Brazil Forms Sovereign Wealth Fund Advisory Board
BRASILIA (Dow Jones)--Moving forward with the administration of its recently created sovereign wealth fund, Brazil's government on Monday established a special advisory board to supervise the fund's investment decisions, according to a presidential decree published in the country's federal register.
Under the decree, the board will be headed by the country's Finance Minister, Guido Mantega, and will also include Planning Minister Paulo Bernardo and the president of the country's central bank, Henrique Meirelles.
Votes from only two of the board's three members will be necessary, however, to ratify decisions on the fund's investments.
The board will meet regularly on a quarterly basis, though extraordinary board meetings can be called by its president.
Among its responsibilities, the board will approve investment return targets, ratify the fund's budgeting decisions, and create a technical consulting committee.
Brazil created the sovereign wealth fund in late 2007 with the aim of reinforcing public sector savings and funding projects of strategic interest abroad.
The sovereign wealth fund currently manages 16.3 billion Brazilian reals ($9 billion), up from 14.3 billion when it was established in late 2008.
According to the fund's rules, fund investments overseas must obtain a minimum return equivalent to the six-month London Interbank Offered Rate. Investments in Brazil must obtain a minimum return equivalent to the country's TJLP long-term interest rate, currently at 6% annually.
The fund also will be free to buy dollars in the local currency market as part of its investment strategy.
Upon formalization of the fund's management rules in December, the government named central bank career employee Luiz Claudio Portela as the chief administrator for its day-to-day operations.
-By Gerald Jeffris, Dow Jones Newswires; 5561-3335-0832; gerald.jeffris@dowjones.com
Monday, February 22, 2010
Thursday, February 18, 2010
Rates Lower As Brazil Sells BRL4.03B LTNs At 9.78%-11.93% - WSJ.com
Rates Lower As Brazil Sells BRL4.03B LTNs At 9.78%-11.93% - WSJ.com: "RIO DE JANEIRO (Dow Jones)--Rates were mostly lower Thursday in the Brazil National Treasury's sale of fixed-rate LTN and NTN-F bonds due to greater demand.
The government sold 4.027 billion Brazilian reals in fixed-rate LTN bonds out of BRL4.5 billion ($2.46 billion) offered.
The bonds were sold in two different maturities, October 2010 and July 2012, at average interest rates ranging from 9.78% to 11.93%.
The government sold 4.027 billion Brazilian reals in fixed-rate LTN bonds out of BRL4.5 billion ($2.46 billion) offered.
The bonds were sold in two different maturities, October 2010 and July 2012, at average interest rates ranging from 9.78% to 11.93%.
Friday, February 12, 2010
Brazil's Cetip in talks with Germany's Clearstream | Reuters
Brazil's Cetip in talks with Germany's Clearstream
SAO PAULO, Feb 12 (Reuters) - Brazil clearinghouse Cetip (CTIP3.SA) said on Friday it is in strategic cooperation talks with Deutsche Borse AG's (DB1Gn.DE) Clearstream.
CETIP is the largest custodian of corporate fixed income securities in Latin America.
The possible deal will include joint development and distribution of collateral management services Cetip offers to its participants, Cetip said in a statement to securities regulator CVM.
Clearstream is a leading securities depository.
Cetip shares closed 0.6 percent higher on Friday, while Brazil's benchmark Bovespa stock index .BVSP fell 0.4 percent. (Reporting by Daniela Machado; writing by Raymond Colitt; editing by Andre Grenon)"
SAO PAULO, Feb 12 (Reuters) - Brazil clearinghouse Cetip (CTIP3.SA) said on Friday it is in strategic cooperation talks with Deutsche Borse AG's (DB1Gn.DE) Clearstream.
CETIP is the largest custodian of corporate fixed income securities in Latin America.
The possible deal will include joint development and distribution of collateral management services Cetip offers to its participants, Cetip said in a statement to securities regulator CVM.
Clearstream is a leading securities depository.
