IPCA up 0.48% highest rate since September 2015

The IPCA inflation index closed the month of September up 0.48%.
In 12 months the IPCA rose 4.53%, higher than the 4.19% up to last month. The expectation was for a rise of 4.45%. This year's inflation target is 4.5%, plus or minus 1.5%.

What the Rating Agencies are saying about Brazil

Two unusual developments emerged recently in the often fraught relationship between Brazil and the big three international credit rating agencies; first, the agencies are in rare agreement about Brazil, and; second, they are saying mostly nice things about the country.

Foreign investors bet on future but cut exposure to short-term assets

With two weeks before the presidential election, foreigners show confidence in the Brazilian economy’s future but are nervous about the short term. Figures show that in August the country received $10.6 billion in direct investment, one of the ten best monthly performances since the launch of the Real Plan in July 1994 — in the 12 months through August, investors injected $70 billion in Brazil. Meanwhile, short-term fixed-income and equity investments saw last month the largest capital outflow in almost four years. In fixed income, net outflow reached $7.75 billion; as for equities, investors have already withdrawn $1.88 billion in September.

Taxation of investment funds: the new intended regime

The Brazilian government again intends to change the taxation of investments in certain Brazilian funds, especially FIPs and closed-end funds, effective January 1st, 2019.

Similar changes had already been attempted via Provisional Measure (“PM”) No. 806, of October 30, 2017, which was not timely converted into law by Congress and thus expired. Now President Michel Temer has submitted a new bill to Congress (Bill No. 10,638/2018) with similar contents.

Closed-end funds, which currently are taxed only upon amortization or liquidation, would be subject to biannual Withholding Income Tax (“WHT”) collection, with past-accumulated gains being taxed at once, which may be challenged on Constitutional grounds.

Local debt market poised to become viable funding source again

The local debt market is likely to show growth in 2017 and become a source of funding for companies again, after last year’s drought. With falling interest rates, companies begin to see positive effects both on their debt cost and in their bottom lines and banks start lending to smaller and riskier businesses.

Felipe Wilberg

Experts who structure debt sales expect the pace to continue strong for tax-exempt securities, meant for individual investors, and to improve for corporate debt, focus of institutional investors. “The year will begin strong, especially for tax-exempt securities. Our expectation is that we will have maintenance or marginal growth in the issuance of certificates of agribusiness receivables [CRAs] and we have a long pipeline of infrastructure bonds, especially for the power industry,” says Joel Schimchak, head of debt issuance at Santander.

Brazil forecast to post US$43bn trade surplus in 2017

Brazil is forecast to post another trade surplus in 2017. Twenty-two experts consulted by ValorData forecast an average surplus of US$43.5 billion that if confirmed will represent a US$100 billion surplus in two years that will help keep the foreign account deficit under control next year. The good results this year and optimistic expectations for 2017 are due to the widespread rise in the price of Brazil’s main commodity exports. Iron showed the most surprising behavior, rising 86% this year. Five of the eight top agricultural commodities produced by Brazil ended the year at higher levels than last year, because of supply and demand fundamentals that should continue having an effect in 2017. Sugar is one example, having finished the year at the highest price in New York since 2012.

Taxation on capital gains to be kept at 15% for deals through December

Taxation on capital gains will be maintained at 15% for transactions completed until December 31, even if the payment is made in subsequent years. This is the understanding of the Federal Revenue on the subject, according to a statement sent to Valor. Transactions occurring after 2017 will be subject to higher rates, based on a progressive table. There were doubts about the Federal Revenue’s stance in relation to the new rates. This is because the tax is only collected at the time of the money transfer. But, according to the Federal Revenue, what it counts is the moment the contract is signed or the asset sold.

HSBC Said to Hire Barclays's Brazil Equity Sales Chief

Ricardo Lanfranchi, head of equity sales at Barclays (BARC) Plc in Brazil, is leaving to take the same position at HSBC Holdings Plc (HSBA), according to a person with direct knowledge of the matter.

Lanfranchi, who has been at London-based Barclays since 2009 and helped build the Brazil broker-dealer unit, will move in a couple of months, the person said, asking not to be identified because the matter isn’t public yet. He will continue to work in Sao Paulo after joining HSBC, the person said.

Brazil Reduces IOF on Financial Derivatives » More Liquidity in the Market

Brazil has reduced a financial transactions tax on currency derivatives to zero after its currency, the real, hit four-year lows against the dollar on Wednesday.

The measure was the second such move in a week to dismantle currency controls as the government sounds a rapid retreat from its earlier “currency war” against foreign capital inflows.

The 1 per cent tax, which applied to short dollar positions in the futures market that were essentially a bet on a stronger real, was considered one of the most onerous of Brazil’s currency controls when it was introduced in July 2011.

