Jpmorgan Brazil Investment Share Discussion Threads

[loganair] 20/12/2016 16:33

hazl - The ultra rich know, see it coming as it seems to me they are the ones who cause the bear markets in the first place, often selling out a few months before the market turns and saying what good investors they are.

All I will say is in my opinion when it comes I am expecting a collapse of at least 50% or more from what ever the high is as the Central Banks have very little ammunition to fight it with this time round.

[hazl] 20/12/2016 16:14

I think the next bear market could start as early as March 2017.

But who knows?

[loganair] 20/12/2016 16:09

Brazil’s Finance Minister, Henrique Meirelles, said on Monday that the government expects Brazil will register some growth already in the first quarter of next year.

“Our expectation is that Brazil is already working with growth in the first quarter of 2017,” said Minister Meirelles during a conference in Rio de Janeiro. According to Meirelles the government is forecasting a two percent GDP growth in the comparison of the last quarter of 2017 with the last quarter of 2016.

Financial institutions surveyed by Brazil’s Central Bank, however, are not that optimistic. The entities forecast of the GDP for 2017 of 0.58 percent.

The finance minister noted, however, that GDP forecasts are an average of 2017 compared to an average of 2016 and since in 2016 the GDP fell a lot, the 2017 ‘growth trend’ will start from a very low base.


Personally I think that Brazil is around 9 months behind Russia in coming out of its recession and therefore, at this current time it seems to me Brazil (JPB) maybe a better investment than Russia (JRS). Saying this however, I will not be selling down any of my investment in JRS as I think that Russia still has a long way to go as a commodity play as well as an easing of sanctions and the continuing reform of the Russian economy.

[loganair] 19/12/2016 17:06

Brazil’s farm economy will rebound in 2017 with a record harvest pushing up grain exports and expanding the country’s livestock industry, according to analysts’ forecasts.

An estimated record grain harvest of 213.1 MMT would be 14% larger than last year, when crops were devastated by drought, according to Brazil government estimates. The harvest will start in January.

According to another Brazilian marketing firm, SAFRAS & Mercado, Brazilian soybean production in 2016/17 could increase by 9.2% to 106.085 million tons, according to news reports. That would be roughly 4 MMT higher than USDA’s estimates. While poultry production is expected to rise by 5%.

“Agribusiness points to a positive performance in 2017 because of the improved agriculture revenue. We have relatively stable prices ahead … and we have increased grain production," the managing partner of MacroSector, Rabo Silveira.

“Agribusiness has a very good scenario for a year in which the economy of the country will go sideways. It is not that agribusiness will be immune, but it has some rules of its own,” Silveira says.

[loganair] 19/12/2016 17:03

Economists on Monday maintained their outlook for Brazil's economic performance in 2016.

Brazil's gross domestic product is expected to shrink 3.48% this year, according to a weekly central bank survey of 100 economists. But in 2017, economists see the country's economy growing 0.58%, according to the survey.

The survey also found that the economists cut their inflation estimate for 2016 to 6.49%.

According to the central bank survey, economists maintained their outlook for the year-end Selic rate for 2017 in 10.50%. They also kept the forecast from the previous week that Brazil will post a $47 billion trade surplus this year.

[loganair] 19/12/2016 16:45

QP - I hope it´s OK if I ask you a personal question, your monika of Que Passa any Spanish connection?


I feel it is always good to read both Positive and Negative reports about any situation. As I mention on my JRS thread "This thread is to engender dialogue, discussion and involvement of other posters, posting information and points of view of both sides in an objective, informative and hopefully sometimes interesting manner so others can carefully explore, examine and interpret the value of the information while not necessarily intended to change other posters attitude towards investing in Russia or JRS."

Just for information I was posting the lastest reports I had read on what is happening in Macau and maybe I am behind the curve when it comes to knowing Macau personally as I was regularly there during 2007/2008 when sadly the authorities were taking down all the signs in Portugese and replacing with English.


We are now in the second longest running Bull market in history and by early 2018 will be the longest Bull market in history any thoughts about when the next Bear collapse will be?

[quepassa] 16/12/2016 18:57

Maybe we shouldn't talk about Macau because that's something I know quite a lot about.

You say casino shares are hit hard. This I would debate with you.

