are not off the table, but that no announcement is imminent.
Brazilian authorities will most likely use the country’s sovereign fund to buy dollars in an effort to stop the currency from climbing even further, said Antonio Madeira, chief economist at MCM Consultores Associados in Sao Paulo.
Fixed income manager Rafael Correia of GAP Asset Management said in a phone interview from Rio de Janeiro that if the Brazilian currency reaches 1.8 per dollar, it will be a good opportunity to buy reais again.
The real opened higher and reached 1.7020 in early trading. The proximity to 1.7 prompted many local investors to buy dollars to prevent losses, said Roberto Kropp, a director at Daycoval Asset Management in an interview from Sao Paulo. The central bank bought dollars in the spot market today for 1.7059 reais each.
In the overnight interest-rates futures market, the yield on the contract due January 2011 rose four basis points, or 0.04 percentage point, to 10.28 percent, according to Bloomberg data.
To contact the reporter responsible for this story: Camila Fontana at cfontana@bloomberg.net
Last Updated: October 26, 2009 15:24 EDT"
Fibria Sells $1 Billion of 10-Year Bonds to Yield 9.375 Percent - Bloomberg.com
Fibria Sells $1 Billion of 10-Year Bonds to Yield 9.375 Percent - Bloomberg.com
By Veronica Navarro Espinosa
Oct. 26 (Bloomberg) -- Fibria, the world’s biggest pulp maker formed by Votorantim Celulose & Papel SA’s takeover of Aracruz Celulose SA, sold $1 billion of 10-year.
The Sao-Paulo based company issued the bonds to yield 9.375 percent, according to Bloomberg data. Bank of America Corp., Deutsche Bank AG and JPMorgan Chase & Co. arranged the bond sale, according to a person familiar with the transaction who asked not to be identified because he’s not authorized to speak publicly.
Fibria was formed when VCP rescued Aracruz after it reported $2.13 billion in losses on currency derivatives. Proceeds from the bond sale would be used to “pre-pay existing derivatives-related debt” at Aracruz, Moody’s Investors Service said Oct. 16. Moody’s rated the notes Ba1, one level below investment grade.
Rodrigo Bueno, a spokesman at Fibria, declined to comment on the sale.
Fibria is selling bonds overseas as a recovery in Latin America’s biggest economy boosts demand for Brazilian corporate debt. Last week Petroleo Brasileiro SA, Brazil’s state- controlled oil producer, sold $4 billion of bonds while Tam SA, the country’s biggest airline by passengers carried, sold $300 million of 10-year notes.
To contact the reporter on this story: Veronica Navarro Espinosa in New York at vespinosa@bloomberg.net"
By Veronica Navarro Espinosa
Oct. 26 (Bloomberg) -- Fibria, the world’s biggest pulp maker formed by Votorantim Celulose & Papel SA’s takeover of Aracruz Celulose SA, sold $1 billion of 10-year.
The Sao-Paulo based company issued the bonds to yield 9.375 percent, according to Bloomberg data. Bank of America Corp., Deutsche Bank AG and JPMorgan Chase & Co. arranged the bond sale, according to a person familiar with the transaction who asked not to be identified because he’s not authorized to speak publicly.
Fibria was formed when VCP rescued Aracruz after it reported $2.13 billion in losses on currency derivatives. Proceeds from the bond sale would be used to “pre-pay existing derivatives-related debt” at Aracruz, Moody’s Investors Service said Oct. 16. Moody’s rated the notes Ba1, one level below investment grade.
Rodrigo Bueno, a spokesman at Fibria, declined to comment on the sale.
Fibria is selling bonds overseas as a recovery in Latin America’s biggest economy boosts demand for Brazilian corporate debt. Last week Petroleo Brasileiro SA, Brazil’s state- controlled oil producer, sold $4 billion of bonds while Tam SA, the country’s biggest airline by passengers carried, sold $300 million of 10-year notes.