Brazil Ready to Cut Spending to Meet Fiscal Target

SAO PAULO--Brazil's government is ready to cut spending, if necessary, to meet its primary budget surplus target for this year, Finance Minister Guido Mantega said in an interview published Wednesday by the Folha de S. Paulo newspaper.

"We will make additional adjustments on the spending side, as needed," he said. "We are going to reach the target of a primary surplus equal to 2.3% of gross domestic product. This is a firm government target."

Brazil's President Rousseff Pledges Fiscal Discipline

BRASILIA--Brazil's President Dilma Rousseff reinforced her administration's commitment with fighting inflation and keeping public accounts in good shape, as she launched another income distribution program.

BTG Pactual capta US$ 1 bilhão e abre mercado de bônus

Bianchi do BofA: "empresas não
precisam mais esperar
captação soberana"

O BTG Pactual deu a largada nas emissões do Brasil ontem ao captar US$ 1 bilhão com bônus sem garantias reais e com vencimento em sete anos. Com a operação, o banco comprovou o apetite de investidores estrangeiros por ativos de renda fixa do país: a demanda pelos papéis foi superior a US$ 6 bilhões, segundo uma fonte próxima da operação.

Inicialmente, a ideia era levantar entre US$ 500 milhões e US$ 750 milhões a uma taxa de rendimento ao investidor de 4,5% ao ano. Mas, diante da forte demanda, o banco ampliou o tamanho da oferta e assim conseguiu reduzir a taxa paga aos investidores.

No fim, o rendimento ao investidor ficou em 4,125% ao ano, sendo que o cupom (juro nominal) ficou ao redor de 4% ao ano - o preço final ainda não havia sido determinado até o fechamento desta edição. O BTG pode exercer o direito de emitir mais uma parte dos mesmos títulos no mercado asiático hoje, o que poderia, em tese, ampliar o tamanho da operação.

A revanche dos fundos multimercados

Os multimercados macro, que apostam em uma tendência para os ativos, fecharam 2012 com retorno de 18,14%. Mais do que o dobro do CDI, que ficou em 8,4%.

Mercado reduz projeção para IPCA e para alta do PIB em 2012

A previsão dos analistas de mercado para a inflação em 2012 caiu pela segunda semana consecutiva, segundo mostrou nesta segunda-feira o boletim Focus, do Banco Central, divulgado nesta manhã. A expectativa, contudo, segue distante do centro da meta de 4,5% perseguida pela autoridade monetária.

A mediana das estimativas para o Índice Nacional de Preços ao Consumidor Amplo (IPCA) saiu de 5,45% para 5,43%. Para 2013 houve aumento na previsão, de 5,39% para 5,40%.

Largest Traders Bet Real Bulls to Beat Mantega

The world’s largest currency traders are recommending their clients bet Brazilian Finance Minister Guido Mantega’s success in stemming gains in the real will be short-lived as foreign investment picks up.

Brazil Imposes 6% Tax on International Bonds Maturing in Up to One Year

Brazilian President Dilma Rousseff raised taxes on corporate loans and debt sales abroad by banks in a bid to contain a 39 percent gain since the end of 2008. The real erased this year’s losses and yields on interest-rate futures rose.
Brazil imposed a tax of 6 percent on international bond sales and loans with an average minimum maturity of up to 360 days, according to a decree published today in the Official Gazette. Companies had paid a 5.38 percent tax on loans up to 90 days and zero tax when the operation exceeded three months.

Brazil inflation forecast rises for 12th week-poll

* forecast rose to 5.80 percent
Feb 28 (Reuters) - Economists raised their forecasts for the rise this year in Brazil's benchmark IPCA consumer price index for the 12th consecutive week, according to a weekly central bank survey.

Brazil's Foreign Reserves Surpass $300 Bln For First Time Ever - WSJ.com

"BRASILIA (Dow Jones)--Brazil's foreign reserves surpassed the $300 billion mark for the first time ever Wednesday according the country's central bank, seeing influence from recent heavy foreign exchange inflows and accelerated dollar buying by the institution.

Brazil Allows Sovereign Fund to Trade Currency Derivatives; Real Weakens

The real fell 0.5 percent to 1.6925 per U.S. dollar at 10.59 a.m. in Sao Paulo. Photographer: Adriano Machado/Bloomberg

Brazil allowed its sovereign wealth fund to trade currency derivatives, signaling President Dilma Rousseff’s administration is ready to take additional measures to curb the rally in the real.

Brazil Interest Futures Rise on Central Bank Signal

Brazil’s interest-rate futures yields on contracts due before July 2012 rose as the central bank’s signal that it will raise rates to curb price increases offset a report showing inflation quickened less than expected.

Investors increased bets the central bank will raise its benchmark Selic interest rate, with the yield on the contract due July 2011 adding 6 basis points to 11.65 percent by 6:38 a.m. New York time, the highest intraday level since Dec. 8. On the agreement due April, the yield advanced 4 basis points to 11.15 percent.