News from Brazil

Business & Economy

In Brazil on September 3, 2010 at 10:03 am

ECONOMY

Brazil’s central bank held its benchmark interest rate at 10.75 percent, ending a monetary tightening cycle that helped cool a red-hot economy as the country gears up for a presidential election (Reuters).

Banco Bradesco expects interest rates in Brazil to fall and credit maturities to lengthen in coming years because of an improved risk perception in the economy, Chief Executive Luiz Carlos Trabuco Cappi said (Reuters).

Brazil’s trade surplus in August slipped from a year ago as imports grew faster than exports. The country posted a trade surplus BRTBAL=ECI of $2.44 billion last month, compared to $3.054 billion in August 2009 (Reuters).

Sales of cars, light trucks and buses in Brazil rose for a third straight month in August (Reuters).

The Brazilians are coming! Backed by a booming economy, record job creation and a strong currency, Brazilian consumers are taking wing as they go on a spending spree from street markets in the Argentine capital to shopping malls in Florida and Chile’s ski slopes (Reuters).

Brazil’s economic growth will probably slow by a full percentage point to 5.5% next year, according to government budget estimates for 2011, reflecting the impact of higher borrowing costs and a global slowdown (Reuters).

Brazil’s federal government injected 1.4 billion reais ($798 million) into the capital base of state-controlled development bank BNDES, which is poised to lend a record amount this year. The government will cede shares in state-controlled electricity utility Eletrobras  to Rio de Janeiro-based BNDES as part of the plan (Reuters).

The agreement for Burger King Holdings to be acquired by a Brazilian-backed investment firm, like a deal two years ago for Anheuser-Busch that involved some of the same investors, is one of those emblematic transactions that seem to herald the emergence of a new global business player (New York Times).

BUSINESS

Heavy machinery maker Caterpillar Inc will invest $180 million over two years to expand manufacturing capacity in Brazil, where it makes loaders and other machines used in construction and mining (Reuters).

Owens Illinois Inc said it bought Brazilian glass container producer Companhia Industrial de Vidros (CIV) for $603 million in an all-cash deal that would expand its capacity in that country by 50 percent (Reuters).

Brazil’s richest man, Eike Batista, said he plans to create a high technology company and an automobile company within a year. The idea is to raise funds in the market through stock offerings, said the owner of the industrial conglomerate EBX (Reuters).

Private equity fund Carlyle Group concluded the purchase of a 51 percent stake in Brazil’s Scalina, the owner of a pantyhose maker (Reuters).

Europe’s leading information technology group Capgemini is buying a 55 percent stake in Brazilian peer CPM Braxis for 233 million euros ($298 million) to expand in high-growth emerging markets (Reuters).

BANKING

Banco do Brasil, Latin America’s largest bank by assets, plans acquisitions in Chile and the United States and joint ventures in mortgages, pension plans and stock underwriting as it seeks to become a global conglomerate (Reuters).

Banco Bradesco SA, Brazil’s second- biggest lender by market value, will expand its operations in Luxembourg, New York and London and open its first Asian unit in Hong Kong in November to meet growing demand for Brazilian assets (Bloomberg).

INFRA

Brazil’s infrastructure boom is creating investment opportunities in transportation and housing, industry executives and analysts said, although high demand for industry stocks is leaving some listed companies overvalued (Reuters).

Odebrecht SA, a holding company operating in civil construction and chemicals, is considering forming partnerships and selling shares in initial public offerings for its 2014 World Cup and 2016 Olympics projects as well as its energy subsidiaries (Bloomberg).

OIL

Brazil’s government will charge state oil company Petrobras $8.51 per barrel for crude reserves to be used in a $43 billion oil-for-shares swap, a price seen as high that could limit interest in a related share offer (Reuters).

Four years ago Brazil struck oil—up to 350km (220 miles) offshore and buried under deep water and thick layers of rock, sand and corrosive salt. In places, the oil fields are 7km below the surface, so getting the black stuff out was always going to be hard. Now it looks like finding the funding will be tricky too (The Economist).

Petrobras’s proven oil reserves could rise 35 percent as a result of access to new fields through an oil-for-shares swap, the company chief executive said (Reuters).

LOGISTICS

Sugar loading at Brazil’s two main ports will accelerate because of dry weather, further easing a backlog of more than 100 ships waiting to pick up the sweetener (Bloomberg).

AVIATION

Trip Linhas Aéreas will seek funds from Brazil’s national development bank  BNDES and international leasing operations to finance its plan to add 10 aircraft to its fleet in 2011 (Bloomberg).

Finance Minister Guido Mantega said the merger of Brazil’s TAM and Chile’s LAN airlines is legal, dispelling doubts on the approval of a plan to create Latin America’s largest carrier (Xinhua).

TWITTER & LINKEDIN

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POWER

French power group GDF Suez and Eletrobras, Brazil’s state-owned electricity holding company, have formed a partnership to develop energy projects in Central and South America and Africa. The agreement includes joint research, project development, and energy production and transmission ventures in renewable energy and other energy sources (Reuters).

ETHANOL

Ethanol’s mid-life crisis? The sugar industry produces food, fuel and environmental benefits. How fast it grows may depend on an argument about how it should be regulated. Read the analysis in The Economist.

MINING

Mato Grosso state government said it had registered a major mineral deposit discovery with an estimated 11.5 billion tonnes of iron ore of a 41 percent Fe grade (Reuters).

Vale SA, the world’s largest iron- ore producer, will explore for copper and gold in Kazakhstan as the country seeks outside investors (Bloomberg).

AGRI

Is Billionaire Warren Buffett Buying Up Land in Brazil? Brazilian magazine EXAME reports that America’s favorite investor is headed to Brazil (Forbes).

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