To contact the reporter on this story: Veronica Navarro Espinosa in New York at vespinosa@bloomberg.net"
BRL Bonds Run
BRL Bonds Run
Prices are indicative only
Bid Ask B A Bid Ask
Security Px Px SZ SZ YTM YTM Notes
--------------------------------------------------------------------------------
BANVOR 10⅝ 14 101.000-104.000 2x 10.34/ 9.50
BANVOR 16.2 10 105.500-107.500 2x2 10.48/ 8.57
KFW 12 10 101.750-102.750 2x2 8.34/ 6.62
RBSPAR 11¼ 17 84.000- 89.000 2x 14.81/13.60
BANSAF 10⅞ 17 93.000- 98.000 2x 12.34/11.28
CESPBZ 9¾ 15 69.450- 70.700 2x2 9.46/ 8.98 9.51/9.03
SANTAN 16.2 10 101.625-102.375 2x2 9.88/ 7.75
BRAZIL 12½ 16 114.500-115.500 2x2 9.35/ 9.16
BRAZIL 12½ 22 113.750-114.750 2x2 10.47/10.34
BRAZIL 10¼ 28 100.000-101.000 2x2 10.25/10.12
BRAZIL 5YR Sen 125.000-135.000 Reference Only
BRAZILIAN REAL BRL Ref 1.7080
Prices are indicative only
Bid Ask B A Bid Ask
Security Px Px SZ SZ YTM YTM Notes
--------------------------------------------------------------------------------
BANVOR 10⅝ 14 101.000-104.000 2x 10.34/ 9.50
BANVOR 16.2 10 105.500-107.500 2x2 10.48/ 8.57
KFW 12 10 101.750-102.750 2x2 8.34/ 6.62
RBSPAR 11¼ 17 84.000- 89.000 2x 14.81/13.60
BANSAF 10⅞ 17 93.000- 98.000 2x 12.34/11.28
CESPBZ 9¾ 15 69.450- 70.700 2x2 9.46/ 8.98 9.51/9.03
SANTAN 16.2 10 101.625-102.375 2x2 9.88/ 7.75
BRAZIL 12½ 16 114.500-115.500 2x2 9.35/ 9.16
BRAZIL 12½ 22 113.750-114.750 2x2 10.47/10.34
BRAZIL 10¼ 28 100.000-101.000 2x2 10.25/10.12
BRAZIL 5YR Sen 125.000-135.000 Reference Only
BRAZILIAN REAL BRL Ref 1.7080
Saturday, October 24, 2009
Petrobras $4 billion bond issue Brazil's largest since 2000
Petrobras $4 billion bond issue Brazil's largest since 2000 - MarketWatch
Oct. 24, 2009, 10:19 a.m. EDT
By Riva Froymovich
NEW YORK (MarketWatch) -- Brazilian state-run energy company Petroleo Brasileiro S.A., or Petrobras, sold a total of $4 billion in bonds Friday in two parts, the largest debt sale out of Brazil since the start of this decade.
Massive interest in the issue comes despite a new Brazilian tax law announced Monday, which levies a 2% tax on foreign investment in local equities and fixed-income assets in order to slow appreciation in the real against the dollar.
'That has not filtered into the appetite for Brazilian risk,' said Enrique Alvarez, head of Latin America fixed-income research at IDEAglobal in New York.
Alvarez noted that outstanding debt on Brazil's reference 2040 bond is $4 billion, equal to the combined size of the Petrobras deal.
This is just another sign that, despite the slew of fresh issuance out of emerging markets this year, appetite remains healthy following a glut during the height of the financial crisis. Debt out of Brazil is all the more attractive now, after Moody's Investors Service upgraded Brazil to investment-grade last month, more than a year after Standard & Poor's and Fitch Rating did the same.
Brazilian companies can now take advantage of this status, particularly companies with the implicit backing of the state, such as Petrobras, to issue longer-dated maturities.
Petrobras sold $2.5 billion in 10-year notes Friday at 238.5 basis points over Treasurys to yield 5.875%. It sold $1.5 billion in 30-year notes at 270.6 basis points over Treasurys to yield 7.0%--and it could have sold more.
The ratings on the bonds were Baa1 by Moody's Investors Service, BBB- by Standard & Poor's and BBB by Fitch Ratings.
Both offerings were oversubscribed. Demand for the 10-year notes came in at about $7.5 billion and $4 billion for the 30-year notes.
This is the largest-ever bond issue for a Brazilian company, breaking the title held by giant miner Companhia Vale do Rio Doce (RIO), which sold $3.75 billion in November 2006. It is the second-largest issue for any Latin American company, after Venezuelan PdVSA’s $7.5 billion multi-tranche bond sale in 2007.
But, as a quasi-sovereign firm, analysts say it would be fairer to compare the size of this issue to Brazilian sovereign debt. And still, this is one for the record books. It marks the largest bond sale since Brazil's 2000 issuance of more than $5 billion in debt.
Most investors came from the U.S--about 65% of demand for the 10-year note and 80% for the 30-year bonds. European investors made up 65% of the bids for the shorter-dated bonds, and 13% for the longer-dated ones. Asia bid for about $500 million in the 10-years and asked for about 7% of the 30-years.
