Brazil Affordable Housing Articles

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Hines, Calpers May Create $800 Million Brazil Fund by August

February 12, 2008,
By Carla Simoes and Guillermo Parra-Bernal
Bloomberg.com

Hines, a U.S. real estate developer, and the California Public Employees' Retirement System may create an $800 million fund to buy properties in Brazil as demand for commercial space surges in Latin America's largest economy.
[…] Some proceeds from the fund may be invested in low-income housing, Douglas Munro, chief executive of Hines do Brasil Empreendimentos, said in an interview yesterday. The fund may be ready by August, Munro said.
Hines is investing outside the U.S. to make up for a decline in the value of properties in the country, where the housing industry is in recession for the first time in 16 years and the dollar is losing ground against most major currencies. Hines may also invest in Angola and India, Munro said.

``So far, the performance of these Brazilian funds has been fabulous. We have obtained an excellent rate of return for our investors,'' Munro told Bloomberg Television in Sao Paulo. ``The drop in the dollar and a need to diversify portfolios has led our clients to look for new places'' like Brazil.
Foreign investment in new construction and real estate projects in Brazil jumped 35 percent to $2 billion last year, as the fastest expansion in three years […] Record low interest rates and rising wages stoked record mortgage borrowing, and government guarantees for low-income homebuyers are making low cost homes attractive, Munro said.

Brazilian banks are twice as profitable than U.S banks

Agencia Brazil, 15th August 2007
(Electronically translated from Portugese)

Itaú, Bradesco, Unibanco and Banco do Brasil are more profitable than the largest banks in the United States. In a calculation done by the consulting Economática, these four banks occupy the first places in a ranking of profitability that compares banks of the USA and Brazil.

The calculation, done by economist Einar Rivero, shows that the profitability of these four Brazilian banks in the first half of 2007 is almost double the North Americans in the same period. While the Brazilians had, between January and June, a median return of 14.55%, Americans have been with 7.36%.

"The ranking shows where these Brazilian banks would be if they were in the American market," said Rivero. "We compared banks of the same size. Smaller Banks have, sometimes, bigger profitability, but they cannot be compared to the profitability of the big banks. Einar Rivero warns that one can not confuse profitability with profit. To calculate the profit, would need to know what the total cost of each bank, which was not done.

Rhythm the world listens to
14.03.08
From Guardian Newspaper special report; Inside Brazil – A New Future
In just the last year, Brazil's economic indicators have been glowing - 5.2% growth, inflation below 5%, low interest rates and an investment-grade rating round the corner […]

From the boom-bust days of triple-digit hyperinflation in the late 1980s and early 1990s, Latin America's biggest economy is enjoying a new period of stability and growth […] in 2007 its [Brazil’s] stock market was among the best-performing in the world and the country climbed rapidly up the global league table for foreign direct investment, attracting $34.6bn - almost double its 2006 total.
Growth, which had averaged just 2.5% a year over the two decades before Lula swept to power in 2003, reached 5.2% last year. Inflation has been kept under control and within government targets of 4.5% and interest rates have been falling steadily.
The country remains on track to gain an investment-grade credit rating later this year, despite jitters from the global financial crisis. This would allow the government to borrow at lower rates and would also widen the country's appeal to overseas investors.

[…] The government appears confident the economy is in good shape to withstand the worst of a world slowdown.
[…] Growth in its exports to China, up from 2% two years ago to 10% now, will help cushion Brazil should America move into recession but it is domestic demand that remains buoyant.
The spending has been fuelled by a slashing of interest rates from the 45% peak they reached in 1999 to 11.25%. Credit, a new concept to most Brazilians, is becoming more widely available and the pent-up demand for consumer goods is kicking in.

Open for business
14.03.08
From Guardian Newspaper special report; Inside Brazil – A New Future

Despite a flabby public sector, Brazil's markets are booming. All the indicators are right: robust retail sales, strong industrial production, lower interest rates and strong credit growth. Investment-grade rating is round the corner
Confidence has been fuelled by a period of economic stability, the commodities boom, a growing domestic middle class, the opening up of the debt markets and a booming stock market - the Bovespa, which has been delivering some of the best returns of any market worldwide over the past few years. Since 2002, the Bovespa has risen by 1,250 percentage points.Until recently Brazil was seen as the laggard of the emerging Bric (Brazil, Russia, India and China) economies, but as economic and political conditions have improved, investment has been pouring in. Growth, while not matching China's, is expected to have been 5% last year.

[…]Brazil was the world's fifth biggest market for initial public offerings last year, and accounted for some 85% of equity being issued in Latin America. […] "The Brazilian market has outperformed the US stock market in the year to date," says Katy Dobson, Latin America fund manager at the asset management firm Threadneedle. Brazil is booming." […] Much of the investment is coming from outside Brazil. During 2007, there was a net inflow of foreign investment on the exchange of $23.5bn. The value of daily trades on the exchange more than doubled, from an average of $1.2bn in 2006 to an average of $2.6bn in 2007. The total market capitalisation of the companies on the exchange rose from $723bn at the end of 2006 to $1.4 trillion at the end of 2007. The market rose around 75% during the year.