• Categories
  • Archives

Foreigners Cash Out US$ 1.8 Bi, But Brazil Bets They’ll Buy US$ 26 Bi in Stocks

Brazilian stock exchange Bovespa Brazil reached last year a record US$ 34.6 billion (almost double the US$ 18.7 billion of 2006) in Foreign Direct Investment (FDI), reported the Brazilian Central Bank. FDI this year is expected to topple US$ 28 billion with an estimated record 4.5 billion in January.

Another area which in 2007 attracted record foreign capital was fixed rate bonds and the stock exchange, totaling US$ 39.7 billion compared to US$ 14.68 billion in 2006, with an all time record of US$ 8.7 billion last December, said Altamir Lopes, head of the Economics Department of the Central Bank.

However Lopes admitted that world financial turbulence has resulted in a net loss of US$ 1.8 billion in the local shares and bonds markets during January.

"Global financial and credit market turmoil has prompted investors to cash out of short-term investments that aren't directly related to the economy's future prospects, leading to an outflow of US$ 1.8 billion from Brazilian stocks and fixed-rate bonds so far this month," said Lopes.

For this year the Central Bank estimates an inflow of US$ 26 billion into the shares and bonds.

"In spite of the current volatility we observe a continued inflow of funds that hinge on confidence, economic fundamentals and the prospects of the Brazilian economy are going well. The outflow is a pattern common to all stock exchanges round the world."

Brazil ended 2007 with a positive current account of US$ 3.6 billion (0.27% of GDP, below the US$ 13.6 billion of 2006) given a significant reduction in the country's trade surplus and an increase in profits sent overseas.

Foreign investment has accelerated in Brazil as the central bank has built up credibility by beating its inflation target for two straight years at the same time that Latin America's biggest economy is expanding at the fastest pace since 2004.

The central bank's inflation target was first adopted in 1999. The bank now targets inflation of 4.5%, plus or minus 2 percentage points to account for unexpected price shocks.

Mercopress

Tags:

  • Show Comments (1)

  • michael

    The fall of FDI
    “FDI this year is expected to topple US$ 28 billion with an estimated record 4.5 billion in January.”

    That means there are expectations that FD! will make US $28 billion FALL OFF! Let’ check the meaning of the word “topple”.

Your email address will not be published.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

Brazil Expecting a 2005 Record Surplus of Over US$ 42 Billion

Brazil exported US$ 2.221 billion last week, 15.06% less than in the previous week, ...

Globalization Is Opening Doors for Brazilian Fashion in the Middle East

The Brazilian fashion industry has great potential to elevate its participation in the market ...

Brazil Lowers GDP Expectations from 4% to 3.12%

Brazil’s Gross Domestic Product (GDP), which represents the sum of wealth produced in the country, ...

Brazil Tiles and Stones Find Place in the World

The 3rd Revestir, International Tiles and Stones Trade Fair, will gather 130 companies and ...

Scotland Yard Settles with Family of Brazilian Mistaken for Terrorist and Killed

Jean Charles de Menezes's family has agreed on a compensation deal with the London ...

Brazil’s Petrobras Workers Threaten August Nationwide Strike

Offshore oil workers from Brazil's oil multinational Petrobras have ended a five-day walkout but ...

After Saying that Freud Explains Lula Now Wants Inquiry on Brazil’s Blackout

A consummate politician, Brazilian president Luiz Inácio Lula da Silva, contradicting two of his ...

Beauty and the Beat

Bahia has a new muse. Banda Eva sells one million CDs and projects Ivete ...

Celso Furtado: He Thought of Brazil as Brazilian

At a recent meeting in Alexandria, an Egyptian professor asked a question:  In the ...

Brazil Has World’s Largest Public Tranplant System

In the last two years, Brazil presented record growth in the number of organ ...