For example, if so how do you explain that Sands HK has risen near 100% in a year from HK$20 in Dec 2015 to $35 now and equally Wynn Macau has risen from HK$6 to HK$12 over the same time frame?

Also, visitor numbers have now stabilised and are on the uptick. The casino resorts are refocusing on family entertainment rather than a few high rollers. The new mega-resorts are pulling in the punters fast. The completion of the road-bridge is destined to change Macau beyond recognition as until now it could only be reached by ferry.

I am sorry but although I really do respect your views on Russia and Brazil, you are behind the curve on Macau.

Yes, on Cuba, no real way to invest direct there at the moment in securities or quoted instruments other than through some international hotel chains but Melia is very international with a diversified chain of hotels.

Best regards and have a nice week-end.

QP

[hazl] 16/12/2016 18:44

Yes logonair I have noticed before your excellent research and summation of what is happening in your areas of interest, leading to a successful backdrop for your choice of investments.

From the political point of view I maintain that the neo-liberal capitalism sweeping the globe is the cause of many of the problems internationally.
The deregulation particularly of the banks and the deliberate reduction of social programmes ,that are touched on in the article above, are the work of those who surely wish to demean and control ordinary citizens who are just trying to work hard and make ends meet in most cases.
'I don’t see how to get out of this, because I think both projects are failing. Of course, this project of trying to implement a pure neoliberal political economy is just for the benefit of the very rich so it saves, at least, the banks. That’s its main proposition, save the banks.' from Kimberley Brave above.

It has clearly been happening here,too and I have written quite a bit on the 'sha' thread recently about the same.
Implemented as long ago as Thatcher's era and continued by Blair,
I think many people lump the perceived problems here into an EU/ANTI EU rhetoric but I think it is more to do with this neo-liberal capitalism which rewards big companies,doesn't restrain monopolies and actively withdraws social care.

Your article above helps confirm for me how widespread this has become.
I think it's interesting they state that the democratic system wasn't working either beforehand but was it at all brought about by the debt being passed around like 'pass the parcel' perhaps? With currency wars and so on that each country participates in now,with of course the Western counties so far having the upper hand?
I found this article very interesting last weekend if anybody is interested.



IMO

[loganair] 16/12/2016 18:10

Mitchell Harris Long/short equity, momentum, deep value, special situations about Cuba:

The 54-year embargo between Cuba and the United States is hopefully coming to an end. This is a no-brainer and will open the door to a massive inflow of investment, tourism, property expansion, and natural resource development. All good things for a country only 90 miles from the tip of Florida, such easy access for American travelers looking for new places to vacation. Yes, there will be a healthy amount of criticism while we sit and wait for Congress to approve the "lift," but there is a place to invest your money now that could pay off handsomely once all the chips fall into place. This is not a quick hit or a three to six month trade; I recommend dollar cost averaging into these positions over a period of one year to maximize a conservative strategy. As I do some more research, other ideas may come across my desk, but let us stick to this one for now - Melia Hotels Intl SA, it currently operates roughly 25% of the hotels in Cuba.

The Cuban lodging market currently is dominated by small local operators and some European and Canadian chains, many of which often offer all-inclusive packages. Spain's Melia Hotels International SA and Canada's Sunwing Vacations are among the active players there. Some other chains have expressed interest in hotel development in Havana.

I just feel as relationships grow between the U.S. and Cuba, the aggressive business minds will create a stir and try to develop this country as fast as possible.

As we all know, nothing is easy, and it will take time to hurdle the political, monetary, labor, infrastructure issues. There are other industries that will benefit while Cuba is being rebuilt. A tremendous amount if investment is needed. Let's not forget the trillions of dollars U.S. companies currently have in offshore banks. How great would it be to invest some monies into Cuba at this early stage once an agreement can be reached. Over time, I think it is inevitable that Cuba will become an island oasis to be enjoyed by millions of people in the coming years.

[quepassa] 16/12/2016 17:41

Well, a couple of things to note about Macau. Two mega resorts ( Sands and Wynn) have opened just this year in Cotai. And a road bridge between HK and Macau is due for completion in 2017. - Both are game-changers.

How would on invest in Cuba please?

