News from Brazil

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Brazil Weekly, January 31st

In Uncategorized on January 31, 2010 at 1:34 pm

POLITICS

President Luiz Inacio Lula da Silva said on Saturday he is “in perfect health,” after undergoing a series of medical tests following his brief hospitalization for high blood pressure two days ago (Reuters).

Foreign Minister Celso Amorim said he had held talks with Iran’s foreign minister in an effort to restart dialogue over Tehran’s nuclear program (Reuters).

“Admitting to liberalism explicitly,” wrote Roberto Campos, a Brazilian politician, diplomat and swimmer against the tide who died in 2001, “is as outlandish in a country with a dirigiste culture as having sex in public.” His observation still holds for Brazil, where economic liberals (in the British, free-market sense, not the socialistic American one) are as scarce as snowflakes. Read the full article in The Economist.

Next month the ruling PT (Workers Party) will hold its fourth congress. The event, which is scheduled from February, 18th to the 21st, will be a chance for the party to discuss its general directives, organize campaign strategies for October’s federal and state elections, and, as has been expected for many months, launch the official candidacy of presidential hopeful and current Lula administration Chief of Staff Dilma Rousseff. Read the full analysis in The Rio Times.

ECONOMY

The economy is returning to normal and no longer needs so much fiscal stimulus, Central Bank President Henrique Meirelles said (Reuters).

Brazil’s economy is “more sustainable” than China’s because its exports of raw materials from metals to crops make it more resilient, investor Mark Mobius  said (Bloomberg).

BUSINESS

Braskem, Latin America’s largest petrochemical company, may unveil as soon as Monday the purchase of U.S.-based Sunoco Inc.’s petrochemical assets for about $400 million (Reuters).

Braskem may invest as much as $13 billion in new projects over the next seven years (Bloomberg).

Aircraft maker Embraer may develop its largest-ever jet in a bid to meet demand by airlines (Reuters).

Civil construction conglomerate Camargo Correa withdrew its proposal to merge its cement operations with Portuguese Cimpor, the target of a takeover bid by Brazil’s CSN (Reuters).

Mining company Vale said that it would pay $3.8 billion to buy Bunge Ltd’s fertilizer assets in Brazil, as global demand for potash is boosted by growing food consumption (Reuters).

Bombardier Inc. plans to invest in train projects in Brazil and will reactivate and expand a plant in Hortolandia (Bloomberg).

ENERGY

Brazil’s Mines and Energy minister denied a newspaper report the government had drafted a provisional measure to enable concessions for electricity companies to be renewed by decree (Reuters).

AIR TRAVEL

Brazil’s largest airline, TAM Linhas Aereas is in talks to buy a stake in Chile’s flagship airline LAN owned by President-elect Sebastian Pinera (Reuters).

Brazil’s youngest airline, Azul, has new investors, the US private equity firm Texas Pacific Group, which on January 22nd confirmed that it had acquired a stake in the fast growing carrier (The Rio Times).

Ryanair Holdings Plc has offered to buy an undisclosed equity stake in WebJet, the closely held Brazilian airline, a WebJet spokeswoman said (Bloomberg).

OIL

State-run oil company Petrobras said its exports of oil and oil products in 2009 reached an average 705,000 barrels per day, up 4.8 percent from 2008. Exports of oil alone rose 8.9 percent to 478,000 barrels per day (Reuters).

Brazilian oil and gas start-up company OGX Petroleo e Gas Participacoes  expects its output to reach 1.4 million barrels per day in 2019, it said in a securities filing (Reuters).

BP Plc Chief Executive Officer said he may consider buying some Repsol oil fields in Brazil and isn’t interested in ConocoPhillips assets (Bloomberg).

Chevron Corp., the second-largest U.S. energy producer, said it will invest in a $5.2 billion oil project off the coast of Brazil, the company’s second deepwater development in Latin America’s biggest economy (Bloomberg).