Petrobras' attraction now is also tied to their recent discovery of a large offshore light-oil reserves in the subsalt layer off the coast of the southeastern state of Espirito Santo.
'This find is playing a big role in such a large and successful offering,' said Alvarez. 'Knowing that Petrobras is going to need more financing going forward...you can expect subsequent amounts years out.'
The success of this issue is evidence that gaining additional sources of revenue through new debt won't be a problem, he said, as long as oil prices remain near normal historical rice levels.
Earlier this week, Petrobras said that it planned to issue the bond in an effort to pay down a $6.5 billion bridge loan it received earlier this year.
The bonds were issued through the company's international subsidiary, Petrobras International Finance Company, or Pifco.
The company has accessed the international debt market two times so far this year. In February, the company raised $1.5 billion with a 10-year overseas bond issue. In June, Petrobras raised $1.25 billion with paper of the same maturity.
The risk premium on Brazilian debt strengthened Friday on JPMorgan's Emerging Markets Bond Index Global. It was three basis points tighter at 219 basis points over Treasurys. However, the return on the index was down 0.45% amid this new supply. Brazil's benchmark bond, the Global 2040, lost 1 3/8 to 133 bid, according to Reuters.
The overall Embig was nine basis points tighter at 309 basis points over Treasurys in late afternoon trading. The index lost 0.17% on the day."
Oct. 24, 2009, 10:19 a.m. EDT
By Riva Froymovich
NEW YORK (MarketWatch) -- Brazilian state-run energy company Petroleo Brasileiro S.A., or Petrobras, sold a total of $4 billion in bonds Friday in two parts, the largest debt sale out of Brazil since the start of this decade.
Massive interest in the issue comes despite a new Brazilian tax law announced Monday, which levies a 2% tax on foreign investment in local equities and fixed-income assets in order to slow appreciation in the real against the dollar.
'That has not filtered into the appetite for Brazilian risk,' said Enrique Alvarez, head of Latin America fixed-income research at IDEAglobal in New York.
Alvarez noted that outstanding debt on Brazil's reference 2040 bond is $4 billion, equal to the combined size of the Petrobras deal.
This is just another sign that, despite the slew of fresh issuance out of emerging markets this year, appetite remains healthy following a glut during the height of the financial crisis. Debt out of Brazil is all the more attractive now, after Moody's Investors Service upgraded Brazil to investment-grade last month, more than a year after Standard & Poor's and Fitch Rating did the same.
Brazilian companies can now take advantage of this status, particularly companies with the implicit backing of the state, such as Petrobras, to issue longer-dated maturities.
Petrobras sold $2.5 billion in 10-year notes Friday at 238.5 basis points over Treasurys to yield 5.875%. It sold $1.5 billion in 30-year notes at 270.6 basis points over Treasurys to yield 7.0%--and it could have sold more.
The ratings on the bonds were Baa1 by Moody's Investors Service, BBB- by Standard & Poor's and BBB by Fitch Ratings.
Both offerings were oversubscribed. Demand for the 10-year notes came in at about $7.5 billion and $4 billion for the 30-year notes.
This is the largest-ever bond issue for a Brazilian company, breaking the title held by giant miner Companhia Vale do Rio Doce (RIO), which sold $3.75 billion in November 2006. It is the second-largest issue for any Latin American company, after Venezuelan PdVSA’s $7.5 billion multi-tranche bond sale in 2007.
But, as a quasi-sovereign firm, analysts say it would be fairer to compare the size of this issue to Brazilian sovereign debt. And still, this is one for the record books. It marks the largest bond sale since Brazil's 2000 issuance of more than $5 billion in debt.
Most investors came from the U.S--about 65% of demand for the 10-year note and 80% for the 30-year bonds. European investors made up 65% of the bids for the shorter-dated bonds, and 13% for the longer-dated ones. Asia bid for about $500 million in the 10-years and asked for about 7% of the 30-years.
Petrobras' attraction now is also tied to their recent discovery of a large offshore light-oil reserves in the subsalt layer off the coast of the southeastern state of Espirito Santo.
'This find is playing a big role in such a large and successful offering,' said Alvarez. 'Knowing that Petrobras is going to need more financing going forward...you can expect subsequent amounts years out.'
The success of this issue is evidence that gaining additional sources of revenue through new debt won't be a problem, he said, as long as oil prices remain near normal historical rice levels.
Earlier this week, Petrobras said that it planned to issue the bond in an effort to pay down a $6.5 billion bridge loan it received earlier this year.