QP

[loganair] 16/12/2016 16:17

QP - Yes I would invest in Cuba, especially now as it beginning to open up and after going to Macau many times, no I wouldn´t invest in Macau.

Macau is very small and now completely built on and has little space for new development, unlike Singapore which has reclaimed about a square mile from the sea, Macau is in less of a position to do so.

[quepassa] 15/12/2016 19:04

Very interesting posts , loganair. Thank you.

I think our timing on Brazil and Russia was similar and for similar reasons.

Fully concur with your sentiments and views.

Cuba - a fascinating idea - but how would you invest ?

Thank you for your response.

Another esoteric/specialist investment which I wanted was Macau where the economy was smashed after China clamped down on conspicuous spending a few years ago and visitors/gamblers to Macau plummeted. Macao is now picking up after several years in recession . I invest in Macau through Macau Property Opportunities Fund (MPO) which has performed well and which still looks very promising.

Not a frontier country but another Trust I recently encountered with a massive Discount to Nav of 30% is Canadian General Investment Trust (TSX: CGI and LSE: CGI ). I have mentioned them recently on the bulletin board for Scottish Mortgage Investment Trust LSE SMT.

Thank you for sharing your ideas and thoughts.

ALL IMO. DYOR.
QP

[loganair] 15/12/2016 17:23

A closer look at Brazil’s economy by Kimberley Browe:

The Brazilian economy isn’t looking great these days. The country is facing one of its most severe economic crises since the Great Depression, with unemployment at almost 12 per cent and inflation hovering around 8 per cent. The scene has caused a lot of anger, resentment and suffering across the country.

But Brazilians are about to get yet another shock, since the new President Michel Temer has chosen to respond to the country’s economic troubles with a series of neoliberal measures that include cutting funds to social programmes, healthcare and education – which many Brazilians have come to rely on.

Temer took office this summer after former President Dilma Rousseff was impeached for manipulating budget numbers. The move booted the left-wing Workers’ Party (PT) government from power for the first time in over 12 years. Temer then proceeded to load his cabinet with unelected officials and allies of his Brazilian Social Democratic Party government.

To unpack some of the implications of a floundering economy and new neoliberal policies, New Internationalist spoke with Brazilian political scientist Sergio Gregorio Baierle. Baierle previously worked with the Central Bank of Brazil and advocated for Participatory Budgeting with the NGO Cidade in Porto Alegre.

Brazil’s economy is in one of its worst recession its been in since the 1930s, while President Temer also announced last week that the economy isn’t expected to emerge from recession until the second half of next year – which is also later than expected. How is this actually unfolding in Brazil itself? How is it affecting people right now in the country?

The situation is awful – the situation for the poor but even for middle classes. It’s very difficult because the economy is not recovering.

For example, this year they [the government] have been able to produce some primary surplus for only two months of the year. They have not been able to achieve any primary surplus for the remaining months, so the debt with the banks is increasing, despite all this speech that there is a new hope for the economy and that many investors are trying to come to Brazil.

But what are investors actually doing? They are profiting off of the highest interest rate in the world. So, for example a debt in credit card costs you around 500 per cent a year. It’s unbelievable.

And for the government, of course, their interest rate is much less, although it’s still very high. They can make a lot of money. People with money, they actually don’t want to invest in anything because it’s much easier to make money just buying the debt bonds from the government. It’s much easier.

So, all the sectors are suffering. The industrial sector was already in a decline and continues to decrease, while the service sector was the last one to fall, but now is falling. And that means a lot of unemployment because this sector employs a lot of people. The traditional retail sector is also facing a severe crisis.

The only sectors that are surviving are the renters, for example the shopping centre owners. They live from the rent that people pay to put their stores there, so they can make some money. But even this group is suffering. They are suffering because, in some areas of the city, a lot of places are now vacant. This is just an example to show that the populations’ consumption too is decreasing.

I don’t see how to get out of this, because I think both projects are failing. Of course, this project of trying to implement a pure neoliberal political economyis just for the benefit of the very rich so it saves, at least, the banks. That’s its main proposition, save the banks.

But the other project that was using traditional Keynesian policies in order to push consumption and grow the economy was also not working. Dilma [former president Dilma Rousseff] tried to improve the economy through just investing government money in this process, decreasing taxes for industries or very low interest rate loans for some business sectors, and it didn’t work.

