Posts Tagged Brazil

The Economist magazine has a series of predictions in the World in 2010 and one of them is that Brazil will be in capable hands regardless of whether the conservative or the socialist wins.

Latin America’s largest economy is enjoying its best moment for a long time. One of the last countries to enter the global downturn started by the financial sector in 2007, Brazil was also one of the first to come out of it. For the first time in its history it has found a combination of economic growth, low inflation and full democracy—and the good fortune looks set to continue.

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http://www.economist.com/theworldin/displayStory.cfm?story_id=14742466&d=2010
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Wealth Management

Brazil could be the hottest emerging market in the world right now.  There is a tremendous amount of capital coming into Brazil and we think the Ministry of Finance is not only trying to stop the currency from rising to quickly (and upsetting exports) but also to perhaps prick a swelling asset price bubble in advance. This move won’t help for long because like water, capital always finds a way in if it is determined to but it sends a good signal to the markets that Brazil won’t tolerate unhealthy imbalances.  Expect this move to simply bolter confidence in Brazil’s corporate governance as we watch the real valuate and capital rush in.

http://www.ft.com/cms/s/0/ffe6041c-bda1-11de-9f6a-00144feab49a.html
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Private Banking

The FT series the “Short View” has done an excellent job in this video http://www.ft.com/cms/s/0/857a82f6-b36b-11de-ae8d-00144feab49a.html to explain the Brazil phenom. Decoupling is the notion that emerging countries like Brazil can grow while rich countries are in recession. CR Capital makes the case that whether that is true or not, the hallmark stock in Brazil are going to outperform in the medium and long term either way. This is especially true if one manages the average price per share.

As the FT notes, The international community has a strong tendency to misjudge Brazil. Seven years ago, international investors fled in fear at the election of the leftwinger Luiz Inácio Lula da Silva as president. They created the buying opportunity of a lifetime. Since then, in dollar terms, Brazil’s Bovespa has gained some 1,100 per cent more than the S&P 500.

In April last year, Standard & Poor’s elevated Brazil’s sovereign credit to investment grade – and almost perfectly called the top before a calamitous collapse.

As the crisis took hold last year, international agencies worried that Brazil could face a classic emerging-market crisis, with a collapsing currency leading to default. Since last November, the Bovespa has gained 180 per cent.

EDITOR’S CHOICE
Financialisation genie set loose – Oct-07.In depth: Future of investing – Oct-06..Last week, the International Olympic Committee awarded the 2016 games to Rio de Janeiro. Lula now apparently has even greater persuasive powers than Barack Obama. On Wednesday, Brazil also hosted the biggest initial public offering in the world this year, valuing Banco Santander’s Brazilian business at more than any other since Visa’s March 2008 offering.

Are investors right this time?

Possibly. The Bovespa’s price to book value ratio of just over 2 is almost identical to that of emerging markets as a whole, and has risen in line with other emerging markets – last time around, the Bovespa at one point traded at a book multiple of 2.5, and was far ahead of other emerging markets. Its ability to weather last year’s outflow of funds was valid evidence that it is on a stronger financial footing than many had believed.

But a rise of 180 per cent in less than a year still shows overheating. Brazil remains a proxy for the world’s hopes in “decoupling” – that emerging markets can grow even if developed markets are in recession. The fervour suggests such hopes are too high again.

Brazil Redeemed?

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Offshore Private Banking

Sure. The US Olympic Committee may have been incompetent. Madrid may have been connected and Japan stockpiled cash to try and buy the deal. But in the end, Brazil is on a run with the wind behind them. The Olympic bid is just one more sign of the times.

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Family Office

Let the Good times Roll

Sometimes I almost feel like I think something, comment on it and then an affirmation appears in the popular press. On this blog, I have stated that Brazil, now, is like the United States in 1982. This article that appeared in the Economist today about a former Mormon missionary who is now leading the charge of the “gospel of prosperity” n Brazil. The founder of Jet Blue, David Neeleman, has something to say about it.

On a recent Monday at São Paulo’s international airport, a group of some 30 young American Mormons in dark suits with lapel badges bearing their names were waiting to clear immigration and begin proselytising. No doubt many of them were already looking forward to returning home. But perhaps a few will form an enduring attachment to a country that resembles America in so many ways, and will use their experience of converting the natives to start a business in Brazil too.
http://www.economist.com/people/displaystory.cfm?story_id=14302634

He thinks Brazil is just as good of a place to do business as the USA...and he IS in Brazil

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Family Office