Category: Brazil

Brazil’s economy is set to grow 3.26% in 2005, according to a central bank survey of analysts. Real income growth combined with falling inflation have prompted economists to improve their earlier forecasts. Second quarter growth of 3.9% was recorded, stronger than expected.

Brazil began to sell its first issue of real-denominated bonds in the international market yesterday. The bonds mature in 2016. The sale is being managed by Goldman Sachs, JP Morgan Chase & Co and Banco Itau. The government is using the issue to attract more foreign investors into its domestic markets.

Cafeteros de Colombia is negotiating the sale of its 25% stake in local airline Avianca to mayor shareholder Brazilian company Sinergy. The deal is said to be worth $23 million. Industrialist Germán Evromovich, who owns Sinergy, also has controlling stakes in Ocean Air de Brasil, Vispa in Ecuador and a 49% stake in Wayra Perú.

Brazil’s Gerdau, Latin America’s largest steel producer, is planning to up its stake in Argentinian steel entity Sipar from 43% to 84% for $40.5 million, payable over the next three years. Shares of Gerdau have risen 15% in the last two weeks on forecasts that it will supply most of the steel to repair the damage wrought by Hurricane Katrina in the US. Gerdau is the largest supplier of rolled steel in the western hemisphere.

Brazil’s richest province, São Paulo, has set a date of February next year to privatize power transmission company Companhia de Transmissão de Energia Eletrica Paulista SA (Cteep), in which it has a 36% controlling stake. The province expects the sale to raise around $435 million and plans to use the money to capitalize the state’s indebted generation company Companhia Energetica de São Paulo (Cesp). Meanwhile, Brazil’s federal government has said it is preparing to tender 32 new power generation projects over the next two years. The projects have a combined investment of $20.5 billion.

Brazil hired Goldman Sachs and JP Morgan to lead its first local-currency bonds in the international markets. This follows the peso-denominated bond issued at the end of last year by Colombia as well as several Brazilian banks and companies. The government wants to attract more foreign investors into its domestic markets by cutting bureaucracy and offering them more attractive securities.

Brazil’s Companhia Vale do Rio Doce (CVRD), the world’s largest iron ore exporter, has made an unsolicited bid for Canadian nickel producer Canico Resource Corp for C$17.50 in cash per common share. The deal would be worth C$725 million ($609 million). Canico shares soared by one-third after the offer, a 29% premium on Canico’s stock price for the past 30 days. CVRD says the deal is part of its strategy to become a global player in the non-ferrous metals industry. Canico says it is not looking for a buyer.

Roberto Jefferson, the politician stripped of his seat in the Chamber of Deputies Wednesday night, has attacked President Luiz Inácio Lula da Silva and his government. Jefferson, former Brazilian Labor Party leader, reversed his earlier support of Lula and accused him of inaction. Jefferson kicked off the scandal that has engulfed Lula’s government since June by revealing the government was buying votes in Congress.

Brazil’s central bank cut its benchmark lending rate a quarter-percentage point to 19.5% from a two-year high as inflation slows. The semi-independent bank began raising interest rates 17 months ago, slowing growth to a forecast 3.4% this year from 4.9% in 2004. The currency gained 25% in the past 12 months and inflation has fallen to 6%. The central bank’s inflation target is 5.1% this year and 4.5% in 2006.

Canada’s natural gas producer EnCana Corp. and US partner Kerr-McGee Corp. have announced a sizeable oil discovery off the coast of Brazil in the Campos Basin. Meanwhile, the company has sold all its oil operations in Ecuador to Chinese group Andes Petroleum Company for $420 million