Cetip shares closed 0.6 percent higher on Friday, while Brazil's benchmark Bovespa stock index .BVSP fell 0.4 percent. (Reporting by Daniela Machado; writing by Raymond Colitt; editing by Andre Grenon)"
Monday, February 1, 2010
Goldman Sachs Says Buy Brazil’s Real Following Tumble
Goldman Sachs Says Buy Brazil’s Real Following Tumble
Feb. 1 (Bloomberg) -- Goldman Sachs Group Inc. recommended investors buy Brazil’s real, saying the country’s “strong” economic growth will spark a rebound after it posted the worst rout among major currencies last month.
“Brazil’s growth has remained strong and is accelerating,” currency analysts including London-based Thomas Stolper wrote in a research note to clients. “Together with cyclical assets moving back to a more constructive view of the world, a more hawkish central bank stance could support a return of the Brazilian real towards the lower end of the recent trading ranges.”
Goldman Sachs, which called the real the world’s most “overvalued” currency as recently as Dec. 15, recommended clients buy it at 1.8870 per dollar, predicting the real will advance to 1.75. Investors should exit the trade if the real were to slide to 1.94, the Goldman Sachs analysts said.
Feb. 1 (Bloomberg) -- Goldman Sachs Group Inc. recommended investors buy Brazil’s real, saying the country’s “strong” economic growth will spark a rebound after it posted the worst rout among major currencies last month.
“Brazil’s growth has remained strong and is accelerating,” currency analysts including London-based Thomas Stolper wrote in a research note to clients. “Together with cyclical assets moving back to a more constructive view of the world, a more hawkish central bank stance could support a return of the Brazilian real towards the lower end of the recent trading ranges.”
Goldman Sachs, which called the real the world’s most “overvalued” currency as recently as Dec. 15, recommended clients buy it at 1.8870 per dollar, predicting the real will advance to 1.75. Investors should exit the trade if the real were to slide to 1.94, the Goldman Sachs analysts said.
Friday, January 22, 2010
Brazil's Braskem Set To Become Global Petrochemicals Player - WSJ.com
Brazil's Braskem Set To Become Global Petrochemicals Player
RIO DE JANEIRO (Dow Jones)--Brazilian petrochemicals giant Braskem SA (BAK, BRKM5.BR) will gain much-needed muscle to compete on the global stage with a deal for rival Quattor Petroquimica SA (SZPQ4.BR).
Earlier Friday, Quattor holding company Unipar (UNIP5.BR) said that it had agreed to sell its stake in the company to Braskem for 870 million Brazilian reals ($478 million).
The widely anticipated deal, which first appeared on the radar last August, will create the world's sixth-largest producer of plastic resins. Braskem, already Latin America's largest petrochemicals company, will now have the scale to compete with global players such as Dow Chemical Co. (DOW) and BASF SE (BASFY, BAS.XE).
The fusion will allow closely held industrial conglomerate Odebrecht and state-run energy giant Petreleo Brasileiro SA (PBR, PETR4.BR), or Petrobras, to form the so-called 'Nova Braskem,' or new Braskem. The combined Braskem-Quattor will have revenue of about BRL30 billion.
Odebrecht will control the new company with a 53.8% stake, while Petrobras will retain the remaining 46.2%. Odebrecht and Petrobras will share strategic decisions at Braskem.
The share breakdown could face questions from antitrust regulators.
The deal effectively nationalizes Brazil's petrochemicals industry in the hands of Petrobras. The combined Braskem-Quattor would produce 100% of Brazil's polyethylene, polypropylene and PVC--resins used to produce everything from kitchen utensils to auto parts.
Braskem said it will raise between BRL4.5 billion and BRL5 billion in new capital through a share offer. A holding company formed by Odebrecht and Petrobras, called BRK, will subscribe to BRL3.5 billion of the share offer.
The deal should end a contentious legal fight brought by one of the members of the Geyer family, which controlled Unipar, seeking to thwart the merger.
