Share Name Share Symbol Market Type Share ISIN Share Description
Jpmorgan Brazil Investment Trust Plc LSE:JPB London Ordinary Share GB00B602HS43 ORD 1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.0% 66.50 - 0.00 00:00:00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Equity Investment Instruments 0.6 0.1 0.1 511.5 25

Jpmorgan Brazil Investment Share Discussion Threads

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Latin America: The position in Latin America is more mixed, especially because many people there work in the informal economy. Not only does this make it more difficult to control the spread of the virus, as Carlos Gonzalez Lucar of RBC Wealth Management notes, but it also means that those who are unable to work are not covered by welfare and job-protection schemes, undermining confidence. Low levels of digital infrastructure in Latin American countries have also made it harder for people to shift both their consumption and their work online. The upshot has been some of the highest death tolls in the world and sharp downturns. The IMF expects the region’s economies to shrink by an average of 10% this year. Still, even in the worst-affected Latin American economies there are positive signs that growth could bounce back, says Gala. Brazilian president Jair Bolsonaro may have been widely criticised for his “obdurate̶1; handling of the crisis, and there is “little room” for fiscal policy to support growth, but economy minister Paulo Guedes is planning a series of privatisations, which have already led to many poorly performing state-owned firms moving to the private sector. This policy could “kick-start a major catch-up in terms of efficiency, especially in logistics, therefore transforming Brazil into a competitive producer”.
Brazil drowns in its own debt by Alex Rankine: With public-sector debt ballooning towards 100% of GDP, the state cannot afford generous fiscal support measures for much longer. Brazil’s democracy is tearing at the seams, says Ryan Berg on The country has just surpassed 100,000 coronavirus deaths, making it the world’s second worst-hit nation. The virus has deepened bitter political divisions. Embattled by Congressional opposition and Supreme Court probes, President Jair Bolsonaro’s supporters have called for a military coup. That’s unlikely, but political institutions, already discredited by massive corruption, are entering an advanced state of decay. A second chance: Bolsonaro’s election victory in October 2018 triggered euphoria in the stockmarket, with the benchmark Ibovespa index advancing 38% to January 2020. Yet shares then crashed a stomach-churning 43% as the pandemic hit. The market has since made up much of the lost ground, but is still down 12% for the year to date. That is a noticeable underperformance compared with the emerging-market average, down about 2%. Bolsonaro’s first 18 months in office have been disappointing for the country’s business community, says Bryan Harris in the Financial Times. Last year’s pension changes aside, promised reforms have fallen by the wayside. Economic growth has remained anaemic. Yet recent weeks have seen investors’ old “ebullience221; return. The proximate cause is a proposed tax reform, which should simplify one of the world’s most “byzantineR21; systems. Brazilian businesses are thought to spend an average of 2,000 hours complying with tax obligations, 20 times longer than their UK counterparts. Another reason for the recent rally is that government stimulus has turned out to be more generous than expected. A signature crisis measure has been a 600-real (£84) monthly stipend paid to workers in the hard-hit informal economy. Finance minister Paulo Guedes, a disciple of Milton Friedman, has emerged as “the world’s most reluctant Keynesian”, say Martha Viotti Beck and Mario Segio Lima on Bloomberg. Long an advocate of fiscal rectitude, the pandemic has forced him to run Brazil’s “biggest-ever budget deficit”, predicted to be at least 11.5% of GDP this year. The headwinds are considerable, says Craig Mellow in Barron’s. With public-sector debt “ballooning221; towards 100% of GDP, the state cannot afford generous fiscal support measures for much longer, says Alberto Ramos of Goldman Sachs. Brazil has “one of the weakest fiscal positions” of any emerging economy. Proposed tax reforms are badly needed, but Guedes will need to rally a majority in a fractious legislature. As Monica de Bolle of the Peterson Institute for International Economics puts it, talk of tax reform looks like an exercise in “shuffling deckchairs on the Titanic”.
Brazil is now cracking down on corruption. Brazil agriculture is first world and working best out of all Brazilian industries. Infrastructure is worse, most goods still transported by road rather than rail. Not a lot of money going into infrastructure in Brazil. Brazil needs more tourism and infrastructure for tourism.
Fund managers now so positive on Brazil and yet the discount to Nav is running around 20%.
