The Brazilian government will continue to take steps to bolster domestic consumption and ensure the competitiveness of local industries, Finance Minister Guido Mantega said. Mantega also reiterated that the government stands ready to take additional measures to prevent Brazil’s currency, the real, from strengthening too much against the U.S. dollar (Reuters).
Analysts now foresee an annual inflation of 5.06 percent by the end of this year compared with last week’s 5.27 percent prediction (Reuters).
The glowing image of Brazil rests on an extremely shaky premise: commodity prices. The country has grown largely in concert with surging demand for its stores of oil, copper, iron ore, and other natural resources. The problem is that the global appetite for those commodities is beginning to fall. And if Brazil does not take steps to diversify and boost its growth, it may soon fall with them (Foreign Affairs).
Out of the world’s five major high-growth economies – Brazil, China, India, Mexico and Russia – Brazil is ranked the most expensive country to do business in, according to a recent report. The 2012 Competitive Alternatives survey, released by KPMG International, compares locations in more than a hundred cities in fourteen countries around the world (The Rio Times).
José Valledor, president of McDonald’s Brazil since august 2011, says the fast-food company wants to expand as the Brazilian economy grows. The world-known fast-food brand plans on targeting the new middle class (Class C and D) and the mid-sized cities in Brazil in the coming years (The Rio Times).
Brazil is a difficult market to navigate for international luxury fashion brands. But still, Prada, Gucci, Bottega Veneta, DVF and Chanel have all recently launched stores in the country. Business of Fashion goes behind the headlines and speaks with three powerful women with intimate knowledge of Brazil’s fast-changing fashion terrain.
Portuguese conglomerate Semapa has made a proposal to major shareholders in Cimpor to try to keep the country’s biggest cement maker in Portuguese hands rather than see it taken over by Brazil’s Camargo Correa (Reuters).
Brazil’s sugar production should rise 5.3 percent to 38.9 million tonnes in the 2012/13 season that has just started, the government crop supply agency Conab said, up from 36.9 million tonnes in the prior season (Reuters).
Brazil has no plans to offer further incentives for automakers, but the government does not rule out taking steps to boost the competitiveness of other industries, Trade and Industry Minister Fernando Pimentel said in an interview. The Brazilian government wants to encourage automakers to invest more heavily in innovation to meet surging demand in the world’s fourth biggest auto market (Reuters).
Brazil’s auto manufacturers will invest 22 billion U.S. dollars by 2015 to improve the sector’s competitiveness, President of the Motor Vehicle Producers Association (Anfavea) Cledorvino Belini said (Xinhua).
Embraer said that Chief Financial Officer Paulo Penido Marques has resigned, forcing the company to fill that post for the second time in a year (Reuters).
US Boeing and Brazil’s Embraer signed an agreement to work cooperatively on aircraft safety, operational efficiency and manufacturing productivity (MercoPress).
BANKING & FINANCE
Gávea is not the only Brazilian asset manager to have attracted the attention of outsiders. But Gávea is the industry’s most gilded name. In Arminio Fraga, the joint founder of Gávea, the firm has Brazilian finance’s equivalent of Shakira—a celebrity whose fame has spread beyond Latin America (The Economist).
Ideiasnet, a Brazilian venture capital company that invests in fast growing tech businesses, has sold its stake in Softcorp, a software distribution company. With over 20 years of market experience, Softcorp is one of Microsoft’s main partners for systems and solutions development in Brazil. The company value paid was R$ 15 million ( US$ 8.25 million) (Ideiasnet).
Brazil’s government toughened its tone and demanded that private-sector banks bolster lending and lower interest rates to add momentum to a still feeble recovery in Latin America’s top economy. But caution on the part of banks such as Itau Unibanco and Banco Bradesco has persisted because of high consumer and company delinquencies (Reuters).
