Jpmorgan Brazil Investment Share Discussion Threads

[loganair] 04/4/2012 16:59

What are Brazil's credentials?

Brazil isn't just Pele, bikini-clad women on beaches and partying at carnivals. The country has a serious side and is one of the fastest growing economies in the world, let alone South America.

It is the 5th largest country in the world in terms of land mass, with a population of 193m, again the 5th largest in the world.

The country is rich in mineral reserves. It is a big producer of iron ore, aluminium, copper, chrome, gold, tin, nickel, manganese, zinc and potassium.
It has vast amounts of available land for agriculture, and produces soya beans, fruit, cattle, coffee, sugar and cotton

The country is also rich in natural resources – it has 12% of the world's freshwater.

- Global iron ore/mineral demand
- Huge oil discoveries
- Bio fuels leadership
- Agriculture export leadership
- Growing and spreading affluence
- Infrastructure build out
- Domestic demand opportunities
- Growing IPO pipeline

Brazil offers very strong potential in agri-business and also has low land prices compared to those in Argentina and the United States. It ranks at the top of exports worldwide for coffee, citrus, sugar, soybeans, poultry, beef and tobacco.

[loganair] 28/12/2011 09:54

Monday 26th December 2011 16:21 GMT

Brazil has overtaken Britain as the world's sixth largest economy, a London-based research group said Monday.

In its latest World Economic League Table, the Centre for Economics and Business Research (CEBR) said Asian countries were moving up while European countries were slipping down.

CEBR chief executive Douglas McWilliams told BBC radio that Brazil's advance was part of a wider trend.

"I think it's part of the big economic change, where not only are we seeing a shift from the west to the east, but we're also seeing that countries that produce vital commodities -- food and energy and things like that -- are doing very well and they're gradually climbing up the economic league table," he said.

Brazil's population of about 200 million is more than three times that of Britain.

The Brazilian economy grew 7.5 percent in 2010, but the government has cut its growth projections to 3.5 percent for this year after the economy slowed in the third quarter.

The CEBR also predicted that the British economy would overtake France -- ranked fifth this year -- by 2016 and it said India, the world's 10th biggest economy in 2011, would move up to fifth place by 2020.

[loganair] 20/10/2011 18:01

Brazil is gambling that the global economy will worsen – if it gets its bet wrong, investors will suffer.

The Brazilian central bank has been taking the machado to its base interest rate, first surprising markets with a bumper 100 basis point cut at the end of August, and then last night swiping off another 50 basis points to 11.5%.

By embarking on this strategy, the authorities are stating quite clearly that rising inflation, which hit 7.3% last month, is not their priority. Instead, it's the threat to economic growth that they're worried about – one that hinges on unpredictable developments in Europe, China and elsewhere.

This is a 'high risk' strategy, explained Sebastian Luparia, who manages JP Morgan's Brazil investment trust. 'The government is very concerned about external markets. That's why it's making a bet and trying to be pro-active,' the investor said from his Sao Paulo base. 'The right decision is to be proactive and cut rates. But the magnitude is too much.'

Economists at HSBC say the central bank has been responding to an adverse scenario that has yet to materialise.

Skittish investors seem to share this growing unease. The latest data from EPFR shows that in the second week of October Brazil equity funds posted their biggest outflows since March. And according to a survey of fund managers from Bank of America Merrill Lynch, enthusiasm for Brazil has waned, though investors do remain overweight there.

Brazil depends less on exports than other emerging markets. But the goods it does shift overseas mainly go to China. 'So whatever happens in China will have impact in Brazil and whatever happens in China is linked to the global economy,' said Luparia.

Not everyone is down on the central bank. Some say that it has moved presciently. 'Brazil is often among the first economies to be hit by a deterioration in global conditions', commented Neil Shearing of Capital Economics, and recent data already suggests this is happening, he added.

But this uncertainty does not make it easy for investors in the region. One of the top investors in Brazil, Will Landers, who runs the BlackRock Latin American investment trust, reported yesterday that shares in his trust dropped 14.3% in September, even worse than the 13.7% decline of the broader Latin America index that it benchmarks. His fund is heavily exposed to Brazil. And Alan Saunders, chairman of the JPMorgan Emerging Markets Investment Trust, admitted in the trust's annual report this month that high prices, a strong currency – which has been the subject of extreme volatility – and a lack of liberalisation means 'Brazil has been a relatively difficult place to make money,' a sentiment that Luparia agrees with.

The Brazilian stock market, the Bovespa, has lost some 22% of its value so far this year, worse than the broader emerging market index. And the volatility in the commodity-heavy index will undoubtedly continue. Luparia has responded by shifting his portfolio further away from companies that are closely tied to the economy.

He says the market is now good value. 'There are lots of uncertainties. When there are some certainties, there will be multiple opportunities to benefit. But the timeframe is very uncertain,' according to Luparia.

[loganair] 13/7/2011 20:12

Unexpected 0.5p dividend for those on the register at 15th July, payable 02nd August. That's going to be automatically reinvested straight back-in.

I also like how the Investment Managers are willing and are being significantly different to the benchmark. Shows they're willing to think about things and try something different.

[igoe104] 11/7/2011 10:12

WORTH A READ.

[igoe104] 01/7/2011 08:13

WORTH A READ.

[igoe104] 25/6/2011 16:42

Attractive outlook for Brazil investment, according to fund managers


Attractive investment opportunities can be found within the massive infrastructure spend that is going on in Brazil for the 2014 FIFA football World Cup and the 2016 Olympic Games, it is claimed.