The bonds were issued through the company's international subsidiary, Petrobras International Finance Company, or Pifco.
The company has accessed the international debt market two times so far this year. In February, the company raised $1.5 billion with a 10-year overseas bond issue. In June, Petrobras raised $1.25 billion with paper of the same maturity.
The risk premium on Brazilian debt strengthened Friday on JPMorgan's Emerging Markets Bond Index Global. It was three basis points tighter at 219 basis points over Treasurys. However, the return on the index was down 0.45% amid this new supply. Brazil's benchmark bond, the Global 2040, lost 1 3/8 to 133 bid, according to Reuters.
The overall Embig was nine basis points tighter at 309 basis points over Treasurys in late afternoon trading. The index lost 0.17% on the day."
Friday, October 23, 2009
IMF Official: Brazil Should Phase Out Fiscal Stimulus - WSJ.com
IMF Official: Brazil Should Phase Out Fiscal Stimulus - WSJ.com: "
OCTOBER 23, 2009, 3:20 P.M. ET
SAO PAULO (Dow Jones)-- The best way for Brazil to protect its currency from additional, and unwanted, appreciation is to phase out fiscal stimulus measures, a top International Monetary Fund official said Friday.
'Given that Brazil has already emerged from the global crisis and is growing strongly, it is now time to remove fiscal stimulus,' IMF Western Hemisphere Director Nicolas Eyzaguirre told reporters. 'If not, Brazil will face inflation and rising interest rates.'
Higher interest rates, in turn, could bring in more speculative investment from overseas, leading to persistent appreciation of the Brazilian real.
The Brazilian real has gained 35% against the U.S. dollar so far this year. The strong real has hurt exporters. It has also led to a deterioration of trade and current account balances.
Earlier Friday, the Brazilian Central Bank released September current account figures, showing a monthly deficit of $2.31 billion, up sharply from $822 million in August. Brazil's September trade surplus dwindled to $1.33 billion from $3.1 billion the previous month.
Earlier this week, the Brazilian government slapped a 2% tax on incoming foreign investments in the areas of fixed-income and stocks. The frank purpose of the measure was to reduce foreign investment inflows to halt the appreciation of the real.
Eyzaguirre said, 'We understand perfectly how a country would wish to protect itself in a situation like this. The obvious thing to do is to open your umbrella when it's raining dollars.'
But Eyzaguirre said the increased taxation alone might not be enough to halt the real's appreciation. For that reason, he recommended removal of fiscal stimulus measures.
'Brazil has created a middle class, which has stepped up consumption to the point where fiscal stimulus is no longer necessary and can be phased out,' Eyzaguirre said.
-By Tom Murphy, Dow Jones Newswires; 55-11-2847-4519; brazil@dowjones.com"
OCTOBER 23, 2009, 3:20 P.M. ET
SAO PAULO (Dow Jones)-- The best way for Brazil to protect its currency from additional, and unwanted, appreciation is to phase out fiscal stimulus measures, a top International Monetary Fund official said Friday.
'Given that Brazil has already emerged from the global crisis and is growing strongly, it is now time to remove fiscal stimulus,' IMF Western Hemisphere Director Nicolas Eyzaguirre told reporters. 'If not, Brazil will face inflation and rising interest rates.'
Higher interest rates, in turn, could bring in more speculative investment from overseas, leading to persistent appreciation of the Brazilian real.
The Brazilian real has gained 35% against the U.S. dollar so far this year. The strong real has hurt exporters. It has also led to a deterioration of trade and current account balances.
Earlier Friday, the Brazilian Central Bank released September current account figures, showing a monthly deficit of $2.31 billion, up sharply from $822 million in August. Brazil's September trade surplus dwindled to $1.33 billion from $3.1 billion the previous month.
Earlier this week, the Brazilian government slapped a 2% tax on incoming foreign investments in the areas of fixed-income and stocks. The frank purpose of the measure was to reduce foreign investment inflows to halt the appreciation of the real.
Eyzaguirre said, 'We understand perfectly how a country would wish to protect itself in a situation like this. The obvious thing to do is to open your umbrella when it's raining dollars.'
But Eyzaguirre said the increased taxation alone might not be enough to halt the real's appreciation. For that reason, he recommended removal of fiscal stimulus measures.
'Brazil has created a middle class, which has stepped up consumption to the point where fiscal stimulus is no longer necessary and can be phased out,' Eyzaguirre said.
-By Tom Murphy, Dow Jones Newswires; 55-11-2847-4519; brazil@dowjones.com"
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