Category: Brazil

Brazil’s lower house in Congress has elected Aldo Rebelo as president of the Chamber of Deputies, replacing Severino Cavalcanti who resigned on 21 September because of allegations of bribery. Rebelo, a former cabinet minister and the favored choice of President Luiz Inácio Lula da Silva, won in the second round of votes, after a tie with José Thomaz Nonô with 182 votes a piece in the first round. A total of 509 deputies of the lower house of Congress took part in the vote.

Venezuela and Brazil are planning to announce five joint energy projects to include areas such as refineries, gas and infrastructure. The plans are set to be presented later this week at a summit of South American presidents in Brasilia. State-owned PDVSA of Venezuela and Petrobras of Brazil will work jointly in the projects.

The Congressional Committee investigating allegations of bribery and corruption in the Chamber of Deputies has called Gustavo Marin, president of Citigroup Brazil, to give evidence today. Marin, together with Citigroup lawyer Sergio Spinelli will testify regarding an agreement to sell the bank’s stake in Brasil Telecom Participacoes to a group of Brazilian pension funds.

Stora Enso, the world’s largest paper and paper products manufacturer has started to buy around 100,000 hectares of land for planting in Brazil and Uruguay. Starting next year, the company will plant pine and eucalyptus trees to provide pulp for regional paper production. Stora Enso is planning investment of around $100 million.

The world’s largest aluminum producer, Alcoa of the US, has approved investments in Brazil totaling $1.6 billions saying this will result in increased sales abroad of $400 million and to the domestic market of $200 million. The amount invested will go towards expanding its aluminum production at the Alumar refinery in the state of Maranhao, developing a bauxite mine in Juruti in the state of Pará and modernizing an aluminum plant in Minas Gerais.

Following the success last week of its first ever local-currency bond issue to the international markets, Brazil has said it may consider launching another. The sovereign offered $1.5 billion of 10-year debt on 19 September to yield 12.75%. This compares with a yield of 15.5% on domestic local-currency debt maturing in 2012. The government has said that the launch of real-denominated bonds in the international market is part of a broader strategy to make the domestic market more accessible to foreign investors.

France’s electricity producer Electricité de France (EDF) is looking at its options regarding the future of its Brazilian company Light, the main distributor of electricity in Rio de Janeiro. One option is the sale of its entire 95% stake in the company. The company says it has appointed Goldman Sachs to assess the future of Light and the options open to EDF.

Brazil’s President, Luiz Inacio Lula da Silva has vetoed part of the 2006 budget guidelines law that Congress passed in August to try and increase the government’s spending flexibility next year. Some of the 23 budget elements vetoed by the president include the pay rise to be awarded to civil servants above the rate of inflation. Congress can override the president’s veto with a two-thirds’ majority and must vote on the law before year-end.

Brazil recorded a current account surplus in August of $822 million, below the expected level of $1 billion and a drop from the record high of $2.59 billion in July. The current account surplus for the 12 months to August was $12.5 billion, or 1.78% of GDP, a drop from $13.4 billion as at end July. FDI was also down in August, reaching $1.1 billion, versus $2.0 billion last month. This takes FDI for the first eight months of 2005 to $11.5 billion.

Brazilian mining company MPX has said it will sell its 11.8% stake in Canadian nickel-producer Canico Resouce Corp. following news that CVRD has made an offer to buy the company for close to $700 million. Canico manages a nickel project in the north of Brazil. MPX bought its stake 14 months ago for $60 million buts says it has no further role to play in the company.