News from Brazil

Brazil Weekly, April 4th

In Uncategorized on April 2, 2010 at 10:04 am

POLITICS

With each new figure it becomes clearer that Brazil’s brief recession of 2009 was a fall onto a trampoline. The economy is still bouncing upwards: it grew by 2% in the fourth quarter of last year compared with the previous three months, and forecasts are for growth of up to 6% this year. With an election due in October, this is cause for much official self-congratulation. The economy’s new-found resilience has also revived the belief of Brazil’s leaders in the economic role of the state. Read the analysis in The Economist.

The director of economic policy at Brazil’s central bank stepped down. Mario Mesquita, one of the strongest advocates of the central bank’s inflation-targeting regime, left for “personal reasons,” the bank said in a statement (Reuters).

Central Bank President Henrique Meirelles, after deciding to stay in his job and drop a bid for office, said he is “totally dedicated” to slowing inflation in his final nine months atop the bank (Bloomberg).

President Luiz Inacio Lula da Silva launched a $878 billion program to upgrade Brazil’s infrastructure, setting out a major campaign banner for his chosen candidate in October elections. Investments are earmarked for infrastructure, police, health, education and other sectors (Reuters).

The race to succeed President Lula the most popular leader in the country’s history, began today with the resignation of Jose Serra and Dilma Rousseff, the two frontrunners, from their current jobs (Bloomberg).

New technology will require voters to identify themselves by means of a fingerprint. State governments already keep fingerprint records of any citizen within their jurisdiction that holds a national identity card, and since ID cards are required for almost all aspects of civil life (such as opening a bank account or applying for a job), fingerprints of the majority of the voting population are already on record (Rio Times).

DEFENCE

Brazil wants to be acknowledged as an undisputed regional military superpower (BBC News).

ECONOMY

Brazil’s sovereign debt ratings are “well anchored” and possible upgrades would have to be based on stable economic growth rates, a Standard and Poor’s analyst said. The ratings agency sees no specific factors triggering an immediate change in Brazil’s ratings outlook or an upgrade (Reuters).

For the past century, Brazil has been a land of great potential—but few results. With runaway inflation and stratospheric national debt, the country was too much of a mess for anyone to take it seriously on the world stage. How times have changed (Wall Street Journal).

OIL

China’s No.2 state oil giant Sinopec Group is expected to sign a cooperation pact with Petrobras this month that will likely include a crude oil supply agreement (Reuters).

Danish shipping and oil group A.P. Moller-Maersk has agreed to buy a 20 percent stake in an oil exploration licence offshore Brazil from Devon Energy by taking a share of the costs (Reuters).

Petrobras  will not issue preferred stock as it prepares for a capitalization via equity markets, chief financial officer Almir Barbassa said (Reuters).

Petrobras is considering selling international assets to help fund the development of the country’s offshore reserves (Bloomberg).

Petrobras’ CEO, José Sergio Gabrielli de Azevedo, is the only Latin American mentioned in the list of the thirty most respected CEOs in the world, published by Barron’s. Gabrielli appears in the list for the second year running (Petrobras).

BUSINESS

Embraer said it had created a new division for commercial aviation, adding to speculation that it is considering building larger planes that would put it in direct competition with Boeing and Airbus (Reuters).

Brazilian billionaire Eike Batista said that others of his companies could sell stocks as the market for initial public offerings heats up in Brazil. Batista’s OSX Brasil raised 2.82 billion reais ($1.58 billion) in an IPO two weeks ago, much less than the original 9.92 billion reais offered, as investors worried about global market conditions and stretched valuations (Reuters).

Hypermarcas, the largest Brazilian multibrand consumer goods maker, sold 1.2 billion reais ($674 million) worth of stock, raising funds for takeovers (Reuters).

MAN SE, Europe’s third-biggest truckmaker, aims to expand to other Latin American markets from a new manufacturing base in Brazil, where the company will introduce a model under its own brand at the end of the year (Bloomberg).

Sugar output in Brazil’s Center South, the world’s largest producing region, will rise 19 percent to a record in the coming season as drier weather boosts yields and new mills come online (Bloomberg).

Transpetro, the Eisa Shipyard, and the National Development Bank (BNDES) signed the financing contracts for the construction of four Panamax-type vessels under the Fleet Modernization and Expansion Program (Promef). The contracts are worth a global amount of R$856 million (Petrobras).

AIR TRAVEL

TAM, Brazil’s largest air carrier, returned to profit in the fourth quarter after a drop in operating and financial expenses and reduced tax payments helped offset a fall in revenue (Reuters).

TAM forecast air-travel growth of 14 percent to 18 percent in its home market (Bloomberg).

Qatar Airways plans to start flights to Brazil and Argentina from June 24 as it expands into South America. The daily flights will link Qatari capital Doha with Sao Paulo and Buenos Aires (Bloomberg).

TRAVEL

Rio de Janeiro, Brazil’s capital of samba and Carnival, is a city forever defined in people’s imagination by its miles of golden beach that on weekends draw millions of sun-worshippers. Read the Travel Postcard at Reuters.

Paulo Barroso de Barros—a man who has exercised an influential role on São Paulo’s culinary scene since returning from kitchens in France, Italy and the U.S. in 2002, picks his ten favorite dining spots in São Paulo.

AMAZON

A top activist for land reform in the Amazon has been murdered, police said. The killing of the activist, Pedro Alacantara de Souza, came hours after a delay in the trial of a man accused of masterminding the slaying of another rain forest activist, Sister Dorothy Stang, an American nun who was shot and killed in 2005 (New York Times).

RIO

EBX CEO Eike Batista discusses on video why Brazil is valuable to foreigners ar the WSJ’s Invest in Rio conference.

Rio de Janeiro state expects to receive as much as $90 billion in investments in the next three years, Governor Sergio Cabral told investors in New York (Bloomberg).

Rio de Janeiro state plans to sell international bonds “at the right moment,” Finance Secretary Joaquim Levy said. Standard & Poor’s assigned the state government an investment grade BBB- credit rating, the same level as Brazil, citing a “diverse and strong economy” that will benefit from the development of oil reserves (Bloomberg).

Authorities finally caught up with the Macaé drug trafficker Roger Rios Mosqueira, better known as Roupinol, who was killed in a battle with police in the favela Morro São Carlos, in Rio’s Zona Norte. The notorious gangster, considered by authorities to be ultimately responsible for manufacturing and distributing the majority of cocaine in the Rio state region, had been under investigation for more than five years (Rio Times).

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