News from Brazil

Business & Economy

In Brazil on October 1, 2010 at 10:16 am

ECONOMY

An “international currency war” is underway, Brazil’s finance minister, Guido Mantega, has warned (BBC).

Brazil increased existing limits for state credit eligible for subsidies by 8 percent to 134 billion reais ($79 billion) to encourage lending for key infrastructure plans in the coming years (Reuters).

Brazil’s central bank lowered its 2010 inflation forecast to 5.0 percent from 5.4 percent in its quarterly inflation report (Reuters).

China has gone beyond merely influencing the Brazilian economy — the world’s eighth largest — and has begun reshaping it, bringing bonanzas to some industries and burdens to others (Reuters).

Economists covering the Brazilian economy expect accelerating economic growth and faster inflation in Brazil this year, cementing expectations that the central bank may raise rates in the first quarter of 2011 (Bloomberg).

BANKING & FINANCE

Chile’s Corpbanca confirmed on Wednesday informal talks with Banco do Brasil for a possible purchase of up to 10 percent of the Chilean bank (Reuters).

Western Union Co said it got approval to operate a commercial bank and foreign exchange brokerage firm in Brazil, that allows it to offer transfer services directly to consumers in the country (Reuters).

Balckstone Group, the world’s biggest buyout firm, agreed to buy 40 percent of Patria Investimentos, a Brazilian private-equity and asset-management firm, to expand in Latin America (Bloomberg).

OSX Brasil, a start-up shipbuilder controlled by billionaire Eike Batista, obtained a $420 million loan from a group of banks to help build its first drilling platform (Reuters).

Brazil’s Sao Paulo Stock Exchange (Bovespa) is now the second largest stock in market value in the world, the stock’s president Edemir Pinto said (Xinhua).

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SPLIT SECOND POLL

OIL

“A huge success” was how the finance minister, Guido Mantega, described it; and he was not exaggerating. Despite months of doubts among investors about Petrobras’s mammoth share offer, the company said on September 24th that stock worth around $70 billion had been taken up—a world record, and more than three times the size of Agricultural Bank of China’s giant share offer two months ago. And now the hard part (The Economist).

Brazil’s government, through its sovereign wealth fund and other state entities, agreed to buy nearly two-thirds of the shares in oil major Petrobras as part of the company’s massive $70 billion offering that was sealed last week (Reuters).

Petrobras President Sergio Gabrielli was celebrating the world’s biggest ever share offer at the end of last week that, according to Finance Minister Guido Mantega, now gives the company the second biggest market value in the world. Only Exxon, at USD$290 billion, is now higher, leaving Chevron and Shell trailing behind (The Rio Times).

Chinese refiner Sinopec Group and Spanish oil major Repsol have agreed to form a $17.8 billion joint venture to exploit Repsol’s Brazilian oil deposits, Repsol said (Reuters).

For 2010, Petrobras plans to expand Clara Camarao refinery capacity by 30,000 barrels. In 2013, the company plans to inaugurate a 230,000 bpd refinery known as Abreu e Lima in northeastern Brazil (Reuters).

MINING

Two key Usiminas  shareholders could sell a combined 12.8 percent stake in the steelmaker, leading to changes in its capital structure or to a possible merger with a local rival, analysts at BTG Pactual wrote (Reuters).

AVIATION

Gol may buy more Boeing Co. 737 planes to meet demand spurred by Brazilian economic growth and an influx of visitors for the World Cup and Olympics (Bloomberg).

REAL ESTATE

Billionaire Eike Batista plans a strong push into the real estate sector and has started to seek out possible takeovers, Valor Economico newspaper reported (Reuters).

BIOFUELS

Ethanol and sugar company ETH said it plans to invest in ethanol production in Africa or other South American countries as a way to stimulate international buyers to use the biofuel (Reuters).

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