News from Brazil

Brazil Business & Economy News

In Brazil on May 25, 2012 at 10:03 am

ECONOMY

Brazil’s unemployment rate unexpectedly declined in April, adding to evidence that the labor market remains tight and may limit the room for more interest rate cuts. Joblessness fell to 6 percent in April from 6.2 percent the month before, the national statistics agency said today in a report distributed in Rio de Janeiro. The number was the lowest ever for April and below the 6.2 percent median forecast in a Bloomberg survey of 38 analysts.

Brazil’s growth forecast for 2012 was cut to 3 percent from 3.2 percent by Standard & Poor’s, which cited competition from imports. “Growth in Brazil continues to struggle,” Lisa Schineller, a New York-based analyst with S&P wrote in an e- mailed report. “Brazilian manufacturing remains under pressure from imports” (Bloomberg).

Brazil’s economy grew at a moderate pace in the first months of 2012, the central bank said. The “relative recovery” was fueled by retail sales and robust domestic demand, the bank said (Bloomberg).

Brazil’s government has unveiled a new stimulus package to boost the automotive and other manufacturing sectors, amid concerns over growth (BBC).

New rules from Brazil’s central bank will free as much as 18 billion reais ($8.82 billion) for auto financing as policy makers seek to revive economic growth in the world’s biggest emerging market after China (Bloomberg).

Brazil eased rules for subsidized lending by state development bank BNDES to Vale, Petrobras and Eletrobras, in a move that may help President Dilma Rousseff shield a struggling economy from market turmoil abroad (Reuters).

Brazil’s monthly current account deficit rose sharply in April as the country’s trade surplus faded and profit remittances and foreign travel costs increased, the Brazilian Central Bank said (MercoPress).

The OECD sees GDP expanding by 3.2% this year, the same as it had forecast in its last report in November. The organization raised its forecast for next year to 4.2% growth, from 3.9%. It sees consumer price inflation slowing to 4.9% this year, and accelerating to 5.3% in 2013 (MercoPress).

SPLIT SECOND POLL

DIRECT DATA

Check out the latest economic indicators in English directly at Brazil’s BCB or central bank, the Sao Paulo stock Eechange BM&F Bovespa and Brazil’s statistics institute, IBGE.

BUSINESS

Eike Batista, the salesman of Brazil, is pictures as such in The Economist. Brazil’s richest man is betting on resources and infrastructure. Can he deliver?

Batista, who agreed to sell a $300 million stake in his EBX Group Co. to General Electric Co. , is looking to offer another $500 million stake by September, he said yesterday. The deal with GE follows the sale of a $2 billion stake in EBX to Mubadala Development Co. last month and shares of units to EON AG and to International Business Machines Corp. earlier this year (Bloomberg).

General Electric Co. also plans to invest 500 million reais ($245 million) through 2018 in a Brazilian research center to develop energy and transportation infrastructure technologies (Bloomberg).

General Electric Co. is also in talks with EBX Group to build a plant at Superporto do Acu, the port controlled by Brazilian billionaire Eike Batista in the state of Rio de Janeiro, and may make a decision this year (Bloomberg).

Brazil’s billionaire Klein family hired Citigroup Inc. and Arion Capital to advise on a plan to buy out Cia Brasileira de Distribuicao Grupo Pao de Acucar in retailer Via Varejo SA for as much as 3.5 billion reais ($1.71 billion) (Bloomberg).

General Mills Inc agreed to buy Brazilian food maker Yoki Alimentos SA for about 1.75 billion Brazilian reais ($857 million), as it seeks a greater foothold in Latin America (Reuters).

After more than a decade of legal maneuvering that culminated in a bitter boardroom fight, France’s Casino is finally taking control of Brazil’s biggest retailer, Pão de Açúcar. The question on investors’ minds: Can Pão de Açúcar continue its impressive recent growth with the French now calling the shots, rather than its longtime Brazilian chairman Abílio Diniz, who lost the battle for control (Reuters)?

Sequoia Capital is expanding to South America. The venture capital firm plans to send one of its partners, David Velez, to Brazil in July to head up its regional office, likely in São Paulo (New York Times).

The “Geeks on a Plane” project (yes, that’s really what it’s called), is an invite-only tour for startups, investors and executives to learn about burgeoning technology markets worldwide. Organized by 500 Startups, a Silcon Valley firm that helps fund emerging tech companies, the tour brought 42 tech insiders last week to Sao Paolo, Brazil (CNN).

