19 May 2009 | Brazil Economic Scan

19-May-2009

Brazil Economic Scan

In this edition: Brazil in recession in Q1 but "recovering quickly", Brazil to sell 10 and 30 year bonds to set benchmarks, Brazil to add 1m jobs in 2009, CM Capital hiring traders and acquiring brokerages in Brazil, Bovespa surges 5% on Monday.

Top headlines

Brazil Saw Recession In 1Q But Is Bouncing Back, Mantega Says

• Brazil probably entered a technical recession in the first quarter, but the economy is recovering quickly and will likely register 3% to 4% growth in the fourth quarter, Finance Minister Guido Mantega said.
• "There were already signs of recovery in March," he said, citing rising commodity prices and increased credit levels as key factors in the comeback. He added that the economy will quickly get back on track in 2010, registering 3% to 4% expansion for the year. (WSJ)

Brazil to Sell 10-, 30-Year Bonds to Set Benchmarks

• Brazil may offer more 10- and 30-year bonds. “Our strategy is to keep offering 10- and 30-year bonds,” said Deputy Treasury Secretary Paulo Valle, “That helps improve the liquidity in these important benchmark points.”
• The government sold $1.78 billion of 10-year notes in January and May, part of a wave of new issues by developing nations as the global financial crisis eased. Developing-nation governments and companies sold more than $57 billion of debt this year through the first week of May, up from $34.8 billion during the same period in 2008. (Bloomberg)

Brazil to add 1 mln payroll jobs in 2009 -minister

• Brazil's economy is on track to add more than 1 million payroll jobs in 2009, Labor Minister Carlos Lupi said on Monday.
• Official data showed that Brazil's job market improved for the third straight month in April, adding 106,205 payroll positions. (Forbes)

CM Capital Hires Brazil Traders, May Buy Brokerage

• CM Capital Markets Holdings SA’s Brazilian unit is hiring traders and may acquire brokerages to expand its three-month-old stock trading business, part of a push by international brokers into Latin America’s biggest market.
• Competition is growing in Brazil’s stock and derivatives trading market as international brokers open local businesses. ICAP Plc, the world’s biggest brokerage of transactions between banks, started trading Brazilian stocks and fixed-income securities in April. (Bloomberg)

Bovespa Gains, Erasing Last Week’s Losses, on Rate Speculation

• The Bovespa rose the most in two weeks, surging 2,455.63, or +5%, to 51,463.02. The index lost -4.7% last week. The BM&F Bovespa Small Cap index added +4.9% to 705.82.
• Gafisa SA and B2W Cia. Global do Varejo gained more than +6%, on speculation lower borrowing costs will boost consumer spending. Cia. Vale do Rio Doce, the world’s biggest iron-ore producer, jumped +6.3% after rival Rio Tinto Group said China may be stockpiling steel on speculation government spending will drive demand. Cosan SA Industria & Comercio added more than +6% on the prospect of sugar producers in India resuming imports. (Bloomberg)

Source: Brazil Economic Scan