Brazil, of course, is now facing its most severe crisis in its history. But I think the problem is more complicated than that and it’s not restricted to Brazil: it’s not working in many places. Even in the United States, the gross domestic product’s rise was slow compared to other periods where they tried to recover from recessions. Now they recovered from the recession of 2008, but it was much harder than in the past.

Maybe we should consider crises not to be just crises in a linear time line: they are accumulating. So, I think we are in a process of arriving at a harsher crisis in the near future, internationally.

Do Temer’s neoliberal policies actually differ that much from what Rousseff was putting forth in the last couple of years? Because she was heavily criticized for her neoliberal policies too.

Yes, she was. Dilma received criticism from the right wing at the beginning of her term because of the policies she implemented in the first years. But in her last mandate she appointed a neoliberal minister to run the economy.

And some measures they [the Temer government] are implementing today, she tried to implement then, but was not able to get the majority to do that. The idea of reducing funding for health and education was already there, but what occurred was that now they really implemented that measure. Now they have accentuated these policies, and have the majority in congress, so they can pass what they want.

What are some of these specific policies that Temer has recently passed?

They passed one that freezes public expenditure on all levels of government for 20 years.

But the point is that they are also in a harsh crisis so they are investing almost nothing right now. So this policy implies that, regardless of how well the economy is doing, for the next two decades they will be investing next to nothing.. It’s not sustainable.

For now, they get political support for those regressive decisions and I don’t know how much time it will take for people to withdraw their approval. It depends how fast people realise they are not in a new economy that will build fast. No. They are in the beginning of a crisis that will get worse and worse and worse for the foreseeable future.

Right, this is the Proposed Constitutional Amendment (PEC) 241? This is one of the more controversial new measures. What will some of the more specific effects of this spending cap be? And how will it affect the legacy of social policies built by the Workers’ Party (PT)?

Now they [the Temer government] are reviewing all beneficiaries of all social policies, one by one. They are obliged to go through, for example, in the case of the family grant, Bolsa Familia, they are checking all the beneficiaries and they cut the beneficiaries that are making more than $100 per member of the family. So they are going into some details and attacking people individually, and making them feel guilty – and if they are making some more than the cap, even just a few cents more, they can no longer receive the family grant.

Some programmes they are cancelling altogether, and they are also preparing to increase the retirement age.

In terms of education, for example, they are proposing a change in the educational system, cuting some disciplines like history, sociology and philosophy at the high school level. They would just be an option, and not an integral part of the key curriculum.

Another proposal is for full time schools. In Brazil, we have a tradition of half time schools, with different morning and afternoon students. But many people in high school are also at the age that they need to work, so if they need to be at school full time during the day it will be very difficult. School will also become more expensive because students need to be there during the entire day. The government is also considering reducing the number of places in schools – because they will not be able to fit both morning and afternoon students at the same time.

How do you see the Brazilian public responding to these measures? Some areas of Brazil have very active social movements.

Yes, there is a strong response today. Public sector school workers are striking to protest the proposed changes in school policies.

But the problem in Brazil is that the media are strong and very controlling, and they have almost the same interests. Two or three groups control the mainstream media.

One of the reasons that they were in favor of Dilma’s impeachment was because they wanted more public funding for big media. And that was one of the first things the new government did, to put a lot of money in publicity in the big media, such as the Folha de Sao Paulo and Globo.

They are also offering them contracts. For example, the Globo was offered a contract for administrating museums, and they are also interested in the school books industry – they are going far beyond just being a newspaper. They are trying to be present in the daily life of the schools and communities.

Besides Michel Temer taking office recently, the Brazilian Social Democratic Party has made other gains in the country in the last few elections, including the municipal elections in October and in Sao Paulo a few weeks ago. They picked up a lot of seats that were once occupied by the PT. Some media organizations are interpreting this as an indication that voters, or citizens, are angry with the PT for leading them into a two-year recession. Do you agree with this?

It’s half true. Because what is really happening is that people have thrown their vote, most of the ballots are blank. Most of the people went there but they didn’t vote for any candidate. So, for example, in Puerto Alegre, the mayor was elected with only around one third of the vote. And most of the voters they voted for no-one.

