Brazil’s economy grew just 2.7 percent in 2011 as soaring business costs and uncompetitive industries took the shine off of what had been one of the world’s most dynamic emerging markets, and data pointed to only a modest recovery ahead this year (Reuters).
Brazil’s government promised aggressive new stimulus measures after data showed the economy expanded just 2.7 percent in 2011, raising fears that one of the world’s most dynamic emerging markets is now slipping into a new era of mediocre growth. The sharp slowdown during President Dilma Rousseff’s first year in office saw Brazil underperform its peers among big developing countries as local industries struggled with soaring business costs and an overvalued currency. A rebound in consumer spending and strong agricultural exports only barely allowed Brazil to avoid recession during the second half of the year (Reuters).
Brazil’s Central Bank slashed interest rates by a larger-than-expected 75 basis points, stepping up its battle to revive struggling industries. In its boldest move since August, when it surprised markets and began the current round of cuts, the central bank lowered its benchmark Selic lending rate to 9.75 percent from 10.50 percent in a split decision (Reuters).
Brazil was the market that saw the highest increase in home prices among the different markets around the world last year, with an increase of 26.3 percent (Xinhua).
The latest economic growth figures from Brazil may not have been as strong as the government had hoped, but the country has still overtaken the UK as the sixth-biggest economy in the world.
South America’s largest country is one of the Brics, a group of emerging economies that also includes Russia, India and China, and which together provide a striking contrast to the current gloom prevailing over some of the more established Western powers. In fact this latest news allows Brazilians a moment of indulgence despite what was actually a year of quite sluggish growth (BBC).
Brazil’s rapidly expanding middle class and complex intellectual property framework is creating a host of new opportunities and challenges for western firms, according to a new report published by Thomson Reuters. The report, “The Grown-Up BRIC: Innovation & Brand Expansion in Brazil,” tracks patent and trademark activity, as well as scientific literature output, over the last decade to benchmark current levels of innovation and brand expansion. Here are some of the key findings of the new research.
Pricewatercooperhouse has recently released a study revealing that in 2011 hackers have stolen US$ 1 billion from companies in Brazil. On the top of that, BSA (Business Software Alliance) ranked Brazil the least prepared nation to adopt cloud computing technology among the 24 countries that account for 80 percent of the world’s information and communications technology (Forbes).
Carlyle, a Washington-based private equity firm, announced that it had acquired an 85 percent stake in Ri Happy, Brazil’s largest toy chain, for an undisclosed amount. The firm plans to invest 200 Brazilian reais ($116.8 million) in the toy retailer over the next three years (The New York Times).
Although the Chinese electronics company, Foxconn began making iPhones in Brazil last year at its new factory in Jundiaí (São Paulo), prices for the ´Made in Brazil´ phones remain high. The factory was originally built to produce iPads, but production of the tablet could not start because according to Evandro Oliveira Santos, director of United Steelworkers of Jundiaí, the manufacturer was still waiting on tax incentives from the so-called Lei do Bem (Goods Law) (The Rio Times).
Non-financial businesses in Brazil recorded a combined financial loss of R$15.3 billion last year. That’s R$11 billion more than the previous year’s R$4 billion. In the second half of last year, the appreciation of the dollar against the real — from R$1.562 to R$1.869 (up 19.65 percent) — took companies by surprise (The Rio Times).
J&F Participacoes SA, the holding company that controls meatpacker JBS SA, will name former Brazilian central bank president Henrique Meirelles its chairman. Meirelles, 66, will be the Sao Paulo-based company’s “strategist” and will create its board with Chief Executive Officer Joesley Batista. Batista will remain as chairman of JBS, the world’s biggest beef producer (Bloomberg).
Brazil’s development bank BNDES may lend as much as 2.1 billion reais ($1.2 billion) to Fiat SpA to build a car plant in Pernambuco state (Bloomberg).
Chilean airline LAN expects a share swap that wraps up a takeover of Brazil’s TAM to be completed by the end of April or beginning of May, LAN’s President and Chief Operating Officer Ignacio Cueto said (Reuters).
BANKING & FINANCE
BTG has spent at least $1.5 billion on a series of takeovers in the past five months, eating up capital. The most recent deal, a cash-and-shares purchase of Celfin Capital, a Chilean brokerage, implied a valuation of $14.8 billion. The moment to list, it seemed, had arrived. With more cash, BTG will be able to continue its shopping spree without overstretch (The Economist).
Itau Unibanco Holding, Brazil’s most profitable bank, said on Wednesday that it received approval from Colombia’s financial superintendent to set up a representative office (Reuters).
Redpoint Ventures and BV Capital’s eVentures are launching a Brazil-based venture-capital firm, Redpoint eVentures, headquartered in Sao Paolo, the companies said (Reuters).
Brasil Distressed, the two-year-old financial firm also known as BrD, plans to raise as much as $100 million from investors to boost purchases of distressed assets from mid-sized companies (Bloomberg).
MINING & STEEL
Vale said it will go to the courts to fight a government claim that it owed back taxes on its earnings from foreign subsidiaries, after out-of-court efforts to settle the dispute failed (Reuters).
OIL & GAS
Oil prices are likely to fall as political tensions fuelling the rise ease, which would make any increase in Brazilian fuel prices unnecessary, the chief executive officer of Petrobras said. “We expect that prices will cool, as lower geopolitical pressure in the big petroleum producers is reduced,” CEO Maria das Graças Foster told Globo News (Reuters).
British oil producer BP Plc said it will buy a 40 percent stake in four exploration blocks owned and operated by Brazil’s state-controlled oil company, Petrobras, expanding its presence in one of the world’s fastest-growing oil regions (Reuters).
Norway’s Statoil is the front runner to buy the Brazilian business of oil and gas producer Anadarko Petroleum Corp for about $3 billion (Reuters).
Danish shipping and oil group A.P. Moller-Maersk’s offshore supply ship unit has won three contracts worth about 1.6 billion crowns ($284.81 million) in total from Brazilian oil company Petrobras , Maersk said (Reuters).
Barra Energia Petroleo e Gas, an oil startup with stakes in two projects near Brazil’s largest offshore discoveries, will consider a share sale among options to finance investments if it buys more assets. Barra will also sell a stake to a “strategic partner” or get additional financing from its two main shareholders if the company expands in Brazil’s South Atlantic (Bloomberg).
OGX Petroleo & Gas Participacoes SA, the oil company controlled by Eike Batista, is producing 15,000 barrels of crude per day after starting output at an offshore well in Brazil earlier this year, the billionaire said (Bloomberg).
President Dilma Rousseff endorsed Petrobras Chief Executive Officer Maria das Gracas Foster negotiations with Samsung Heavy Industries Co. for the South Korean company to buy the control of Estaleiro Atlantico Sul SA, Valor Economico reported (Bloomberg).