OVERVIEW

Carrefour closer to Brazil listing with Diniz deal
Reuters: December 18
“Carrefour (CARR.PA) has sold a 10 percent stake in its Brazilian business to billionaire Abilio Diniz, a step towards a possible separate listing as the world’s No.2 retailer looks to raise cash to accelerate growth in its second-largest market… Carrefour said the deal, which will strengthen its local ties, could in future allow a listing on the Brazilian stock exchange.”

Brazil’s Rousseff vows clean-up of scandal-tainted Petrobras
Reuters: December 18
“[After] federal prosecutors have charged 39 people over the past week in an estimated $3.76 billion (10-billion-real) bribery scheme at [state-run] Petrobras… President Rousseff urged Brazilians not to lose faith in the vital oil producer, which government officials have long touted as the crown jewel of Latin America’s largest economy… Rousseff promised to unveil a set of measures to jumpstart economic growth when she starts her second, four-year term in office on Jan. 1.”

 

Focus: Changing Investment Landscape

Why Brazil Could Prove to Be the Best Place to Invest in 2015
The Street: December 9
“Some big investors are looking to buy assets on the cheap in Brazil because the stock market is down 25% off its highs in 2011 and Brazil’s currency, the real, at its lowest level versus the U.S. dollar since 2005… [While] the performance of Brazil’s stock market, Bovespa, is weighted heavily toward commodities… Unlike many other countries that are net exporters of commodities, Brazil’s economy is well-diversified as a result of postwar policies encouraging such diversification…”

Ramping Up Reform in Brazil
Value Walk: December 8
“In our view, investors should consider increasing allocations to the Brazilian real and locally denominated Brazilian bonds. While improvements will continue to occur over time, we believe that at current valuations investors are being adequately compensated for these risks. With a tacit acknowledgment from the government that change is needed, we believe that reformers such as Finance Minister Levy will help improve investor confidence and lift Brazilian asset prices over time.”

Brazil’s Real Rallies Most in a Month as Fed Supports Risk Bid
Bloomberg: December 17
“The real climbed for the first time in six days, rising 0.9 percent to 2.7153 per dollar at the close of trade in Sao Paulo after falling yesterday to a nine-year low. Swap rates, a gauge of expectations for changes in Brazil’s borrowing costs, advanced four basis points, or 0.04 percentage point, to 13.01 percent on the contract due in January 2017.”

 

Curated by Perry Nunes, Geoskope Junior Associate