People distrust the Workers’ Party for two reasons. One reason is what the media is saying about the Workers’ Party or whatever. But the other reason is that they don’t feel a strong difference between the Workers’ Party and the other parties. In the beginning people used to say the Workers’ Party was different, they were more ethical etc. But the middle class that traditionally showed more support for them now distrusts the party, although that doesn’t mean they are in favour of right-wing politics: they don’t see any other option that could follow.

Is there any truth to the media reports that it was predominantly the policies and actions of the PT that lead Brazil into this recession?

No. What lead to the recession was the end of the commodities boom. On the one hand, the end the commodities boom was linked to an internal problem where Brazil was not able to profit from the commodities boom. They were not able to recover industry or to establish a better relation with the financial sector in Brazil, because they had never really addressed that kind of dominance of the financial sector. And on the other hand, the crisis has an international context, because in my opinion the key point was the price of oil falling and hugely impacting the countries that were taking profit from the commodities boom, like Russia, Iran, and Venezuela. I think that the crisis in Venezuela would not be as big as it is today if the price of oil wasn’t as low as it became. Of course there are internal factors, but things don’t just happen by chance.

How will this affect the economic bloc between BRICS countries (Brazil, Russia, India, China and South Africa)?

The problem now is that Brazil is not part of the BRICS, Brazil is trying to get connected to the United States again. They think that the chance for Brazil to survive the crisis is to get a more friendly connection to the United States, increasing our exports there. I don’t think this will occur, especially with incoming US president, billionaire businessman, DonaldTrump. Why would they increase imports from Brazil if they can import for cheaper from other areas?

Over the past years, Latin American countries – particularly the traditionally left-wing countries, Brazil’s previsous PT government, Ecuador, the former Argentine government, and Bolivia – have been trying to create more regional union and trade amongst themselves, and to aid Latin American integration. How are Temer’s policies going to affect this Latin American unity?

Temer’s governmet is trying to break with this trend. Now the international relations sector in Brazil is very right wing. José Serra is the new minister for foreign affairs, and he is in favour of improving ties with Argentina, blocking Venezuela. And I think for Mercosur (Southern Common Market), for all the policies they have been trying to implement before, they will have a difficult time in the present.

Unless another change occurs in the near future… for Latin America I think we are going back to that traditional alternation between some liberation and some return to dependence on the United States policies for the area.

[loganair] 15/12/2016 16:56

Currently I invest via Morgan´s monthly investment plan and 2 1/2 years ago I said to myself once JRS reached 500p and JPB (JP Morgan Brazil) reached 70p I would look at another of JP Morgan´s Investment Trusts to invest in.

Here´s the thing, at the moment other then JPB I can see of no other JP Morgan trust to invest in while I still see tremendous value left in continuing to invest in JRS.

When it comes to investing in Russia and Brazil I was lucky to be in the right place at the right time Russia - the collapse in the price of oil and sanctions, Brazil - their worst recession for 100 years.

I have written to JP Morgan a few times asking them to look into a ´Frontiers´ Trust, for their Indian trust (JII)to include the whole of the Sub-continent, in the same away as the China trust includes Taiwan and Hong Kong, for their Asian trust (JAI) to be no more than 40% China, Taiwan and Hong kong, currently at around 60% and for this trust to include other Indian sub-continent countries and the ex-CIS states.

I like Kenya and Cuba, I think Myanmar may also do very well, then their is Vietnam which has promised so much over the past 10 years while sadly delivering very little.

[quepassa] 13/12/2016 16:18

Yes. Concur.

Which other EM's would you say are interesting to look at please, LoganAir, which in your opinion may be bottoming out?

Thanks

QP

[votiem] 13/12/2016 14:32

Hi Logan - a long time since I looked at these posts. Note your Russian and Brazilian investments have been paying off recently. Very well done, sir.

[loganair] 02/12/2016 10:19

Brazil's economy contracted 2.9 percent in the third quarter, compared to the same period in 2015, the Brazilian Institute of Geography and Statistics (IBGE) said Wednesday.

The latest drop in the gross domestic product (GDP) indicates that there is no end in sight to the severe recession in South America's largest economy, economists said.

The economy has contracted for 10 straight quarters, with GDP declining 4 percent in the first nine months of 2016, marking the worst performance in a January-September period since the current statistical methodology was introduced in 1996, the IBGE said.

