News from Brazil

Business & Economy

In Brazil on October 8, 2010 at 10:22 am

ECONOMY

Economists covering Brazil’s economy raised their inflation forecasts for this year and the next 12 months as credit expansion and job growth fuel domestic consumer demand (Bloomberg).

According to a study by international consulting firm Manpower, Brazil is the fourth country with the highest expectation of signings for next quarter. Nationwide, 37% of those surveyed employers said they would recruit more by the end of December. Among them, Rio de Janeiro and Parana hope to open more new hires in the period (India-Brazil).

The growth of the Brazilian economy continues to grab international attention, giving rise to a situation where the value of the ‘Real’ is significantly outpacing those of countries, thereby creating a barrier to entry for foreign investors (Gringoes).

Brazil’s decision to double a levy on foreign bond inflows will catch out far more investors than last autumn, when the country slapped an initial 2 percent tax on foreign capital, Standard Chartered said (Reuters).

Brazil posted a trade surplus BRTBAL=ECI of $1.093 billion in September, compared with a surplus of $2.44 billion in August, the trade ministry said (Reuters).

Brazil’s inflation quickened to the fastest pace in five months in September as food prices pushed the annual rate above the government’s target (Bloomberg).

Brazilian Central Bank President Meirelles said there’s a risk of bubbles forming in several asset classes as a result of excess global liquidity (Bloomberg).

Brazil’s government should reduce public spending and lending to help contain the currency’s appreciation, Arminio Fraga, a partner at Gavea Investimentos and a former central bank president, said (Bloomberg).

OIL

HRT Participacoes em Petroleo, a Brazilian oil start-up, and shareholders plan to raise up to 2.97 billion reais ($1.8 billion) in an initial public offering, signaling a possible easing of the risk aversion that has hampered the local equity market for months (Reuters).

Petrobras will need to raise $60 billion from capital markets over the next five years to fund a large investment program, Chief Executive Jose Sergio Gabrielli said (Reuters).

Petrobras expects average oil production in Brazil for 2010 to be within 2 to 3 percent of its 2.1 million barrel per day target (Reuters).

Chinese refiner Sinopec Group will buy 40 percent of Spanish oil major Repsol’s Brazilian arm for $7.1 billion, strengthening resource-hungry China’s presence in Latin America (Reuters).

AGRI

SLC Agricola,a Brazilian farm group, plans to create an agricultural-property company and sell a stake to an investor this year (Bloomberg).

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AUTOMOTIVE

Automobile production in Brazil, Latin America’s largest economy, will probably grow 13.1 percent this year, more than the 6.5 percent expansion predicted previously, the national automakers’ association Anfavea said (Reuters).

AVIATION

Embraer will close an aircraft factory in China, Brazil’s Estado news agency reported, citing the company’s executive vice president of commercial aviation (Bloomberg).

ENERGY

GDF SUEZ plans to make at least three acquisitions in the next few months to enter the Brazilian energy distribution industry. GDF Suez’s priority is to buy Grupo Rede, which would give it nine distributors in seven Brazilian states, almost 5 million consumers and sales of about 8 billion reais ($4.8 billion) (Bloomberg).

TELECOMS

Embratel, the Brazilian fixed-line phone carrier owned by Mexican billionaire Carlos Slim, paid nearly $2 billion on Thursday for most of the outstanding shares in cable operator Net Servicos (Reuters).

WORLD CUP

The BNDES approved the first three projects in the BNDES ProCopa Arenas program, set up by the Bank to finance the construction or reform of stadiums that will host World Cup matches in 2014. The states of Bahia (R$ 323.6 million), Ceará (R$ 351.5 million) and Mato Grosso (R$ 393 million), whose capitals are among the 12 hosts for the World Cup in Brazil, will be beneficiaries of the loans (BNDES).

SNC-Lavalin Group Inc, Canada’s biggest engineering company, has struck an alliance with Brazilian engineering firm Alusa, hoping to land contracts as Brazil builds infrastructure in preparation for hosting soccer’s World Cup in 2014 and the Summer Olympics in 2016 (Reuters).

MINING

Vale announced that it has entered into agreements with Export Development Canada (EDC), Canada’s export credit agency, for the financing of its capital expenditure program related to Canadian export projects and future Canadian procurement opportunities in Vale operations (Vale).

Vale,  the world’s largest iron ore miner, will likely boost investments by as much as 78 percent next year to expand into Africa and China and increase output of other metals, O Estado de S. Paulo said (Reuters).

RETAIL

Carrefour, the world’s second- largest retailer, said it hired KPMG LLP for an audit in Brazil following the “poor performance” of company superstores there (Bloomberg).

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