AGRI ETC.

GraalBio Investimentos SA, the biofuels unit of closely held Graal Investimentos SA, plans to build five plants in Brazil that produce ethanol from sugar-cane residues. The first facility, planned for the state of Alagoas, is expected to start operating in December 2013, GraalBio said (Bloomberg).

The drought that has been affecting Brazil’s northeastern state Bahia for the past months can damage up to 40 percent of the agricultural production in the region (Xinhua).

A delay in harvesting the sugar cane crop in Brazil will see the world’s largest producer lose market share in China, set to be one of the season’s biggest importers, as Thailand increases its shipments to the Asian nation (Business Week).

AVIATION

Embraer SA, the world’s fourth- biggest planemaker, is boosting efforts to sell more jets in Asia, the Middle East and Africa as the European debt crisis saps demand in the manufacturer’s biggest market. European revenue made up 35 percent of Embraer’s first- quarter total, the most of any company in Brazil’s benchmark Bovespa stock index, according to data compiled by Bloomberg. Embraer’s regional-jet orders in Europe dwindled to five in the period, down from 20 a year earlier.

Deutsche Lufthansa AG will focus on growth at existing units, the head of the airline’s business in Spain and Portugal said, a week after other executives at the German company said it may look at bidding for TAP. International Consolidated Airlines Group SA, the owner of British Airways and Madrid-based Iberia, has repeatedly expressed its desire to buy TAP. Avianca Taca Holding SA Chief Executive Officer Fabio Villegas said on April 13 that Avianca Brasil, an airline held separately by his company’s owner, is also “interested in analyzing” TAP’s sale (Bloomberg).

Gol Linhas Aereas Inteligentes SA, Brazil’s second-biggest airline, is accelerating reductions in jobs and flights to avoid falling further behind Tam SA, whose pending acquisition will create the world’s largest carrier by market value. Fuel-guzzling jets and a struggle to raise fares underscore Gol’s challenges, said Pedro Galdi, SLW Corretora de Valores e Cambio analyst. Gol was the lone Latin American airline with a first-quarter loss, and the only one with a negative operating margin in 2011, according to data compiled by Bloomberg.

A number of announcements by Brazilian airlines in past weeks have shown the industry is set for yet more expansion plans in terms of international flights, with more Brazilians visited the U.S. and Europe than ever before. TAM and GOL, Brazil’s two biggest airlines, have both revealed their intention for more international services after submitting the plans to the National Civil Aviation Agency, ANAC (The Rio Times).

BANKING

Banco do Brasil SA took the No. 1 spot among equity underwriters for the nation’s share sales this year for the first time after almost doubling assets in three years and opening brokerages in Singapore and New York (Bloomberg).

SUBSCRIBE, IT’S FREE!

You request a free subscription to Brazil Weekly here and get email notifications on updates.

Brazil Weekly is also Facebook. You can like us here and join our group there.

You can also follow Brazil Weekly on Twitter at brazilweekly.

And be very welcome to join the Brazil Weekly networking and discussion group on Linkedin: Click here to join.

MINING & STEEL

Vale SA, the world’s biggest iron-ore producer, said it’s in talks about opening a second trans- shipment facility for mega-ships in Asia as it struggles to gain access to Chinese ports. South Korea is among locations under consideration, Global Marketing Director Claudio Alves told reporters (Bloomberg).

Australia’s Crusader Resources Ltd. plans to invest $400 million in a gold mining project in Brazil’s northeastern state of Rio Grande do Norte (Reuters).

ArcelorMittal, the world’s largest steelmaker, has suspended a $1.5 billion Brazilian expansion plan for lack of demand, Benjamin Baptista, president of the company’s Brazil unit said (Reuters).

Steelmakers Usiminas and Gerdau SA said they would not bid for ThyssenKrupp’s stake in the CSA steel slab mill outside Rio de Janeiro, amid growing signs that any sale of the $5 billion two-year old plant will be at a loss for its German parent (Reuters).

OIL & GAS

Repsol YPF SA said an area off the coast of Brazil it’s exploring with partner China Petroleum and Chemical Corp. contains the equivalent of at least 1.25 billion barrels of oil (Bloomberg).

BG Group Plc. plans to spend about $30 billion to expand oil and natural gas output in Brazil by 2025, an investment expected to provide the British energy company with about a third of its future worldwide output, a top BG executive in Brazil told Reuters.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s