Category Archives: Country report

Brazil: emerging opportunities

Brazil, the Latin-American biggest country, the member of the BRICS group (with Russia, India, China and South Africa) and one the main emerging countries deals with two challenges: a bigger recession than expected and a presidential election in October with a possible change. President Rousseff and candidate Silva are running neck-and-neck in the polls.

Markets worked with three scenarios after the election: Rousseff reelection, the least preferred, and a victory by the centre-right or the ecosocialist Silva. Now, as centre-right is almost out of the competition in the polls, uncertainty increases amongst investors.

As an emerging country, Brazil has still many opportunities to develop. There is still a lack in public services and infrastructures, but social standard of living improved in the last years. What about foreign investments? As the chart shows, it was a very interesting country for money:

Foreign investment in Brazil since 1995

What about the stock exchange? Main winners in Bovespa, Sao Paulo stock exchange main index, are currently a company focused on education (Estacio Participaçoes), financial companies (Cielo, Banco do Brasil  and CETIP) and a food producer (JBS). These are the results shown in T-Advisor:

Best performers in Bovespa

On the other side, the worst performers are industrials (Gerdau Metalurgica and MMX Mineraçao), real estate and building companies (Rossi Residencial and PDG Realty) and the telecom Oi. These are the figures in T-Advisor:

Worst performers in Bovespa

T-Advisor system has also found a short-term market opportunity: Tractebel Energia, with the following main figures:

Tractebel Energia main figures

As it is easy to see, Brazil is a complex country. Although industry and mining resource branches are one of the strongest in the world, opportunities for investors are more linked to services, as the population improves progressively its standard of living.