BANKING

Bradesco, Brazil’s second-largest private-sector bank, plans to invest 4.2 billion reais ($2.26 billion) in 2010 on technology infrastructure and opening new branches, Chief Executive Luiz Carlos Trabuco Cappi said (Reuters).

Banco do Brasil, Latin America’s largest bank by assets, said it will soon conclude a plan to sell new stock worth as much as 10 billion reais ($5.42 billion) (Reuters).

REAL ESTATE

Following decades of neglect, the cluster of neighborhoods that comprise Rio de Janeiro’s historic Centro are currently in an exciting, long term process of redevelopment (The Rio Times).

BRASILIA 50

Fifty years ago the region where Brazil’s capital, Brasília, exists, was a barren plain known as Planalto Central (Central Plateau). Today more than 2.5 million people live there, the fourth largest city in Brazil (The Rio Times).

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Brazil Weekly, January 24th

In Uncategorized on January 30, 2010 at 11:54 am

POLITICS

Gandhi had to wait until 34 years after his death before he appeared on cinema screens around the world. George Bush junior, by contrast, was the victim of an Oliver Stone biopic during the last year of his presidency. Now a Brazilian director, Fábio Barreto, has done the same for Brazil’s president, Luiz Inácio Lula da Silva, as he starts his final year of office (The Economist).

It is 25 years since Brazil moved from dictatorship to democracy, but its army remains surprisingly unreformed. President Luiz Inácio Lula da Silva was rudely reminded of this just before Christmas when he signed a decree calling for a truth commission to investigate torture, killings and disappearances during military rule between 1964 and 1985. Within 24 hours the heads of the three armed forces threatened to resign along with Nelson Jobim, the defence minister. Lula seemed quick to retreat. He was reported as saying the government would think again (The Economist).

Speculation is intensifying over the political future of Henrique Meirelles, Brazil’s central bank chief, as October’s general elections draw closer, raising concerns over the continuity of monetary policy (Reuters).

2010 will mark the election of the 36th official President of the Brazilian Republic. Although the official calendar for campaigning does not begin until October 3rd, the political atmosphere is already dense with debate. The deadline for candidate registry isn’t until July 5th, but with parties looking to affiliate themselves to recent Brazilian political triumphs – such as the Olympics – a handful of pre-candidates for the presidency are already popping into the limelight. Amongst the many who plan to run, the current forerunners are: Marina Silva (PV-AC), José Serra (PSDB-SP), Dilma Rousseff (PT), and Ciro Gomes (PSB-CE). Check them out at Rio Times.

ECONOMY

Brazilian households like to buy the newest gadget and prefer to spend on items that will enhance their short-term wellbeing rather than save for a rainy day. This partly explains Brazil’s low saving rate – which has fluctuated around 17 per cent of GDP over the last decade, a number that contrasts sharply with China’s 45-50 per cent. Read the view by Arminio Fraga.

Brazil’s economy should grow 5.2 percent in 2010, the country’s finance minister said, underscoring a strong rebound in Latin America’s largest economy (Reuters).

The European Union and Mercosur, the South American trade bloc led by Brazil and Argentina, are studying restarting talks this year to reach a free-trade agreement, an EU trade official said (Bloomberg).

Brazilian exports to the US fell by 42 percent in 2009, to US$15.7 billion, with China replacing the US as Brazil’s top export market, with US$19.9 billion of exports, or more than 13 percent of all Brazil’s exports, according to figures released by the Ministry of Trade (Rio Times).

BANKING & FINANCE

Banco Bradesco, Brazil’s second-largest private-sector bank, said it agreed to buy Mexican bank Ibi Mexico for an undisclosed sum, marking its first international foray in retail banking as it seeks to take advantage of rising credit demand (Reuters).

Brazil’s state-run utility holding Eletrobras plans to raise $4 billion this year to hedge costs associated with the commercialization of energy from the giant Itaipu dam. However, that money will not go to paying overdue dividends, company president Jose Antonio Muniz said. Eletrobras will pay those dividends from its own funds, he said. The company agreed earlier on Friday to pay 10.33 billion reais ($5.65 billion) in overdue dividends dating to the 1970s (Reuters).

