News from Brazil

Business & Economy

In Brazil on October 29, 2010 at 9:29 am

ECONOMY

Despite the strong expansion in China in recent years, Brazil leads the ranking of most internationalized economy of BRIC countries. Until last year, the stock of foreign direct investment (FDI), which includes all that entered the country over time, totaled 25% of Gross Domestic Product (GDP) – above the numbers of Russia, 21% of India , 13% and China 10% (India-Brazil Chamber).

If you want to know what living with hyperinflation in Brazil used to be like, an arcane system still used in many of the country’s smaller record shops provides a clue. In place of a price-tag, each of the CDs on display in the racks has a small, round label attached. These come in a variety of colours (BBC).

Brazil’s finance minister praised progress by the Group of 20 economies on global currency issues and ruled out a new capital gains tax on foreign holdings of local bonds to curb a domestic currency rally (Reuters).

BANKING & FINANCE

Santander Brasil, Brazil’s third-largest non-government bank, forecasts its credit portfolio could grow about 18 percent in 2011, Chief Financial Officer Carlos Lopez Galan said (Reuters).

JPMorgan Chase & Co said it acquired a majority stake in Brazilian hedge fund and private equity firm Gavea Investimentos, joining a wave of foreign financial firms betting on one of the world’s fastest-growing economies (Reuters).

Australian oil and gas explorer Karoon Gas Ltd said that it could raise up to 1.77 billion reais ($1.04 billion) in an initial public offering of its South American unit in Brazil (Reuters).

Odebrecht SA’s oil and gas unit hired banks to sell as much as $1.5 billion in 10-year bonds, the biggest Brazilian debt offering in a year (Bloomberg).

Foreign investors will scrutinize Brazil more intensely because of the government’s use of state-run lenders and the $70 billion capital injection in oil company Petrobras, financier and former Central Bank President Arminio Fraga said (Reuters).

AVIATION

With Rio’s Galeão International Airport increasingly becoming a direct destination and a new hub for Brazil following the lead of São Paulo’s Guarulhos International, the airports are currently forced to handle flights and passengers well above their capacity. This has led to airlines having to offer direct flights to other major destinations in Brazil such as Salvador, Recife, Manaus, Brasília, and Fortaleza to reduce the burden on São Paulo and Rio (The Rio Times).

Embraer has signed a contract with Fuji Dream Airlines (FDA) of Japan for the sale of an EMBRAER 175, which is the fifth E-Jet in the airline’s fleet. The new aircraft will be configured in a single class with 84 seats. The order also includes an option for one additional aircraft of the same model (Embraer, pdf).

Embraer, the world’s largest maker of regional aircraft, reported third-quarter net income of $98.5 million, compared with $58 million a year earlier (Reuters).

BIOFUELS

Biofuels are back. This time they might even work. Read the analysis about this new post-alcohol world at The Economist.

The Indian giant Shree Renuka Sugars works to transform its plants in India in a major center for refining sugar for re-export it to the major consuming regions, such as the Middle East and Southeast Asia. In the process, Brazil would be the leading supplier of raw sugar (India-Brazil Chamber).

Petrobras said it signed a 2.1 billion-real ($1.23 billion) agreement with Tereos International to secure the supply of ethanol (Reuters).

CONSTRUCTION

Odebrecht and a Spanish construction consortium will build Panama City’s first subway after submitting a plan that will cost less than Panama’s government had anticipated (Reuters).

TWITTER & LINKEDIN

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OIL & GAS

After being delayed by the BP oil spill this summer, Petrobras is finally closing in on the launch of a major offshore oil and gas project in the deep waters of the Gulf of Mexico, its biggest ever in the U.S. (Chron).

British energy company BG Group Plc said it had begun production from Tupi, one of its key fields, in the Santos basin off the coast of Brazil (Reuters).

An offshore oil field may hold the biggest crude discovery in the Americas in more than three decades. The Libra field in the Santos Basin off the coast of southeastern Brazil may have 7.9 billion to 16 billion barrels of oil (Bloomberg).

Petrobras said that drilling off the coast of Sergipe state in the northeast turned up signs of a large deposit of light oil (Reuters).

In partnership with vessel owners Greatship and Farstad, Fugro Brasil has been awarded 3 long-term contracts for ROV Support Vessels by Petrobras (Fugro).

HRT Participacoes em Petroleo SA aims to be Brazil’s largest private oil and gas company in five years, Chief Executive Officer Marcio Rocha Mello said (Bloomberg).

MINING

Vale, the world’s top iron ore producer, will invest a record $24 billion in 2011 as it diversifies toward pricier metals and profitable fertilizers (Reuters).

Vale denied reports that board members discussed replacing Chief Executive Roger Agnelli (Reuters).

SHIPPING

Shipments of bagged sugar from Brazil’s port of Santos are facing delays due to a work slowdown since Oct. 25, shipping agency Williams said (Reuters).

Coffee exports too are facing delays as the container terminals at the country’s largest port clog up, exporters said, slowing deliveries to a market already jittery over tight supplies (Reuters).

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