News from Brazil

Brazil Business & Economy News

In Brazil on April 1, 2011 at 12:28 pm

ECONOMY

Brazil’s maturing economy will no longer grow at the breakneck clip of the last decade, settling in at a moderated pace of 4 to 5 percent a year that will still provide ample investment opportunities, economists said (Reuters).

Brazil is in position to have its investment grade credit rating boosted this year, the top credit analyst for Latin America at Fitch Ratings said (Reuters).

Brazil’s central bank raised its inflation forecast for 2011, although it lowered its forecast for next year (Reuters).

AGRI

As cotton prices soar on the world market, the pressure is on in Brazil to maximize its position as the world’s fifth largest producer of the commodity.  With a favorable WTO ruling over the U.S. last year and ensuing trade deal, Brazil is expected to significantly increase the amount of cotton it produces, though trade barriers in the U.S. remain largely the same (The Rio Times).

AVIATION

A U.S. pilot involved in one of Brazil’s worst air disasters appeared before a Brazilian judge by videoconference, denying allegations that his plane’s anti-collision system was disconnected at the time of the 2006 crash (Washington Post).

Brazil has signed agreements with Mexico, Russia and Canada that allow for increased air traffic with those countries, its aviation authority said (Reuters).

Tam SA, the Brazilian airline that agreed to be bought by Lan Airlines SA last year, may purchase a stake in Trip Linhas Aereas SA to regain domestic market leadership over Gol Linhas Aereas Inteligentes SA (Bloomberg).

Singapore Airlines launched flights to the Brazilian city of Sao Paulo, the airline’s first destination in South America (Xinhua).

BANKING & FINANCE

Ten years ago, Goldman Sachs proclaimed that Brazil was among the new economic powerhouses. Now it is the next frontier for hedge funds (New York Times).

Billions of dollars are rushing into Brazil’s economy. International private equity firms like Blackstone and the Carlyle Group are scrambling to capture of a piece of this emerging market before it has fully emerged. JPMorgan Chase recently bought 55 percent of Gávea, a seven-year-old investment fund with $6 billion under management co-founded by Arminio Fraga, the former president of the central bank of Brazil from 1999 to 2002 (New York Times).

The Brazilian government is planning to impose a financial operations tax on overseas bond issues by Brazilian companies, local financial daily Valor Economico reported (MercoPress).

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BIOFUELS

Brazil may import ethanol from the United States in April, Brazil’s oil regulator says. The move comes as a growing number of Brazilian cane farmers choose to produce sugar, which has surged in price over the last year, rather than ethanol, leading to a spike in fuel costs (New York Times).

HIGH SPEED

Brazil will postpone a $19 billion tender to build and operate a bullet train from Rio de Janeiro to Sao Paulo and Campinas, an infrastructure project that the government had hoped to have at least partially ready for the 2014 World Cup and 2016 Olympic Games (Reuters).

MINING & STEEL

The world’s largest iron ore miner, Brazil’s Vale, said its holding company would meet to select a replacement for acting chief executive Roger Agnelli on April 7 from a list of three potential candidates compiled by an international head hunter (Reuters).

Banco Bradesco SA, a shareholder in the controlling group of Vale, will nominate Tito Botelho Martins to replace Roger Agnelli as Chief Executive Officer of the mining company, Folha de S.Paulo said (Bloomberg).

Vale will appeal a court ruling allowing the government to charge it 25 billion reais ($15 billion) in unpaid taxes on profits from foreign subsidiaries (Reuters).

A wave of mergers in Brazil’s steel industry is unlikely, as mills look for ways other than combinations to grow their business and unlock asset value, the chief executive of Usiminas, Brazil’s biggest maker of steel products for automakers, said (Reuters).

PORTS

Billionaire Eike Batista’s Acu Port construction site had its access road blocked by about 300 workers in a demonstration for better lodging conditions and a pay increase (Bloomberg).

POWER

CPFL Energia SA, a Brazilian power company, will invest 600 million reais ($368 million) to build five wind farms in the country’s northern state Rio Grande do Norte (Bloomberg).

TELECOMS

Brazilian telecommunications company GVT plans to spend 10 billion reais ($6 billion) over the next five years to boost coverage in Latin America’s largest economy (Reuters).

Tax burden and inadequate infrastructure make broadband Internet service in Brazil much more expensive than in other countries, Rio’s Industry Federation FIRJAN said (Xinhua).

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