3 June 2009 | Brazil Economic Scan

3-June-2009

Brazil Economic Scan

In this edition: Brazil's trade surplus narrows to $2.65 bln in May, Brazil seeks to ensure Petrobras pre-salt exploration, Bradesco CEO cuts 2009 loan growth view, Brazilian stocks attract record monthly foreign inflows, brazilian stocks fall slightly.

Top headlines

Brazil May Trade Surplus Narrows To $2.65B

• Brazil's foreign trade surplus narrowed in May to $2.65 billion from $3.71 billion in April as both imports and exports declined in the face of a persistent global crisis.
• The May figure was slightly higher than analyst expectations. A Dow Jones poll of eight analysts predicted a May trade surplus of $2.34 billion. The surplus in May of 2008 was $4.07 billion. The big May, 2008 surplus was due to a surge in exports following a customs workers strike. (Wall Street Journal)

Brazil Seeks to Ensure Petrobras Pre-Salt Exploration

• Brazil wants to ensure that state- controlled Petroleo Brasileiro SA has access to new oil exploration rights in the country’s pre-salt offshore region, home to the largest oil find in the Americas in 30 years.
• Energy Minister, Edison Lobao, said that Brazil’s pre-salt oil deposits already discovered will at least double the country’s proved crude reserves, currently estimated at about 14 billion barrels, or 20 years of Brazil’s needs. (Bloomberg)

Bradesco CEO cuts 2009 loan growth view on GDP

• Brazil's second-largest private sector bank Bradesco cut its forecast for lending growth in 2009 as a slowdown in the economy reduces demand for credit, Chief Executive Luiz Carlos Trabuco Cappi.
• Lending should grow slightly more than 10 percent in 2009, down from a previous estimate of 15%, Trabuco said. Bradesco's total credit portfolio fell 0.5% at the end of March from December to 214.3 billion reais ($111.3 billion). (Reuters)

Brazil Stocks Attract Record Monthly Foreign Inflow

• Foreign investors bought 6.08 billion reais ($3.16 billion) more in stocks than they sold in May, according to data reported by the Sao Paulo-based exchange BM&FBovespa SA on its Web site. That surpassed the previous monthly record of 6 billion reais in April 2008.
• “At the end of the day, stocks trade on earnings growth and cash flow growth and Brazil looks attractive,” said Audrey Kaplan, who helps manage $23.4 billion in equities at Federated Investors Inc. in New York. (Bloomberg)

Brazil Stocks Fall on Commodity Slump, Valuations; Bolsa Climbs

• The Bovespa slid -0.9% to 53,999.52, the biggest decline since May 21. The gauge’s 44% surge this year sent it to 22 times the combined reported earnings of companies on the index. That’s the highest price relative to profit in at least five years.
• Vale SA lost -2.5% after Goldman Sachs said it sees “downside risk” to the miner’s iron ore shipments in the second quarter. Homebuilder Gafisa SA fell the most in the Bovespa index after it announced plans to sell new shares. Empresa Brasileira de Aeronautica SA, the world’s fourth-largest aircraft maker, declined -4.6% after Bank of America Corp. said it may not reach its sales target for this year. (Bloomberg)

Source: Brazil Economic Scan