State-run lender Caixa Economica Federal said it is offering cheaper credit to businesses and individuals, following on the heels of aggressive new loan policies from state bank Banco do Brazil. The lender, looking to grow at the twice the pace of Brazil’s non-state banking sector, has set aside 300 billion reais ($164 billion) for new loans this year, up 24 percent from 2011 (Reuters).
Brazil’s five interest rate cuts and the use of 2.5 billion reais ($1.4 billion) of workers’ compensation funds to buy mortgage bonds are breathing life into the home loan market as the government seeks to address a shortage of 6.3 million homes (Bloomberg).
BM&FBOVESPA and the Santiago Stock Exchange (BCS) signed an agreement that sets out the implementation of the Chilean derivatives market at the Santiago Stock Exchange. The agreement provides for the transfer of derivatives market knowledge from BM&FBOVESPA to the Chilean Exchange, encompassing products such as equity, interest rate and FX options and futures. The alliance between the two exchanges began in December 2010 and other strategic projects are in the pipeline, such as connectivity and order routing and market data distribution in particular (BM&F Bovespa).
Freight movement on the Brazilian rail network grew by 87.6% between 1997 (the year that sector privatization began) and 2011. According to a study by the National Association of Rail Carriers (ANTF), annual freight movement rose from 253.3 million tons in 1997 to 475 million tons in 2011. Freight movement registered an increase of 5 million tons compared to 2010 (Portal Brasil).
MINING & STEEL
Brazil’s antitrust regulator prohibited steelmaker CSN from increasing its stake in rival Usiminas, heading off a stock-buying spree triggered by Italian-Argentine Techint’s takeover. The regulator Cade also suspended shareholder rights associated with CSN’s stake, such as naming board members (Reuters).
Rio Verde Minerals Development Corp said it got a trial mining permit for its Fosfatar phosphate project in Brazil. The trial mining permit, known as Guia de Utilizacao, is renewable up to 36 months, the company said. Rio Verde develops fertilizer projects, including one potash project, in north and northeastern Brazil (Reuters).
Anglo American had a license for a power line at its Minas-Rio iron-ore project in Brazil suspended. A Minas Gerais state court suspended the license required to install the line. Prosecutor Francisco Chaves Generoso told the court in a civil lawsuit that Anglo failed to fulfill some of the conditions to obtain the permit (Bloomberg).
OIL & GAS
Petroleum output fell 2 percent in February from the previous month to 2.627 million barrels of oil and natural gas equivalent (boe) a day, the country’s oil regulator, the ANP, said. Output was up 6.9 percent from a year earlier, as new producing fields came on line (Reuters).
Cosan is in talks to buy British BG Group’s stake in the gas distributor Comgas, in a deal that would further diversify the Brazilian energy group. The plan raised investors’ concerns about new debts and cost savings and sent Cosan’s shares lower (Reuters).
A Brazilian judge denied an injunction seeking to bar U.S. oil company Chevron Corp and drill-rig operator Transocean Ltd from operating in Brazil after two offshore oil leaks, a federal court in Rio de Janeiro said (Reuters).
Keppel Corp has signed a letter of intent to build five semisubmersible rigs for Sete Brasil for around $4.12 billion, paving the way for what will be the biggest-ever deal for the Singapore firm (Reuters).
Petrobras said it had found a new offshore reservoir of “good quality” oil located outside the first cluster of discoveries in the Santos Basin presalt (Reuters).
Petrobras has agreed to work with the Argentine government on a new investment plan for Argentina, where one of the Brazilian oil giant’s drilling permits was cancelled, officials said (LAHT).
Brazil approved plans to hold an auction of airwaves by June 10 for use in fourth-generation wireless networks. The rules for the 4G auction were cleared by the board of Anatel, as the nation’s telecommunications regulator is known. Carriers that win airwaves in the auction must offer the new technology in the six host cities of soccer’s Confederations Cup by April of next year and in the 12 cities holding 2014 World Cup matches by the end of 2013, according to a presentation by Anatel (Bloomberg).