• Categories
  • Archives

2011 Not a Good Year for Brazil’s Stocks: 18% Down

Bovespa, Brazil's stock market In spite of a slight gain in the last trading day of 2011 the Brazilian stocks benchmark index, the Ibovespa, experienced an 18.1% decline in the twelve months of last year on concerns that Europe’s debt troubles could lead to another global recession. 

The benchmark Ibovespa stock index closed on Thursday 30 December at 56,754 points, a 0.39% gain from the day before Wednesday’s close of 56,534 points. The index had ended 2010 at 69,305 points.

In Brazil, a price index showed a slowdown in inflation, giving policy makers room to continue cutting rates and reducing taxes to stimulate growth. But despite a drop in the IGP-M price index in December, the reading for the year stood at 5.1%.

“Throughout the year we were rudderless, as money managers, economists and the government were not really able to determine what the outlook would be” said Reinaldo Zakalski, director of BI Asset Management in Sao Paulo, adding that the uncertainty made investors reluctant to buy stocks.

“Add to that the weakness of the US economy, overseas investors fleeing, European bank problems and you have the strong retraction in stocks that we saw. Next year I see much of the same until we have more clarity about Europe.”

The tone of caution for investors in Brazil was mirrored in this year’s good performance by more defensive industries, such as phone companies and utilities, as well as makers of reliable consumer items, such as cigarettes and alcoholic beverages, compared with a decline in more capital-intensive industries that rely on robust growth, such as home builders and airlines.

Telephone company Tim Participações (TIMP3.BR) jumped close to 40% this year, while utility Cia Energética de Minas Gerais (CMIG4.BR) added more than a quarter, placing them among the 10 most profitable stock investments in Latin America this year, according to the Economatica consulting firm.

Tobacco company Souza Cruz (CRUZ3.BR) and Cia de Bebidas das Americas (AMBV4.BR), or AmBev, as the region’s biggest brewer is known, both jumped close to 30%.

While consumer growth was a concern for many overseas economies, the relative strength of Brazil’s domestic demand, as its middle class grows, helped lift credit- and debit-card processors Cielo (CIEL3.BR) and Redecard (RDCD3.BR).

Real estate developer Gafisa SA (GFSA3.BR) was among the biggest decliners on the Sao Paulo exchange this year, losing close to two-thirds of its value.

Other big decliners were low-cost airline Gol Linhas Aéreas Inteligentes (GOLL4.BR) and steelmakers Usinas Siderúrgicas de Minas Gerais (USIM5.BR) and Cia Siderúrgica Nacional (CSNA3.BR), which fell more than 40% each.

Mercopress

Tags:

  • Show Comments (0)

Your email address will not be published. Required fields are marked *

comment *

  • name *

  • email *

  • website *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Ads

You May Also Like

Brazilian Boeing 737 that crashed in the Amazon jungle

How Brazil With Media Help Kept the Lies Alive After Boeing’s Tragedy

With each passing day, new evidence: the government, through the Defense minister, deceived the ...

Brazilian Newspaper Sues US Government Over “Return to Sender” Home Raids

New Jersey-based Brazilian newspaper Brazilian Voice and the Seton Hall Law School's Center for ...

Brazilian Executive Jet Phenom 100 Passes FAA Test in Texas

Brazilian Embraer's first Phenom 100 customers have successfully passed the practical test with the ...

Brazil Lends Helicopter to Rescue FARC’s Colombian Hostages

With the help of Brazil a Colombian soldier and three police officers were released ...

Brazil Needs Reforms, Says Country’s Industry Leader

The industrial sector, composed of three groups – manufacturing, construction, and mining -, which ...

Brazil Wants Rules Changed by IMF and Co.

Brazil’s Minister of Cities, OlÀ­vio Dutra, wants Brazil to revise its relationship with international ...

US and UK Main Beneficiaries of Brazil’s US$ 152 Billion Foreign Investment

The transfer of money from Brazil abroad, turned to financial investment both by natural ...

Brazilian Amazon’s Worst Drought in 40 Years Brings Rainforest to Brink of No-Return

The devastating drought currently affecting the Amazon rainforest is part of a vicious cycle ...

One Third of Brazil’s Indians Live in Favelas

Buredupo’O (thank you), Celso Pitta” phrase in Pankararu, written on a banner hanging on ...