26 May 2009 | Brazil Economic Scan

26-May-2009

Brazil Economic Scan

In this edition: Brazil to tighten fund regulation, Turkey and Brazil look to boost trade and partnerships, Brazil's BTG poaches 6 Credit Suisse bankers, Brazilian bond yields drop on rate cut speculation, Brazilian stocks climb on Monday.

Top headlines

Brazil to Tighten Fund Regulation to Stem Risk

• Brazil plans to tighten regulation of its $592 billion mutual fund industry to improve disclosure and protect investors as record low interest rates may prompt managers to replace government debt with stocks.
• Comissao de Valores Mobiliarios, the Rio de Janeiro-based securities commission, will demand retail funds disclose costs, simplify prospectuses and limit holdings of derivatives and assets that may be hard to sell, Carlos Alberto Rebello Sobrinho, a superintendent, said in an interview. (Bloomberg)

Turkey, Brazil look to boost trade, partnerships

• Brazilian President Luiz Inacio Lula da Silva and business leaders visited Istanbul on Thursday to secure a stronger foothold in Turkey's domestic market and make good on its regional ties.
• Trade between Turkey and Brazil, which totalled a little more than $1 billion last year, could grow by as much as 400 percent in the short term, Brazil's Foreign Trade Minister Miguel Jorge said on Thursday. (Reuters)

Brazil's BTG poaches six Credit Suisse bankers

• BTG, an investment bank formed by Brazilian billionaire and former UBS executive Andre Esteves, hired six bankers from rival Credit Suisse, the Swiss bank said on Thursday.
• The new hires include Marco Goncalves, a director and head of mergers and acquisitions for Credit Suisse in Brazil, and come about one month after Esteves made a comeback with the $2.5 billion surprise purchase of Banco Pactual from UBS. (Reuters)

Brazilian Bond Yields Drop on Prospects for Further Rate Cuts

• Brazil’s local-currency bond yields dropped the most in a week on the prospect of further cuts in interest rates after analysts forecast a steeper contraction for Latin America’s largest economy this year.
• “The contraction forecast for the economy supports the call for further interest-rate cuts,” said Paulo Petrassi, who helps manage 45 million reais ($22.2 million) in assets at Leme Investimentos in Florianopolis, Brazil. (Bloomberg)

Brazil Stocks Gain as Consumer Confidence Climbs; Bolsa Rises

• The Bovespa index added +0.5% to 50,816.24. The BM&FBovespa Small Cap index gained +0.6% to 692.41. Mexico’s Bolsa index climbed +0.4% and Chile’s Ipsa increased +1.4%. U.S. markets were shut for a holiday.
• Vivo added +0.8% to 37.70 reais. Redecard SA, which processes credit- and debit-card transactions, advanced +1.4% to 26.89 reais. Gol rallied +1.9% to 8.70 reais. The airline’s planned share and bond sale are easing liquidity concerns, said Victor Mizusaki, an analyst at Itau Corretora in Sao Paulo. (Bloomberg)

Source: Brazil Economic Scan