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Non-Tech : The Brazil Board -- Ignore unavailable to you. Want to Upgrade?

To: Julius Wong who wrote (192)	3/30/2011 6:51:30 AM
From: DewDiligence_on_SI	1 Recommendation Respond to of 2504

Brazil’s overvalued currency probably has something to do with it.

To: Julius Wong who wrote (192)	4/10/2011 5:12:59 AM
From: elmatador	1 Recommendation Respond to of 2504

BRL free rein to appreciate. Brazil: changing sides in currency war In the fight against inflation, it is the government’s friend. And right now, the government needs all the friends it can get. Brazil: changing sides in currency war April 8, 2011 11:04 am by Jonathan Wheatley 6 0 Another day, another macro-prudential measure from Brazil. On Thursday night Guido Mantega, finance minister, announced a doubling in the tax due on personal loans, from 1.5 to 3 per cent a year. Measures like this have let Brazil reduce its reliance on high interest rates, formerly its only weapon against inflation. The trouble with high rates is they drive the currency higher and that hurts competitiveness – hence the whole currency war. But you can’t have everything, and with inflation pushing higher Brazil appears to have decided that the strong BRL is its friend, after all. First, a quick glance at Thursday’s measure. With consumers paying 238.3 per cent a year for credit card debt, it’s hard to see how an extra 1.5 points will make much difference. But as Tony Volpon at Nomura points out, the measure may curb supply of credit (rather than demand) because wider spreads provoke more defaults, so banks may lend less. In any event, it doesn’t look like this will slam the brakes on consumer credit, currently expanding at a rate of 22 per cent a year – the government reckons 12 to 15 per cent would be “adequate”. And what about inflation? The central bank’s latest weekly survey of about 100 market economists has it above 6 per cent by year-end. The survey’s “top 5? best-rated economists say it will be 6.4 per cent. Not only is inflation way above the government’s 4.5 per cent target. It is threatening to breach the upper limit of its 2 percentage point tolerance. The government has been right to look beyond interest rates for ways to fight inflation. Now, it seems, its reach has embraced the currency itself. On Thursday – after Wednesday night’s surprisingly weak “currency measures” – the real burst through the R$1.60 barrier against the US dollar and kept right on going. It now looks likely to settle into a new band of R$1.55 to R$1.60 – not far from where it was in pre-crisis days. So far, the government has not reacted. What’s the pay-off? The government has three macro priorities: low inflation, investment, and competitiveness. All of those can be addressed by micro-prudential measures: overhaul the tax system and the labour code, improve public education, etc, etc. Fat chance. If you limit yourself to monetary policy and macro-prudential measures, you can’t have all three. Give up the fight against inflation, and you have a popular revolt. Give up on investment, and the World Cup and Olympics will be a disaster for a start – and never mind all the other infrastructure needed irrespectively. Give up on competitiveness – well… Who will be hurt? What commodities exporters lose on the currency, they regain in part from rising prices. What manufacturers lose in competitiveness, they regain in part on the components they import. A stronger real will hurt, no doubt about that. But perhaps not that much. In the fight against inflation, it is the government’s friend. And right now, the government needs all the friends it can get. blogs.ft.com

To: Julius Wong who wrote (192)	5/1/2011 5:51:09 AM
From: elmatador	Respond to of 2504

Abu Dhabi’s Mubadala plans $13 billion investment in Brazil for investment fields in all of oil and gas, aluminum, semiconductors, infrastructure and aerospace. Abu Dhabi’s Mubadala plans $13 billion investment in Brazil Saturday, 30 April 2011 By DINA AL-SHIBEEB Al Arabiya with Agencies Mubadala, the investment vehicle of Abu Dhabi, planning a $13 billion investment package in a variety of industries in Brazil, Arabian Business reported a senior government official as saying on Saturday. The announcement, which was initially made through the Arab Brazil News Agency (ABNA), came after Waleed al-Muhairi, the head of the public joint stock company, met with the Brazilian minister of development, industry and foreign trade, Fernando Pimentel. According to the ministry’s spokesman, the meeting was an initiative by the Emirati company, and that Mr. al-Muhairi told Brazilian officials that his company has $13 billion available for investment fields in all of oil and gas, aluminum, semiconductors, infrastructure and aerospace. Mr. Al-Muhairi is also aiming to return to Brazil to stretch the investment fields suggested to include the agribusiness sector. Brazil is considered to be one of the Big Emerging Market (BEM) economies, with an average annual GDP growth rate of over 5 percent. This has stimulated investors’ confidence in the country, which has a population of 201 million. Brazil’s GDP is $2 trillion, and the per capita income is $10,700. According to the Brazilian ministry, the country’s exports to the Middle East reached $870 million in March 2011, a 35.5 percent increase compared to the same month in 2010. The performance was driven by sales of meats, sugar, iron ore, soybean and aircraft. Brazilian overall exports reached $19.3 billion last month, ABNA reported. Mubadala is a wholly owned investment vehicle of the government of Abu Dhabi. It was relatively unscathed by the international financial meltdown. Abu Dhabi, which has more than 7 percent of the world’s proven crude reserves of 1.3 trillion barrels, is planning to cut its reliance on oil as it seeks to diversify its industry to include more of real estate and aerospace. Mubadala owns stakes in high profile companies such as the US-based AMD and GE. In March 2011, it posted a loss of AED 315 million ($85.76 million) for 2010 due to mark to market write-downs. Earlier this month, Mubadala said it plans to boost spending to about $16.3 billion in 2011. The company will deploy a “substantial” portion of capital and investment expenditure over 2011 to 2015 on real estate, oil and gas, and public-private partnership projects, according to Arabian Business. (Dina Al-Shibeeb of Al Arabiya can be reached at: dina.ibrahim@mbc.net)