The deal had been under way since mid-2009, when Braskem, Petrobras and Quattor acknowledged talks on a 'strategic alliance.' India's Reliance Industries Ltd. (500325.BY) was also rumored to be in talks with Quattor about a possible acquisition.
Brazil's petrochemicals industry was privatized in the mid-1990s as stakes in 27 companies were sold, raising $3.7 billion for the government. But intense competition in the sector resulted in consolidation starting in 2001.
The two largest players, Braskem and Quattor, solidified their positions in 2008.
Quattor was formed when Petrobras bought Suzano Petroquimica and consolidated those assets with those held by Unipar to form Brazil's second-largest petrochemicals company behind Braskem.
Petrobras also teamed with Braskem to purchase the petrochemicals assets of Ipiranga. Petrobras then rolled some of its petrochemical assets into Braskem in exchange for a 40% stake in the company.
Petrobras shares were fractionally higher at BRL34.34 in early trading on the Sao Paulo Stock Exchange. Braskem shares jumped 2.9% to BRL14.34, while Unipar shares were halted at BRL2.94. The broader market as measured by the Ibovespa stocks index was 0.4% lower at 66,005 points.
-By Jeff Fick, Dow Jones Newswires; 55-21-2586-6085; Jeff.Fick@dowjones.com
RIO DE JANEIRO (Dow Jones)--Brazilian petrochemicals giant Braskem SA (BAK, BRKM5.BR) will gain much-needed muscle to compete on the global stage with a deal for rival Quattor Petroquimica SA (SZPQ4.BR).
Earlier Friday, Quattor holding company Unipar (UNIP5.BR) said that it had agreed to sell its stake in the company to Braskem for 870 million Brazilian reals ($478 million).
The widely anticipated deal, which first appeared on the radar last August, will create the world's sixth-largest producer of plastic resins. Braskem, already Latin America's largest petrochemicals company, will now have the scale to compete with global players such as Dow Chemical Co. (DOW) and BASF SE (BASFY, BAS.XE).
The fusion will allow closely held industrial conglomerate Odebrecht and state-run energy giant Petreleo Brasileiro SA (PBR, PETR4.BR), or Petrobras, to form the so-called 'Nova Braskem,' or new Braskem. The combined Braskem-Quattor will have revenue of about BRL30 billion.
Odebrecht will control the new company with a 53.8% stake, while Petrobras will retain the remaining 46.2%. Odebrecht and Petrobras will share strategic decisions at Braskem.
The share breakdown could face questions from antitrust regulators.
The deal effectively nationalizes Brazil's petrochemicals industry in the hands of Petrobras. The combined Braskem-Quattor would produce 100% of Brazil's polyethylene, polypropylene and PVC--resins used to produce everything from kitchen utensils to auto parts.
Braskem said it will raise between BRL4.5 billion and BRL5 billion in new capital through a share offer. A holding company formed by Odebrecht and Petrobras, called BRK, will subscribe to BRL3.5 billion of the share offer.
The deal should end a contentious legal fight brought by one of the members of the Geyer family, which controlled Unipar, seeking to thwart the merger.
The deal had been under way since mid-2009, when Braskem, Petrobras and Quattor acknowledged talks on a 'strategic alliance.' India's Reliance Industries Ltd. (500325.BY) was also rumored to be in talks with Quattor about a possible acquisition.
Brazil's petrochemicals industry was privatized in the mid-1990s as stakes in 27 companies were sold, raising $3.7 billion for the government. But intense competition in the sector resulted in consolidation starting in 2001.
The two largest players, Braskem and Quattor, solidified their positions in 2008.
Quattor was formed when Petrobras bought Suzano Petroquimica and consolidated those assets with those held by Unipar to form Brazil's second-largest petrochemicals company behind Braskem.
Petrobras also teamed with Braskem to purchase the petrochemicals assets of Ipiranga. Petrobras then rolled some of its petrochemical assets into Braskem in exchange for a 40% stake in the company.