From Fidelity to Schroders, Money Managers are Bullish on Brazil: Global portfolio managers are growing optimistic on the outlook for Brazil’s stock market, as the Bolsonaro administration finally delivered a long-waited social security overhaul and is set to unveil the next priority on its economic agenda. With pension reform out of the way, Economy Minister Paulo Guedes is expected to present a new agenda to Congress this week that focuses on tackling Brazil’s budget woes. It will probably include an administrative reform that restructures the civil service and cuts initial salaries, and may create a fiscal council to oversee federal, state and municipal budgets. “The prospects for equities in Brazil are bright given where we are in the economic cycle -- early -- as well as significant progress on the reform side, and attractive valuations,” said Will Pruett, who manages $542 million at Fidelity Management in Boston. Economists are expecting growth in Latin America’s largest economy to pick up to around 2% in 2020, more than double the expected rate this year, as the central bank lowers interest rates to fresh lows. Brazil is Schroders Plc’s preferred stock market in the region, according to Pablo Riveroll in London, the head of Latin American equities at the firm. The benchmark Ibovespa index has advanced 22% since the beginning of the year and some early signals of increased foreign interest are starting to emerge, after offshore investors missed most of the recent rally. “After years of weak economic growth and weak earnings momentum, the economy needs to accelerate to gather interest,” said Riveroll. “We think the conditions are there or almost there: pension reform approval, credible fiscal outlook, increasing confidence, low interest rates and inflation, and low leverage at the corporate and household level.” Here’s how investors have been playing Brazilian stocks: Fidelity, Pruett: Largest positions in Brazil are discretionary, industrial and health-care sectorsOptimistic on education, airlines, integrated health-care players, “as well as any business poised to benefit from the long-term migration of savings from government securities into higher risk products in search of yield.” Schroders, Riveroll: Likes Brazilian retailers, homebuilders, non-bank financials, tech and utilitiesUnderweight banks, materials and consumer staples. Has recently added to retailers; took some profits on homebuilders and reduced banks. Alliance Bernstein, Morgan Harting: Owns groups such as utilities that should benefit from government reforms, including Cia de Saneamento Basico do Estado de Sao Paulo, Centrais Eletricas Brasileiras SA and Equatorial Energia SA. Also likes Yduqs Part, B3 SA - Brasil Bolsa Balcao and Petroeo Brasileiro SA“We’re light on the bigger benchmark banks,” he said.
Rogério Marinho, the government’s social security secretary, says the finally passed long-awaited pension reform — which will increase retirement age to 65 for men and 62 for women, from 56 and 53, respectively — represents an 800 billion real ($194 billion) in savings over the next decade, plus 270 billion real of ancillary savings over the same period. “This is a big number. It is a good result,” says David Beker, chief economist at Bank of America Merrill Lynch in São Paulo. The pension reform should prevent the government’s debt ratio from rising over the coming years — a concern in a country where gross public debt could have topped 120 percent of GDP “if reforms are not implemented,” the International Monetary Fund warned in July. What’s next? Many international businesses have held back from investing in Brazil until the reform passed, viewing it as a litmus test for whether Guedes and his team would be able to pass a broader economic agenda, including a comprehensive overhaul of the country’s byzantine tax system. Many hope the passage of the pension reform will restore confidence in the Brazilian economy. However, Vladimir Caramaschi do Vale, chief economist for Latin America at Indosuez Wealth Management, warns that Brazil “needs to keep pushing through other reforms” if it really wants to unlock investments. Analysts warn that the positive reform momentum may dwindle if the economy does not pick up steam next year, and if Bolsonaro’s approval ratings continue to drop. With the pension overhaul finished, the urgency that underpinned it may vanish. A risk, according to Monica de Bolle, a senior fellow at the Peterson Institute for International Economics, is that the firebrand president could turn “his big mouth” on his economic team, hampering further reforms. “I am somewhat concerned about the political obstacles facing the next stage of reforms. There seems to be more opposition than there was against pension reform, and not the same urgency,” says William Jackson, chief emerging markets economist at Capital Economics.
Brazil has privatized or sold state assets worth $23.5 billion in the first nine months of the year, already surpassing its full-year target of $20 billion, the country's economy ministry said. Brazil's government has made clear it will reduce the state's footprint in the economy via asset sales, privatizations and concessions across a range of sectors, all of which it hopes will attract foreign investment into the country.
Brazil's President Jair Bolsonaro on Friday sanctioned the Economic Freedom Act (MPLE), mostly known as "the mini labor reform", a proposal whose main objective is to facilitate investments by reducing the regulations employers must comply with.
