Brazil’s economy stalled in May from the prior month but topped pessimistic market forecasts, official data showed, signaling that the world’s No. 6 economy could be on even footing to resume growth in coming months after massive government stimulus (Reuters).
The once booming South American powerhouse of Brazil will grow less than the U.S. this year. The U.S. economy is forecast to grow by around 2 percent in 2012, the best of the advanced economies. Meanwhile, Brazil’s GDP momentum has completely stopped, making it the worst performer of the big four emerging markets, the BRICs (Forbes).
Brazil has cut its key interest rate to the lowest rate ever in a move to kickstart its sluggish economy. The central bank lowered the nation’s benchmark Selic rate from last month’s 8.5 percent to 8.0 percent, saying the risks of an inflationary spike are “limited” (Washington Post).
Credit in Brazil is maxing out. A spike in defaults signals a need for caution, not yet panic (The Economist).
Brazil’s trade balance registered a surplus of $7.07 billion in the first half of this year. The surplus is the result of the difference between the total of $117.215 billion in exports and $110.142 billion in imports (Agencia Brasil).
Brazil’s government must slash taxes and curb spending to spur economic growth, as protectionist measures and growing state intervention are undermining the country’s competitiveness, billionaire financier André Esteves said (Reuters).
Brazil’s population and economic growth have pushed it to the brink. Whether by road, rail or air, the country is unprepared to handle rising transport demand. Now, the 2014 World Cup and 2016 Olympic Games approaching, host country Brazil’s transportation revamps are more pressing than ever (Global Post).
When strategists at big Brazilian investment firms like Itau steer their wealth management clients away from their home country and up north, to Mexico, it’s worth noting. Brazil is a big country. It’s got a diverse economy. But it’s no longer Latin America’s favorite growth story. It’s going to grow around 2 percent this year, worse than it did last year. It’s fortunes are tied to China, to some extent, an economy still facing a hardish soft landing and needing monetary stimulus (Forbes).
Heineken Holding NV , the world’s third-largest brewer, will delay investments in Brazil after the government raised taxes on beer (Reuters).
Despite a steady climb in sales over the last five years and an expanding number of available brands, cachaça has a narrow user profile. Few liquors are so tied in consumers’ mind to a single cocktail (and in this case, one that may well be past its zenith). But cachaça may be ready for its second act (The New York Times).
Eike Batista’s resolve remains unshaken. After share prices for his six publicly traded companies recovered some of their losses this month, his net worth has rebounded to $20.4 billion from a low of $19.6 billion on June 28, according to the Bloomberg Billionaires Index. He is the 22nd richest person in the world. Batista’s holding company, EBX Group Co., said its companies have enough cash to plow ahead with a $15.7 billion investment plan (Bloomberg).
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Wet weather over Brazil’s cane belt continues to drag down sugar production in the world’s largest supplier of the sweetener, with output trailing the last crop by 29 percent by the end of June, milling industry association Unica said (Reuters).
Gol Linhas Aereas said it is expanding its South American destinations and will adjust international routes where the carrier’s occupancy has fallen short of competitors. Beginning this month and next, Gol will offer direct flights from Sao Paulo to Montevideo, Asuncion and Santa Cruz, Bolivia. It will also increase the frequency of flights to Buenos Aires from Brazil’s southern states (Reuters).
Embraer, the world’s largest maker of regional aircraft, said that combined deliveries of executive and commercial planes rose sharply in the second quarter, while its backlog of firm orders tumbled in the same period (Reuters).
China’s Hebei Airlines acquired five more Embraer190s jets to join its E-Jets fleet by the end of 2013. The total value of the deal, at list price, is USD 226 million. The order has been registered in the Company’s backlog for the second quarter of the year (Embraer).
If you’ve flown up to half-way across the U.S., chances are good you’ve been on a plane made by Brazilian aircraft manufacturer Embraer. Nearly every U.S. airline or their regional partners are flying its newer E-Jets or older, smaller ERJ jets that seat 37 to 50 passengers. In all, Embraer counts more than 850 of its aircraft in the fleets of U.S. carriers (USA Today).
BANKING & FINANCE
Itaú Unibanco Holding , Brazil’s largest private-sector lender, formed a 1 billion real ($493 million) joint venture with smaller rival Banco BMG to offer payroll-deductible loans, the fastest-growing personal loan segment in Latin America’s largest economy (Reuters).
Banco do Brasil SA is looking for acquisitions in Colombia, Peru, Uruguay and Chile as it seeks to expand its retail banking outside Brazil, newspaper Valor Economico reported, citing international business head Paulo Caffarelli (Bloomberg).
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MINING & STEEL
Two of Brazil’s most prominent dealmakers have joined forces to create a $520 million mining venture, confident that recent drops in iron ore and metal prices make some assets in the sector ripe for acquisitions. Investment bank BTG Pactual, controlled by billionaire financier André Esteves, has teamed up with Roger Agnelli, former chief executive of mining company Vale , to create B&A Mineração. BTG Pactual and Agnelli’s AGN Participações will each own half of São Paulo-based B&A (Reuters).
Hong Kong’s Honbridge Holdings Ltd plans to build a 420-kilometre pipeline to ship iron-ore from a mine in Brazil’s Minas Gerais state to the port of Ilheus on the country’s Atlantic coast (MercoPress).
OIL & GAS
Oil companies are finding signs of natural gas in all the wells drilled in Brazil’s Sao Francisco Basin, a landlocked petroleum frontier in the country’s Minas Gerais state, Magda Chambriard, director-general of Brazil’s petroleum regulator, ANP, said (Reuters).
A November oil spill at an offshore field operated by Chevron Corp. northeast of Rio de Janeiro did not kill or harm marine life, according to a crime lab report from the Brazilian Federal Police (Reuters).
Petrobras is considering putting two refineries up for sale abroad. It is part of the company’s strategy to sell assets to raise US$ 14.8 billion (R$ 30 billion) to finance its investment plans that focus on exploring pre-salt fields in Brazil. The refineries are in Japan and the U.S., and have never given the expected return. Petrobras confirmed that it is considering selling its refine assets abroad (Folha).
Suzlon Energy Ltd. , India’s biggest wind-turbine maker, agreed to build a components factory in Brazil as the country’s state development bank suspended loans to developers buying the machines from foreign companies (Bloomberg).