Petrobras shares were fractionally higher at BRL34.34 in early trading on the Sao Paulo Stock Exchange. Braskem shares jumped 2.9% to BRL14.34, while Unipar shares were halted at BRL2.94. The broader market as measured by the Ibovespa stocks index was 0.4% lower at 66,005 points.
-By Jeff Fick, Dow Jones Newswires; 55-21-2586-6085; Jeff.Fick@dowjones.com
Thursday, January 21, 2010
Brazil's Mantega Paints Positive Picture At Cabinet Meeting - WSJ.com
Brazil's Mantega Paints Positive Picture At Cabinet Meeting
SAO PAULO (Dow Jones)--Brazil is riding the crest of an economic wave with international investors, local consumers and industrial leaders all optimistic about the country's prospects for 2010 and beyond, Finance Minister Guido Mantega told a cabinet meeting Thursday.
According to his presentation, the Finance Ministry expects Brazil's gross domestic product to grow 5.2% in 2010 and average growth to remain at around 5% for the next five years.
The economy is returning to growth at levels seen before the global economic crisis and those levels will be sustainable in the years to come because inflation is under control, the government is committed to fiscal responsibility, exposure to external risk is low and investment levels are high, Mantega said.
The figures presented by the finance minister were broadly in line with market expectations.
He noted that the economy is being driven by domestic demand, which is seen growing 7.3% in 2010, recovering from an estimated 0.1% drop in 2009.
Meanwhile, investment levels are expected to jump this year. Gross fixed capital formation is seen rising 16.1% in 2010, bouncing back from a decline of 10.0% last year, according to government projections.
Industrial production is seen up 7.1% in 2010 after declining an estimated 5.3% last year.
However, Mantega did touch on one negative facet of the economy, namely the deterioration of the country's current account.
His presentation indicated Brazil's current account deficit would widen to 2.09% of GDP in 2010 from 1.55% in 2009.
-By Alastair Stewart, Dow Jones Newswires; 5511 2847-4520; alastaiir.stewart@dowjones.com"
SAO PAULO (Dow Jones)--Brazil is riding the crest of an economic wave with international investors, local consumers and industrial leaders all optimistic about the country's prospects for 2010 and beyond, Finance Minister Guido Mantega told a cabinet meeting Thursday.
According to his presentation, the Finance Ministry expects Brazil's gross domestic product to grow 5.2% in 2010 and average growth to remain at around 5% for the next five years.
The economy is returning to growth at levels seen before the global economic crisis and those levels will be sustainable in the years to come because inflation is under control, the government is committed to fiscal responsibility, exposure to external risk is low and investment levels are high, Mantega said.
The figures presented by the finance minister were broadly in line with market expectations.
He noted that the economy is being driven by domestic demand, which is seen growing 7.3% in 2010, recovering from an estimated 0.1% drop in 2009.
Meanwhile, investment levels are expected to jump this year. Gross fixed capital formation is seen rising 16.1% in 2010, bouncing back from a decline of 10.0% last year, according to government projections.
Industrial production is seen up 7.1% in 2010 after declining an estimated 5.3% last year.
However, Mantega did touch on one negative facet of the economy, namely the deterioration of the country's current account.
His presentation indicated Brazil's current account deficit would widen to 2.09% of GDP in 2010 from 1.55% in 2009.
-By Alastair Stewart, Dow Jones Newswires; 5511 2847-4520; alastaiir.stewart@dowjones.com"
Itau Raises Target On Brazil's Eletrobras ADRs To $31.00 - WSJ.com
Itau Raises Target On Brazil's Eletrobras ADRs To $31.00
SAO PAULO (Dow Jones)--Itau Securities raised the level it considers fair value on shares of Brazil energy company Centrais Eletricas Brasileiras (EBR), or Eletrobras, for the year ending 2010, Itau said in a report Thursday.
The new target price for Eletrobras' American Depositary Receipts is $31 each and the new target for the local shares (ELET3.BR) was raised to 53.40 Brazilian reals ($30) from a previous fair value price of BRL41.50.