In 10 years Brazil could become the 4th largest oil producer after Saudi Arabia, USA and Russia.
TPW Investment likes China and Brazil out of all the emerging markets.
Moody's: Consumers are fueling the gradual recovery of Brazil's economy: -Consumers contributing the largest share of total economic output in Brazil, driving the economy's entire growth cycle -GDP recovery and low inflation add purchasing power to wage increases Similarly to most of the world's major economies, consumers contribute the largest share of total economic activity in Brazil and drive GDP. According to Moody's Investors Service in a new report, employment growth, low inflation, improving retail sales and rising consumer credit in a lower interest environment is supporting the gradual recovery of Brazil's economy. "In Brazil, employment growth is key to supporting consumption growth," says Moody's Senior Vice President Gersan Zurita. "Employment has been gradually improving since the end of the economic recession, with a rising share of the population slowly returning to the workforce. Furthermore, rising real wages coupled with low inflation and well-anchored inflation expectations is adding to consumer purchasing power." Retail sales are gradually improving as consumer confidence recovers after the recession. Broad retail sales, which include building materials and vehicles sales, have slightly recovered since the end of the recession but remain well below the cyclical peak reached in 2013. Conversely, the slow recovery in vehicles sales remains disappointing, with sales below the levels predating the recession. On the other hand, the outlook for housing looks more promising, with a more visible recovery in both units sold and values than consumer goods. Despite the slow recovery in consumption, the demand for consumer credit has continued to rise in both nominal terms and as a share of GDP. Moody's expects demand for consumer credit to continue to rise moderately in the next two years, particularly if the reforms succeed in Congress, which will enable rates to shift lower.
Threadneedle Investments - Out look for the Brazilian market looks interesting as the Government is pro-business.
JPB now at a massive 24% discount to NAV.
If the BRL exchange rate increase by 10%, that alone to add 7p to the JPB share price.
The positive momentum favouring the imminent passage of the Social Security Reform continues, with the goal to conclude the Lower House approval by the weekend. Such an impressive result should trigger a BRL rally, but the rally would be limited by the central bank’s willingness to cut rates, by as much as 150bp, which has reduced the currency's appeal. We are nearly there: After years of negotiations, and much political turmoil, it finally appears that we are days away from the approval of the social security reform by the Brazilian Congress. The pro-reform momentum improved sharply last week, with the approval of the reform by a wide margin in the Lower House’s Special Committee, and with Speaker Rodrigo Maia standing out for his leadership and savvy command of the House. In fact, congressional leaders aim to fast-track the debate and have the reform fully approved by the Lower House, which requires a 3/5 majority support in two rounds of the vote, by the weekend. Such an impressive result would consolidate Maia’s reputation and would bode well for the ambitious post-reform agenda advocated by the Speaker, which is broadly consistent with the agenda of the Bolsonaro administration, and includes the tax reform and the formal independence of the central bank. There remains some uncertainty about the timing and the content of the draft that the House should eventually approve. Passage of the proposal already approved by the Special Committee last week would be a favourable outcome. But the text could be improved with an amendment to, at least, facilitate the extension of the reform to states and municipalities, or it could worsen with, for instance, the easing of the retirement rules for police workers, as advocated by Bolsonaro. As it stands, the reform could generate savings of about BRL 0.9-1 trillion in 10 years, which is far higher than initial investor expectations and reflects a very mild dilution in the fiscal savings initially proposed by the Bolsonaro administration (BRL 1.1 trillion). This result would go a long way towards ensuring the long-term sustainability of Brazil’s fiscal accounts and should be enough to prompt a reassessment of the near-term credit ratings trajectory for Brazil. But actual upgrades may take a while longer and should depend, in our view, on the evidence of a stronger recovery in economic activity, which is expected to pick up pace in the second half of the year. Reform approval would green-light the monetary easing process: The approval of the reform should have an invigorating impact on the outlook for economic activity, but the reform should also have a benign impact on the inflation outlook. As a result, the reform’s approval should not prevent the central bank from adding to the monetary stimulus that is already in place. In fact, given the (1) ongoing improvement in current inflation trends, as illustrated by falling and fully-anchored inflation expectations, (2) the expected post-reform appreciating bias for the BRL and (3) the dovish shift seen in central banks across the world, we believe the balance of risks favours a larger, more frontloaded and more lasting cycle than