Brazilian Booming Stock Market Gives 15% Return in January

For the second day in a row, Brazilian stocks closed this Tuesday, January 31, at a record high. Foreign investors in search of better returns than those offered by the United States and the European Union have been flocking to Brazilian shores.

Brazil’s most important stock exchange, the Bovespa (Bolsa de Valores do Estado de São Paulo) ended up 0.37% higher at 38,382.

Despite the intervention of the Brazilian Central Bank to weaken Brazil’s currency, by buying dollars, the real kept going up, closing at 2.215 to the dollar. Just in January the real has gained more than 4% in value.

The good performance of the Bovespa, which saw four record highs in a little more than a week, meant a 15% gain in this first month of 2006. Things haven’t been that good since February 2004.

Bonds

Brazil’s National Treasury sold 300 million euros (US$ 360 million) in Republican bonds on the international market. The bonds are due in 2015.

The proceeds will be incorporated into Brazil’s international reserves on Friday, February 3. With this new issue, the total amount of outstanding Republican bonds rose to 800 million euros.

In January, 2005, the government issued 500 million euros worth of these bonds.

In Monday’s (January 30) operation, the annual interest rate investors will receive is 5.448%. The issue was underwritten by the Dresdener Bank AG London Branch and Barclay Capital Inc.

ABr

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