Itau cited provisional measure MP 466, which finally became law on Dec. 9 and provides new subsidies to the company's northern electric power operations, coupled with the recent BRL12 billion capitalization of Eletrobras' subsidiaries like Furnas and Chesf.
Another plus is continued talks between Eletrobras and the government for the payment of billions in back dividends from the 1970s.
'The company has been dishing out over a billion reals a year for many years to account for these back payments. Once these debts are paid, it clears the company from having to account for that money on its balance sheet and improves greatly Eletrobras' corporate governance,' said Eduardo Cancian, one of the report's authors.
Eletrobras alleged that it could not pay dividend payments decades ago because its dollar debts surpassed its cash position, and therefore it did not have the money to pay investors.
Itau said it expects 'positive news flow throughout 2010 to keep boosting the stocks.'
The bank also said it suspected Eletrobras would 'strengthen...independent of who the winner' will be in Brazil's 2010 presidential elections between opposition candidate and Sao Paulo state governor Jose Serra and President Luiz Inacio Lula da Silva's chosen successor, Dilma Rousseff, currently chief of staff.
Eletrobras is a federal holding company operating 39% of Brazil's total installed capacity. The company produces more than 39,000 megawatts. It operates the massive Itaipu hydroelectric power station, the largest in Brazil.
On Thursday, Eletrobras shares were trading up 2.26% to BRL37.53. Its preferred shares (ELET6.BR) were up 1.3% to BRL31.30. Both were outperforming the Ibovespa stock index, down 1.03% to 67,497 points in the early afternoon hours.
In New York, Eletrobras' ADRs were up 1.68% to $21.16.
-By Kenneth Rapoza, Dow Jones Newswires, 5511-2847-4541, kenneth.rapoza@dowjones.com"
SAO PAULO (Dow Jones)--Itau Securities raised the level it considers fair value on shares of Brazil energy company Centrais Eletricas Brasileiras (EBR), or Eletrobras, for the year ending 2010, Itau said in a report Thursday.
The new target price for Eletrobras' American Depositary Receipts is $31 each and the new target for the local shares (ELET3.BR) was raised to 53.40 Brazilian reals ($30) from a previous fair value price of BRL41.50.
Itau cited provisional measure MP 466, which finally became law on Dec. 9 and provides new subsidies to the company's northern electric power operations, coupled with the recent BRL12 billion capitalization of Eletrobras' subsidiaries like Furnas and Chesf.
Another plus is continued talks between Eletrobras and the government for the payment of billions in back dividends from the 1970s.
'The company has been dishing out over a billion reals a year for many years to account for these back payments. Once these debts are paid, it clears the company from having to account for that money on its balance sheet and improves greatly Eletrobras' corporate governance,' said Eduardo Cancian, one of the report's authors.
Eletrobras alleged that it could not pay dividend payments decades ago because its dollar debts surpassed its cash position, and therefore it did not have the money to pay investors.
Itau said it expects 'positive news flow throughout 2010 to keep boosting the stocks.'
The bank also said it suspected Eletrobras would 'strengthen...independent of who the winner' will be in Brazil's 2010 presidential elections between opposition candidate and Sao Paulo state governor Jose Serra and President Luiz Inacio Lula da Silva's chosen successor, Dilma Rousseff, currently chief of staff.
Eletrobras is a federal holding company operating 39% of Brazil's total installed capacity. The company produces more than 39,000 megawatts. It operates the massive Itaipu hydroelectric power station, the largest in Brazil.
On Thursday, Eletrobras shares were trading up 2.26% to BRL37.53. Its preferred shares (ELET6.BR) were up 1.3% to BRL31.30. Both were outperforming the Ibovespa stock index, down 1.03% to 67,497 points in the early afternoon hours.
In New York, Eletrobras' ADRs were up 1.68% to $21.16.
-By Kenneth Rapoza, Dow Jones Newswires, 5511-2847-4541, kenneth.rapoza@dowjones.com"
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