currently priced in the local curve. Central bank officials have been on the defensive in their effort to justify their reluctance to ease monetary policy, despite the poor economic activity data and high unemployment. Inaction was generally justified by the lingering uncertainties regarding the passage of the social security reform. But with the reform approved and the yearly rate trending considerably below-target, at around 3-3.5% throughout 2H19, the central bank’s ability to justify inaction should weaken materially. Fully anchored inflation expectations and ample spare capacity. The BRL could lag other local assets: With the reform approved, political uncertainties related to the sustainability of fiscal accounts should ease materially and prompt an improvement in the outlook for economic activity and for local assets in general. The Brazilian Real should also rally, but the extent of that rally should be limited by the central bank’s willingness to cut rates (by as much as 150bp), which should reduce the currency’s appeal. Lower rates should also incentivize the use of the USDBRL as a (relatively cheap) hedge to external risks, such as trade wars, as other local assets such as equities and rates are seen as more appealing. In addition, as indicated by central bank officials recently, the lower cost of financing in BRLs has also reduced the inflow of USDs in Brazil this year. And this shift could intensify post-reform, as the SELIC policy rate is further reduced and the local debt capital markets deepen further. As a result, we now believe that the post-reform trajectory for the USDBRL may bottom at a higher level, closer to 3.6 than 3.4. In any case, with the reform approved this week or next, we would expect the Brazilian central bank to be able to launch the easing cycle in its 31 July meeting, possibly with a 50bp cut. This would bring the SELIC rate to a fresh record-low of 6.0%, from 6.5% now. Consecutive 50bp cuts would bring the SELIC rate to 5.0% by the end of October, but a shallower or less-frontloaded cycle should not be ruled out. A more frontloaded cycle would be amply justified as a catch-up measure needed to help address the paralysis in economic activity seen in recent quarters. The central bank’s own projection for 2019 GDP growth collapsed recently, moving from 2.0% as of the end of 1Q19 to just 0.8% as of the end of 2Q. And, as the chart below illustrates, Brazil’s GDP remains 5.5ppts below the peak seen in 2013. Disappointing economic activity and a long way to go to full recovery:
Brazil's Supreme Court voted to allow the government to sell subsidiaries of state companies without congressional approval, making it easier for President Jair Bolsonaro's administration to raise money, cut debt and attract private investment as the economy struggles. The decision Thursday evening also allows the country's largest state enterprise, oil major Petróleo Brasileiro SA, or Petrobras, to continue its sale of noncore assets. With the decision, the Bolsonaro administration will now be able to carry out its plan to sell as many as 100 businesses more quickly than would have been possible if it needed to go through the country's splintered Congress. The cash-strapped government aims to raise $20 billion through asset sales this year apart from the sale of Petrobras' assets. Getting congressional approval "would have added months or even years to a privatization process, especially considering that this administration lacks an organized base of support" in Congress, said Leonardo Barreto, a political consultant in Brasília. Dozens of parties are represented in Brazil's Congress and the administration has had a difficult time getting legislation approved because Mr. Bolsonaro's party doesn't have a majority in either house. The Brazilian government owns all or part of more than 130 companies. In addition to Petrobras are lenders Banco do Brasil SA and Caixa Econômica Federal, news agency EBC and South America's biggest electric company, Centrais Eletricas Brasileiras SA, or Eletrobras. "The majority of the businesses the government plans to sell aren't parent companies, they're subsidiaries," said Solange Chachamovitz, chief economist at ARX Investimentos. "The decision removes considerable legal uncertainty and clears the way for the economy to become more productive." Thursday's decision was based on an article in the 1988 constitution that says state companies can only be created when needed for national security or for "relevant collective interest," and with congressional approval. The justices inferred that selling those same firms must require lawmakers' vetting, but that selling subsidiaries doesn't. The door remains open for allegations that privatizing controlling companies like Petrobras, Banco do Brasil and CEF wouldn't need lawmakers' blessing, said Marcio Holland, an economist from Getulio Vargas Foundation who has researched Brazil's state enterprises. "The 1988 constitution establishes state participation in the economy as the exception, not the rule," he said. "Because these companies were created before the constitution, it can be argued that their privatization wouldn't require congressional approval."
The year before the trade dispute between the US and China, the US imported 40m tons of Soya Beans, in the past year this has fallen to only 6m tons. A good amount of this difference will be picked up by Brazil selling to China.
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