News from Brazil

Business & Economy

In Uncategorized on May 2, 2010 at 12:50 pm

ECONOMY

Brazil’s central bank raised its core interest rate by 0.75 percent, confirming market expectations that it would act aggressively to deal with rising inflation and the threat of an overheating economy (FT).

From sizzling property markets in Sao Paulo and Rio de Janeiro to record job creation and buoyant shoppers, Brazil’s surging economy is raising concern it could overheat. Read the analysis at Reuters.

Some of Brazil’s economic speed gauges are bouncing near red lines. The economy grew at least 10% in the first quarter, estimates Goldman Sachs. Car sales rose 18% in the same period. Brazil has attracted steadily rising foreign direct investment, reaching $26.3 billion in the 12 months leading up to March. Is it time for concern (Wall Street Journal)?

Brazil’s economy will grow 6.4 percent to 7 percent this year as the country’s output gets “close to overheating,” said Octavio de Barros, chief economist at Banco Bradesco SA (Bloomberg).

Morgan Stanley said Brazil’s economy and inflation will grow by 6.8 %,  faster this year than it previously expected as recent data show the economy is “red hot” and “firing on all cylinders” (Bloomberg).

FINANCE

JBS SA, the world’s largest beef processor, raised 1.84 billion reais ($1.04 billion) in a stock offering, more than initially expected, in a sign of renewed demand for follow-on share sales in the country (Reuters).

Brazilian companies will keep tapping overseas bond markets through the October presidential elections after raising $13.4 billion this year as the nation’s credit rating remains stable, Standard & Poor’s said (Bloomberg).

INVESTMENT

Global automakers will likely invest up to $11.2 billion in Brazil over the next two years, the president of industry group Anfavea, Cledorvino Bellini, said (Reuters).

MINING

Giant Brazilian miner Vale has bought a 51 percent stake in BSG Resources, an iron ore mining company in Guinea, for $2.5 billion, Vale said in a securities filing (Reuters).

OIL

A wholly-owned Petrobras subsidiary signed an agreement with the government of Portugal for hydrocarbon exploration in the Alentejo basin, Petrobras said (Reuters).

The 33 percent stake owned by Italian oil company ENI in Portuguese oil company Galp is likely to be acquired by Brazil’s Petrobras, the Portuguese Finance Minister said (Macauhub).

Repsol, Spain’s biggest oil company, is considering the sale of about 40 percent of its Brazil assets in an initial public offering as early as this year, company executives said today on a conference call (Bloomberg).

Vale SA, seeking to secure energy supplies for its mining and industrial operations, said it holds 210 million barrels of oil equivalent with potential to produce 58,000 barrels a day by 2017 (Bloomberg).

The Rio Nave shipyard (Rio de Janeiro) won the bid to build five product vessels under the Transpetro Fleet Modernization and Expansion Program (Promef). The shipyard, which had made the best proposal among competitors, completed its price negotiations with Transpetro. The five vessels put up for bidding (three for clear derivatives and two for dark product transportation) are for 30,000 deadweight tons and are part of the second phase of the Promef (Petrobras).

Petrobras has the most valuable brand in Brazil, according to a survey carried out this year by the BrandAnalytics consulting firm and by the Millward Brown institute. With a brand value of R$19.3 billion, Petrobras leads the ranking of the most valuable, ahead of Bradesco (R$14.8 bn), Itaú (R$13.3 bn), the Bank of Brazil (R$11 bn), Natura (R$6 bn), Skol (R$5 bn), Brahma (R$2.5 bn), Perdigão (R$2 bn), Casas Bahia (R$1.8 bn), and Sadia (R$1.6 bn) (Petrobras).

ETHANOL

U.S. agribusiness group Bunge plans to buy around 10,000 hectares (25,000 acres) of Brazilian land from local firm Acucar Guarani to grow cane for its sugar and ethanol mills (Reuters).

Petrobras announced it had bought a 46 percent stake in Brazil’s fourth largest ethanol group Acucar Guarani for 1.6 billion reais ($920 million) from French sugar group Tereos. Read all about the wave of mergers and acquisitions in the ethanol sector at Reuters.

AVIATION

Embraer, the world’s third-largest aircraft manufacturer, reported first-quarter net income of 44.1 million reais ($25.5 million) compared with a profit of 38.3 million reais in the year-earlier period (Reuters).

BANKING

Bradesco, Brazil’s second-largest private-sector bank, posted a first-quarter recurring profit of 2.15 billion reais ($1.22 billion), up sharply from 1.96 billion reais a year earlier (Reuters).

Outstanding loans in Brazil’s banking system jumped in March, the central bank said, in the latest sign a credit boom was pushing Latin America’s largest economy to its fastest growth rate in a quarter of a century (Reuters).

UBS AG said it agreed to buy the Brazilian brokerage firm Link Investimentos for about $112 million after selling its Pactual unit in the country last year (Bloomberg).

AGRICULTURE

Farm machinery sales in Brazil should recover in 2010 from a crisis-driven slump, as producers take advantage of state-subsidized loans to renew equipment or mechanize for the first time (Reuters).

Coffee growers in Brazil, the world’s biggest producer of the commodity, are pushing the government to boost purchases of the bean to help bolster prices as output may rise to a record this year (Bloomberg).

REAL ESTATE

BR Properties SA, the Brazilian property developer that sold shares to the public for the first time last month, plans to invest 1.5 billion reais ($852 million) in commercial real estate, Chief Executive Officer Claudio Bruni (Bloomberg) said.

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