Qatar is interested in buying minority stakes in Petrobras and Banco do Brasil, a Brazilian cabinet official told Reuters. The country’s investment agency already owns a $300 million stake in Brazil’s Vale, the world’s largest iron ore miner (Reuters).

OIL

Brazilian oil and gas start-up company OGX Petroleo e Gas Participacoes saidit had found signs of hydrocarbons in a well in the southern part of the offshore Campos basin (Reuters).

MINING

A Brazilian scientist is developing a method of purifying contaminated waste water that accumulates at mining sites by using a genetically modified bacteria that can absorb heavy metals (Reuters).

INVESTMENT

Carrefour SA, Europe’s biggest retailer, plans to invest 2.5 billion reais ($1.4 billion) in Brazil in the next two years to expand in the north and northeast regions of Latin America’s largest economy (Bloomberg).

REAL ESTATE

Housing prices in Sao Paulo and Rio de Janeiro will jump as much as 40 percent in the next year as record-low interest rates and a growing Brazil economy boost demand, according to the chief executive officer of Gafisa SA (Bloomberg).

AIR TRAVEL

The continuing growth of the domestic airline industry has stimulated investors and over the last few months more airlines have obtained permits to begin operations while others have obtained concessions for new domestic routes (Rio Times).

Brazil Weekly, January 3rd

In Uncategorized on January 29, 2010 at 5:31 pm

ECONOMY

Brazil’s government will turn its focus to investment and away from stimulus measures, President Luiz Inacio Lula da Silva said, as the country’s economy makes a robust exit from recession (Reuters).

Brazil’s state development bank BNDES will focus its 2010 lending on energy projects and infrastructure to support continued economic growth, bank president Luciano Coutinho said (Reuters).

Brazil’s tax collection may rise 11 percent next year, allowing the government to boost spending while still meeting its fiscal targets (Bloomberg)

RIO

‘The Olympic Effect’ may already be well underway in Rio’s real estate market with prices expected to double in many of the city’s neighborhoods by 2016, but values in one of the most fashionable parts of the city will receive another significant boost later on this month (Rio Times).

BUSINESS

American agribusiness company Bunge is more than doubling its sugar cane milling capacity in Brazil, by acquiring sugar and ethanol producer Moema for US$452 million in stock (Rio Times).

Brazilian lender Itau Unibanco is considering buying stakes in one of the United Kingdom banks rescued by the government during the height of the global credit crisis of 2008, the U.K. Sunday Times reported (Reuters).

Brazilian mining company Vale expects iron ore production in 2010 to reach about 300 million tonnes, Chief Executive Roger Agnelli said (Reuters).

Brazil’s state-controlled energy firm Petrobras bought a 40.4 percent stake in a mill that produces ethanol biofuel from sugar cane, the company said in a filing with the local securities market regulator (Reuters).

Goldman Sachs plans to start a private pension fund in Brazil in the first quarter of 2010. New York-based Goldman is negotiating a partnership with an insurance company to distribute the fund (Bloomberg).

PORTS & AIRPORTS

LLX Logistica, the Brazilian logistics firm controlled by billionaire Eike Batista, said it obtained a loan of 408 million reais ($234 million) for its Sudeste Port from state development bank BNDES (Reuters).

Brazil’s government will raise investments in airports to prepare for the 2014 World Cup, Budget Minister Paulo Bernardo said. Brazil may have 10 percent more passengers during this period, Bernardo said in an interview to government radio Radiobras (Bloomberg).

OIL

Brazilian oil and gas start-up company OGX Petroleo e Gas Participacoes said it had found signs of more hydrocarbons in well 1-OGX-3-RJS, off Rio de Janeiro’s coast in the southern part of the Campos basin (Reuters).

ENERGY

Demand for electricity in Brazil will probably soar next year as factories ramp up output and household income continues to rise, a government agency said (Reuters).