Brazil Affordable Housing Articles

Brazil's Real Rises to Eight-Year High on Bets Inflows to Gain
February 21, 2008
By Adriana Brasileiro
Bloomberg.com

Brazil's real rose to the highest in more than eight years as demand for commodities and local stocks and bonds fuels purchases of the currency.
``Commodity prices are hitting records across the board, so flows will stay very strong,'' said Aristides Jannini, who oversees the equivalent of $397 million as director of asset management in Sao Paulo at WestLB Asset Management do Brasil […]
The real has increased 21 percent against the dollar in the past 12 months, making it the best performer among the 16 most- active currencies.

Soaring commodity prices have lured investors to Brazil's stock exchange, where the two most traded companies are exporters of iron ore and oil, Jannini said […]
The Bovespa index of most-traded shares on the Sao Paulo stock exchange rose 44 percent in 2007, for a fifth straight year of gains […] International reserves, including cash and other financial assets, rose to a record $171.6 billion in January.
Business as usual in Brazilian credit markets

February 12 2008
By Jonathan Wheatley in São Paulo
The Financial Times Limited
Brazil’s credit markets are shrugging off the effects of the US subprime mortgage debacle and maintaining business largely as usual – another sign say analysts of emerging markets “decoupling” from developed ones.
“Very little has changed in Brazil’s as a result of the crisis,” says Antonio Quintella, head of Credit Suisse’s Brazilian operation in São Paulo. “Of course conditions are somewhat more difficult, spreads are up and the pace of business is slower but, overall, credit markets are calm.” […]

Bank lending is the biggest, and the most visible example is Vale, the Brazilian mining giant, which has reportedly had little difficulty raising a loan of $50bn for itsbid for Xstrata, its Anglo-Swiss rival. It is understood that JPMorgan offered Vale $10bn that it did not need.
In Brazil, companies have benefited from a steady expansion of available credit. Brazil’s total stock of credit, at about 35 per cent of gross domestic product, is still much smaller than in many other markets. Brazilian companies have much less debt than many foreign competitors so their situation, says Mr Quintella, “is still relatively comfortable”.

Some analysts have warned that, because Brazilian banks raise some of their capital overseas, the credit that has driven recent growth on Brazil’s domestic market is bound to dry up. But Mr Quintella disputes this, pointing out that the steady advance in savings in Brazil has been driven by investments in fixed income instruments that are, in effect, closed to foreigners by taxation. “Our sources of credit are essentially domestic,” he says […]

Brazil shrugs off subprime concerns as equities rise
September 24 2007
By Jonathan Wheatley in São Paulo
Financial Times

Brazilian asset prices are poised to break new records this week as investors shrug off the US subprime mortgage crisis that briefly sent prices tumbling from previous highs in July. “The feeling on world markets is that things are calmer, interest rates are coming down, and while things are good, the markets that still have a built-in premium are the emerging markets,” said a São Paulo broker.

Brazil: Bank's Lending and Profit Rise

January 29, 2008
By BLOOMBERG NEWS

Banco Bradesco, the Brazilian bank, reported a 29 percent increase in fourth-quarter net income on higher lending and one-time gains. Net income climbed to 2.19 billion reais ($1.23 billion) from 1.7 billion reais a year earlier, Bradesco said. Recurring profit, similar to profit from continuing operations, advanced 14 percent to 1.85 billion reais from a year ago, it said. Bank lending in Brazil has increased every month since February 2004 as interest rates fell to record lows and employment rose.

The total loan portfolio, including receivables from credit cards, grew 39 percent to 161.4 billion reais, from 116.2 billion in December 2006. Net income was helped by a one-time 227-million-reais gain from the sale of a stake in Bolsa de Mercadorias & Futuros, Latin America's largest derivatives market, and 178 million reais of profit from the sale of shares in Bovespa Holding, owner of São Paulo's stock exchange.

Brazil’s Bovespa Rises on Real Estate Outlook; Bolsa Advances
February 13, 2008
By Fabio Alves and William Freebair
Bloomberg.com
[…]``Economic growth in Brazil this year won't be affected so much, despite the credit crisis and slump in global financial markets, thus Brazilian companies will still enjoy robust earnings growth,'' said Regis Abreu, who helps manage about 2 billion reais in assets at Mercatto Gestao de Recursos in Rio de Janeiro. He forecasts earnings of companies that comprise the Bovespa index will grow 15 percent to 20 percent in 2008 […].

The Brazilian economy will slow moderately this year as the country is in a better position than in the past to weather a dip in U.S. economic growth, Brazil's central bank president Henrique Meirelles told investors at a conference yesterday in New York. He expects Brazil's economy to expand 4.5 percent this year, after growing 5.2 percent in 2007 […]

Brazilian Debt Raised to Investment Grade by S
By Fabio Alves and Carlos Caminada
April 30, 2008
Bloomberg.com
Brazil received an investment grade credit rating for the first time from Standard & Poor's, sending the benchmark stock market index to a record and yields on dollar bonds to an all-time low.
Brazil, whose economy grew last year at the fastest pace since 2004, should be able to maintain annual growth of as much as 4.5 percent […]

Brazilian exports have tripled since President Luiz Inacio Lula da Silva took office in January 2003 on rising world demand for soybeans, iron-ore, beef and cars. Brazil, […] became a net foreign creditor for the first time in January as international reserves swelled to a record $171.6 billion from $37.6 billion at the start of Lula's first term.
[…]``This is tremendous news for Brazil,'' said Howard Appleby, principal for Boston-based Northern Cross LLC, who supports Harbor International Fund manager Hakan Castegren. Harbor holds $3.5 billion of stocks in Brazilian companies. ``It lowers the funding costs and the risk premium and makes Brazil a more attractive place to invest.''

Brazil Housing Market Gains Strength As Local Credit Grows
September, 2007
By Rogerio Jelmayer
From Dow Jones Newswires
Brazilian real estate developers are still betting on a local housing boom, despite the worldwide credit crunch that originated in the U.S. subprime mortgage market […]
According to Robusti, total outstanding mortgage loans in Brazil are equal to only 2% of gross domestic product. By comparison, in the U.S the ratio is 69% of GDP and in Mexico 11%. Developers, consequently, are still bullish, given the scope for growth in the country's domestic mortgage market. A year-and-a-half after its debut on the Brazilian Stock Exchange, developer Gafisa SA (GFA) is ready for a new raft of projects, according to Gafisa President Wilson Amaral […]

"It is reasonable to expect growth in mortgage activity by the banks," said Alex Agostini, a banking analyst at the Austin Ratings consulting group in Sao Paulo. "In the medium term, I expect banks to form partnerships with local real estate companies and possibly even acquire some of the realtors' own credit portfolios."
On Wednesday, Brazil's state-run Caixa Economica Federal savings bank announced a new credit line, expanding the maturity of its mortgage loans to 30 years from 20 years.

"The Caixa Economica decision was unprecedented and highly positive for the real estate industry," said Amaral. "This will tend to increase sales, and make housing more affordable for a broader segment of the population."
Nor is the Brazilian real estate industry off the radar for foreign investors.
Starting in mid-2005, more that 25 real estate companies have debuted on the Brazilian Stock Market, raising more than BRL17 billion. According to the Sao Paulo Stock Exchange, foreign investors bought nearly three quarters of the shares on offer.