The poor performance in the July-September period casts doubt on forecasts by the government and economists calling for the economy to start growing in the second half of 2016.

Brazil's economy contracted by 3.8 percent in 2015, marking the worst economic downturn in the past 25 years.

The South American country's GDP contracted 4.4 percent in the January-October period on a year-on-year basis, a performance that is worse than analysts' forecasts of a 3.4 percent decline for the entire year.

If the forecasts turn out to be accurate, Brazil's economy will contract for two years in a row for the first time since 1930.

Brazilian Finance Minister Henrique Meirelles said on Thursday that the economy could contract in the first quarter of 2017, admitting that a recovery from a two-year recession will take longer than expected.

[loganair] 26/10/2016 17:15

JP Morgan - Brighter skies for Brazil after economic storm.

The clouds are starting to lift over Brazil after an economic storm in 2015. But what factors should investors consider when turning their attentions to the South American giant?

Brazil’s economy suffered in 2015, with an economy which declined 3.8 per cent and political scandals which flooded the headlines. Unease continued into 2016 with the president’s suspension, the weakness of commodity prices and the slowdown in China cast a dark cloud over the nation’s economic prospects.

Prior to Rio de Janeiro’s successful hosting in August of the world’s greatest athletics competition; the skies above Brazil were starting to brighten. As we discuss further, for investors looking at the opportunities in the emerging market, the long-term view is one that may be needed.

Economic storms:

Following the twists and turns of Brazil’s economic and financial scene may not be recommended to those of a nervous disposition. Storms may brew up seemingly out of nowhere, only to blow themselves out equally quickly. It was only in May last year that Christine Lagarde, managing director of the International Monetary Fund (IMF), concluded a visit to the country by heaping praise on “the remarkable advances Brazil has made in addressing poverty and inequality”.

True, she said also that “preserving these social gains and ensuring strong and inclusive growth in the future hinges on strengthening macro-economic policies”. Supply-side bottlenecks needed to be addressed, said Ms Lagarde, and infrastructure improvements were needed, but she ended by praising Brazil “as one of our most dynamic member countries”.

By the end of the year, most of the IMF’s 188 other members concluded that if Brazil represented economic dynamism, they would prefer to stick with sloth. A deep recession caused by plunging demand for commodities such as iron ore, soya and oil was exacerbated by a huge financial scandal involving the state-owned oil company Petrobras.

Falling confidence:

Understandably, business and consumer confidence dropped sharply and by April this year the IMF, in its World Economic Outlook (WEO), was forecasting that 2016 would see the Gross Domestic Product (GDP) shrink by a further 3.8 per cent and that there would be zero growth next year.

Brazil, said the Fund, was “mired in deep [recession]” and faced “severe macro-economic conditions”.

Add in wider concerns about corruption and inequality and Latin America’s emerging giant was looking in poor shape.

But true to form, obituaries for the world’s seventh-largest economy would have been premature. Come July, and the IMF was having second thoughts. In its WEO update, it upgraded its forecast for Brazilian GDP by 0.5 percentage points for this year, giving a revised figure of minus 3.3 per cent.

At the subsequent press conference, IMF officials were queried about this, with one questioner asking: “How do you explain this newfound strength that you’re projecting?” Oya Celasun, of the IMF’s research department, replied: “So what we’ve observed in Brazil recently, since March, has been a turning around in confidence. We see that in indicators of consumer and business confidence. We definitely see it in financial markets. Exchange rate has strengthened quite significantly as well.” Investors should always keep in mind that movements in currency rates can adversely affect the return of your investment.

Negative effects were wearing off, she said, “and we do see evidence of the economy turning around”.

Her research department colleague Gian Maria Milesi-Ferretti added “the contraction is halting as the tide gradually turns”.

Meanwhile, shares have rallied this year, with prices surging from the low point seen in the late winter. Some firming of commodity prices has helped, as have inflows from foreign investors seeking better yields in a world of very low returns.

Underlying strengths:

What seems to be happening is that the underlying strengths of the economy are reasserting themselves. These include the use of past revenues from the country’s commodity wealth to grow other parts of the economy, whether aerospace manufacture or infrastructure investment.

