Brazilians hit London town

February 10, 2012

Several Brazilian officials turned up bright and early at Thomson Reuters’ offices in London this morning, despite the snow and tricky local infrastructure (malfunctioning Tube trains), for an investment roundtable. (Here’ the  Reuters Insider broadcast of the event)

The officials, including undersecretary for public debt Paulo Valle, have been in London all week talking to bankers and investors. Some of the issues raised today included the continued imposition of the IOF tax on foreign purchases of domestic bonds, corporate governance and debt levels.

Valle told Reuters that Brazil could issue a $1.0-1.5 billion 10-year global bond denominated in reais this year, and he has been talking to bankers about it this week (here’s the Spanish version)

Inflation is also an issue, even though it fell today to its lowest in 11 months, while foreign demand is in danger of lighting too much of a fire under the real currency, which rose 8 percent against the dollar last month.

Paulo Oliveira, ceo of BRAIN (Brazil Investments and Business) told investors that too much money at once can cause problems:

Brazil needs an enormous amount of money for infrastructure, but in the short term it affects rates.  We need the capacity to swallow.

Meanwhile, initial public offerings on Brazil’s BM&FBovespa exchange have hit a drought, with a shortage of deals last year and Brazil Travel Turismo withdrawing its IPO plan this week.

But Lucy Pamboukdjian, international business officer of BM&FBovespa, told us foreign investment from Europe was hitting 40 percent of total international volume on the exchange, more than ever before.

With a depressed growth and market outlook in Europe, it’s probably not surprising investors are looking to economies that are suffering less pain. Brazil has had its own debt woes in the past and has lived to tell the tale.

As Oliveira said

We are not smarter than Europe — but we passed through this crisis before.







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