News from Brazil

Brazil Weekly, February 28th

In Uncategorized on February 28, 2010 at 10:25 am

POLITICS

Many corruption scandals stem from the high cost of politics, and unrealistically tight campaign-finance rules (The Economist).

Mercosur, South America’s co-operative trade organization, and the EU could forge an historic trade alliance as early as May of this year according to some sources. However there remains a key issue confronting the two parties: agricultural subsidies that the developed world pays to domestic producers, inhibiting the ability of other nations to compete in an open market (Rio Times).

ECONOMY

Brazil’s central bank is prepared to take unpopular measures to maintain stability in the financial system, the bank’s president Henrique Meirelles said, further preparing the ground for a rate hike (Reuters).

President Lula said his government will expand a project to build low- income homes for workers, bringing the total number of new homes planned to 2 million, up from an original target of 1 million (Bloomberg).

Brazil may create a company to oversee boosting fertilizer production as it seeks to become self-sufficient in potash, phosphate and nitrogen-based raw materials by 2020 (Bloomberg).

Further evidence that the Brazilian economy is continuing on an upward trajectory was provided recently with the release by independent consultants Brand Finance of its list of “The 500 Most Valuable Brand Names in the World.” In 2009 there were only six Brazilian brands appearing on this list, this year it has already jumped up to an impressive fifteen (Rio Times).

BUSINESS

Brazil’s No. 3 steelmaker CSN aims to increase sales in 2010 by one third to 5.5 million tonnes, up from last year’s 4.1 million tonnes (Reuters).

Brazil’s largest poultry exporter, Brazil Foods  said export sales revenues plummeted in 2009 and it expects recovery to be slow (Reuters).

BANKING & FINANCE

JPMorgan Chase & Co, the second largest U.S. lender by assets, is in talks to buy a stake in Brazilian hedge fund and private equity firm Gavea (Reuters).

Banco do Brasil, Latin America’s largest lender, said it is exploring ways to raise capital including a possible share sale (Reuters).

OIL

Petrobras said it had made two separate discoveries of oil in the Campos Basin near Brazil’s coast with recoverable reserves of 40 million and 25 million barrels (Reuters).

A bill being debated gives Petrobras rights to 5 billion barrels of oil in exchange for giving the government new stock as part of a broader share offering estimated at as much as $50 billion by Credit Suisse (Bloomberg).

TRAVEL

Hol, Brazil’s second-largest airline, forecast domestic demand will increase as much as 18 percent this year as economic growth accelerates (Bloomberg).

REAL ESTATE

Brazil may be on the cusp of a much-discussed real estate boom, but in one corner of Zona Sul where the price per square meter is higher than anywhere in the country, there are relatively few new developments underway. Leblon may be lacking the tidal wave of jackhammers, building crews and construction cranes found in Barra da Tijuca, but there are changes underway in Rio’s luxury beach-side (Rio Times).

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