For the investor, the real growth opportunities are likely to be found less in the huge energy and commodity companies that have long loomed large on Brazil’s financial scene and more in the smaller enterprises that are on the way up and offer the potential for rapid growth. However, investors should be reminded that securities of smaller companies may be more difficult to sell, more volatile and tend to carry greater financial risk than securities of larger companies.

These are likely to include businesses catering to the needs of Brazil’s burgeoning middle class, such as retailers and providers of consumer staples. When those firms are well managed with a firm grip on costs, the long-term growth prospects can be bright, regardless of economic and political squalls. But identifying such stocks in a vast and complex economy such as Brazil calls for deep knowledge and expertise. The JPMorgan Brazil Investment Trust is currently the only closed-ended fund offering “pure” exposure to the Brazilian market. Its methodical approach to stock selection has proved its worth over many years.

For investors it’s important to keep in mind that past performance is not necessarily a reliable indicator for current and future performance and that the value of investments and the income from them can fall as well as rise and investors may not get back the full amount invested. Further, investment in emerging markets may be more volatile and therefore risk to your capital could be greater.

Superpower of tomorrow?

Brazil has suffered a torrid 12 months and, despite a brightening outlook, it still faces challenges. The IMF has noted that “political and policy uncertainties remain” and “cloud the outlook”. Inflation is high, inequality is rife, the political scene is far from settled and corruption concerns have yet to be fully addressed. That said, there is the possibility that price rises will subside and that the interim president will embark on privatisation measures that could give a renewed sense of purpose to the Brazilian economy.

Investing in this fascinating and fast-changing country means looking through short-term problems to the prospect of an economic superpower of tomorrow, one whose middle class will demand, and receive, an ever-improving standard of goods and services. As with those who competed so thrillingly in Rio this year, such an investment strategy requires focus, planning, preparation and a willingness at all times to take the long-term view.

[loganair] 18/10/2016 17:06

Interesting to see City of London Investment company starting to buy in here to now being over 5% as they have been steadily buying JRS (JP Morgan Russian Securities Trust) which they now hold around 27% of.

[loganair] 14/10/2016 10:32

Slow Recovery:

Unemployment soared to a 12-year high as economists estimate that gross domestic product contracted for the seventh consecutive quarter in the three months through September. The economy will recover late this year or early next, and is projected to grow 1.6 percent in 2017 and "maybe" around 2.5 percent in 2018, Meirelles said.

Reasonable Rally:

Brazil’s business and investor confidence have improved since Temer took office on an interim basis in May, driving the Ibovespa stock index to a two-year high and extending the real’s world-beating rally this year to 23 percent.

"The recovery from that level, which was so low, is reasonable," Meirelles said.

Many in Brasilia see Meirelles, 71, as potential candidate in the presidential race in 2018 if his term as finance minister proves successful. He has had a foot in several political parties and was elected to the lower house of Congress in 2002.

A former president of BankBoston Corp., Meirelles slashed inflation when he was central bank chief for most of the past decade. After leaving the central bank, he became a senior adviser at Kohlberg Kravis Roberts & Co. Ltd and the chairman at J&F Investimentos SA, the holding company that controls the world’s largest meat producer, JBS SA. Meirelles stepped down from all positions in the private sector upon being nominated for finance minister.

[filster] 10/10/2016 10:01

That's what Brazil really needs - the US to support it as opposed to picking it up and then surruptiously knocking it down..

[loganair] 10/10/2016 10:00

The US treasury chief praised Brazil's new government on Tuesday and said the Latin American giant is "poised" to exit a painful recession and return to economic growth.

Treasury Secretary Jack Lew said after meeting with Brazilian President Michel Temer and Finance Minister Henrique Meirelles that "ambitious" reforms are taking the economy in the right direction.

"Brazil’s economy appears poised to return to growth, following the deepest recession in over 100 years," Lew said in comments after talks in Brasilia.

"I am convinced that the government’s proposed structural reforms, if passed by Congress, will help the Brazilian economy realize its enormous growth potential, including promoting the strong and balanced growth which is so important to strengthening the middle class and protecting Brazil’s most vulnerable populations," he said.

[filster] 06/10/2016 11:53

They had the Olympics and the Football World Cup - there should have been an influx of money in to Brazil. I guess even those two events weren't enough.