Brazil’s Key Interest Rate Expected to Rise

Brazilian equities rose, Thursday, alongside various favorable corporate news items. Despite initial profit taking, Brazil’s market benefited from the country’s solid economic fundamentals. Brazil’s benchmark Bovespa Index firmed 66.15 points, or 0.28%.

Brazilian stocks firmed, after battling back from early profit taking. The benchmark IPCA inflation index increased 0.44% in October, versus 0.33% in September.


The IPCA index is used by Brazil’s central bank as a guide when determining monetary policy. The bank is widely expected to hike its key Selic interest rate by at least a quarter of a percentage point at the close of its monthly two-day monetary policy meeting, which concludes next Wednesday. The Selic rate currently stands at 16.75%.


Turning to corporate items, CVRD displayed its second consecutive record quarterly net profit late Wednesday, as net earnings climbed to 2.30 billion reais in the third quarter from 1.28 billion reais a year before.


The world’s leading iron ore miner cited higher prices and sales, in addition to the divestment of a stake in a local steel company, for the result.


Separately, CVRD ramped up third-quarter copper production at its new Sossego mine by 9.2% to 21,835 tons from the prior quarter when the mine came into operation.


The company also said it set records for iron ore, manganese and bauxite production in the period. Nevertheless, the stock fell.


Additionally, No. 3 Brazilian private bank Unibanco announced that its third-quarter net profit reached 327 million reais, up from 270 million reais one year prior, aided by greater lending as the country’s economy strengthened.


The firm’s earnings were basically in line with analyst forecasts of 324 million reais, on average, as provided by Thomson Financial Brasil.


In deal news, Brazilian paper and pulp companies Suzano and VCP said Wednesday evening that they agreed to purchase Ripasa Celulose e Papel for a total of US$720 million in Brazilian currency and would share its control equally.


However, the market deemed their acquisition of Brazil’s No. 7 wood pulp producer to be expensive, pressuring shares of VCP.


Thomson Financial Corporate Group
www.thomsonfinancial.com/
PRNewswire

Tags:

You May Also Like

Telephone Manners in Brazil

When calling an executive in Brazil you will be asked, "Who wishes to speak," ...

Brazil and Neighbors Warned by US to Think Twice Before Embracing Ahmadinejad

Hillary Clinton, the US Secretary of State, urged Latin American countries on Friday to ...

Brazil Industry Blames Economic Downturn on High Interests

Employment in the São Paulo industrial sector rose only 0.38% in May, after rising ...

Brazil’s Ethanol Storage Complex Can Manage 15 Ships a Month

The city of Paranaguá in the southeastern Brazilian state of Paraná has just inaugurated ...

Brazil’s State Bank Goes to Argentina Shopping for a Bank to Buy

Brazil's state-owned Banco do Brasil (BB), Latin America's largest government-managed bank, is in talks ...

Brazilian Policemen Try to Invade Congress to Get Better Salaries

In Brazil, about 100 members of the Civil and Military Police from various states ...

Half of Brazilians Are Now Middle Class, But 40% Are Still Very Poor

The middle class in Brazil has grown since 2003 when Brazilian President Luiz Inácio ...

Navistar Buys Brazil’s MWM

Navistar International Corporation announced today that its South American engine subsidiary, International Engines South ...

Brazil Closer to Legalizing Abortion Up to 22nd Week of Pregnancy

A commission created in April to debate changes in the country’s abortion legislation decided ...

Old Age and Pension in Brazil and Other Countries

Anne O. Krueger, First Deputy Managing Director of the International Monetary Fund speaks at ...