According to BNY Mellon ARX international investors are increasingly recognising the appeal of the Brazilian equity market. Rogerio Poppe, senior portfolio manager of the BNY Mellon Brazil Equity Fund, has been analysing the outlook for Brazil since the presidential election in late 2010 at which Dilma Rousseff became the country's first female leader.

'We have worked hard to gain the clearest possible picture of how the Brazilian government and the monetary authorities will approach the issue of the current inflationary pressures the country is facing, so the recent round of monetary policy tightening was to be expected,' he said.

'While we remain extremely optimistic over the long term prospects for the economy, tighter monetary policy may put temporary pressure on some of the companies in which we are invested,' he explained.
'However, given that equity valuations are likely to be a little stretched, not least because of an expected decline in the rate of GDP growth, we remain firmly convinced that our relatively defensive investment strategy will continue to prove fruitful in the long term,' he added.

With low levels of economic growth expected to remain a pervasive problem in developed markets, he remains positive on the outlook for foreign investor flows into Brazilian equities and says it should help support valuations.

'While our outlook for Brazilian GDP growth is less optimistic than in the past, we don't anticipate that this will have a severely adverse effect on corporate earnings expectations. In other words, despite our expectations for fiscal and monetary tightening in Brazil, we don't expect to see a very significant sell off in the equity market,' Poppe added.

Infrastructure has the most attractive outlook, he believes. 'We expect the government to pursue an aggressive policy of infrastructure building, with the 2014 FIFA World Cup and the 2016 Olympic Games in Rio de Janeiro being important drivers in this respect. In addition, volumes of initial public offerings are expected to be high over the coming months, creating a number of opportunities to gain exposure to newly listed companies,' Poppe explained.




Poppe and his team believe that hosting these events will have a beneficial economic impact on Brazil, coming principally from investments in general urban infrastructure. 'These investments will boost economic activity almost immediately, and have the potential to lead to improvements in overall production levels in the longer term. The initial investment is estimated at around US$11 billion, but we believe the number could grow substantially to around US$25 billion as we approach the event,' he said.

'We believe events will help to drive much needed infrastructure spending in Brazil where recent spending has been on the low side because of the fiscal effort to reduce government debt. 'However, in order to maintain economic growth at or around the 5% mark in the coming years, Brazil will need to make significant investments in infrastructure such as highways, railways and airports, and we should therefore expect to see an increase in concessions from the government in these areas,' he added.

In terms of the immediate outlook for Brazilian equities, Poppe strikes an optimistic tone. 'We maintain a very positive view, and are optimistic about prospects for long term earnings growth for Brazilian companies. At the sector level, we believe banks may currently offer potentially attractive investment opportunities. Our main source of optimism lies in the belief that banks' earnings will not be as adversely affected by regulatory changes as recent share price declines might suggest.

'Meanwhile, current, unspectacular rates of GDP growth in Brazil lead us to take a more cautious stance on the outlook for consumer related stocks. We anticipate that the pressure on Brazilian consumers will only increase as a result of expected further monetary tightening. Conversely, our increasingly optimistic outlook for global growth has led us to take a more positive view of the outlook for commodity prices, and we expect this dynamic to support the shares of Brazilian companies involved in the basic materials sector,' he concluded.

[igoe104] 23/6/2011 11:45

BRAZIL economy is in for a good 10 years and beyond, im going to keep adding every year in this fund.


Could strong Brazilian economy lead to money transfers?
Jun
2011
Buying Overseas Property Property moguls may want to look into an international money transfer after hearing how now is the ideal time to invest in Brazil.

Paul Collins, editor at BuyAssociation.co.uk, explained how the country is currently one of the top investment destinations for those looking to buy abroad.

He suggested that for Brits in particular, there is plenty to be gained from owning a property in South America.

"The opportunities for inbound tourism and to rent out anything that you might buy, is very, very strong," Mr Collins stated.

Individuals were advised that the Brazilian government has worked hard to mitigate the effects of the global downturn and, as a result, the economy is "very strong".

Mr Collins commented: "The economy is still growing and by the time they have had the Olympics and World Cup go through the country, it is predicted to be the fifth largest economy in the world."

He added that this reflects the stability of Brazil and should be noted as an impressive achievement for a nation of such size.

The country's Office for Geography and Statistics recently reported that the gross domestic product (GDP) had risen by 1.3 per cent in the first quarter of 2011 compared with the last three months in 2010.

This was a 4.2 per cent yearly increase, with the main highlights being in services (4.0 per cent), industry (3.5 per cent) and agriculture (3.1 per cent).

GDP reached R$ 939.6 billion (£362.7 billion) in the first quarter of 2011.

Property investors who decide to follow Mr Collins' advice and consider purchasing homes in Brazil may require currency exchange services when looking to fund their latest venture.

[loganair] 22/6/2011 17:44

Goldman Sachs wrote a report saying that by 2050 Brazil will be the 4th largest economy behind China, USA and India with Russia coming in at 5th.

[igoe104] 07/6/2011 19:56

Abit in the FT.

MENTIONed jpb is cheap compared to its 6 months mid-price.

[igoe104] 07/6/2011 15:41

I think this is great stock to put in a ISA.
and to keep adding every time, 2020 brazil will be a major economy for sure.
ive started early this year.

[igoe104] 07/6/2011 15:22

I'm looking at investing in the Brazilian economy over the next coming years, and i think this is the best way of investing into Brazil

key points.

•One of the only available closed ended routes open to UK investors to invest in the Brazilian market
•Access to the world's 10th largest economy
•Rising domestic investment as Brazil plays host to the 2014 World Cup and 2016 Summer Games
•A transformed economy - low levels of debt and a rapidly growing stock market
•The Company will measure its performance against the MSCI Brazil 10/40 Index (in Sterling).