June 8th, 2010 - no responses
Written on Saturday June 5th:
The Financial Times’ article of last week made it clear to which extent BP and the rest of the US offshore drillers will be under the thumb of the Obama administration.
My personal view is that this impact is today calculated into the shares of BP (trading at 37,16) and Transocean (trading at 50,20). An opportunity in the coming weeks for people with a stomach?
On the more safe side: with this BP event, there will be ever increasing importance placed on reserves which will not be affected by the Obama administration. While pressures from pending U.S. legislation on oil drilling may pressure international governments to apply similar restrictions on offshore drilling, Brazil will not be one of them. Petrobras will enjoy vigorous drilling offshore on their newly discovered Tupi field. This massive find contains by conservative estimates around 6 – 8 billion barrels of oil and gas.
Actually, last Friday Bloomberg reported Petrobras did yet another oil find at the Marlim fields, adding another 380 million barrels to their reserves.
Petrobras is trading at 36,06, 50% down from its May 2009 72,38 top.
Petrobras will be good for Brazil, no doubt. And the BP events will add to this. But will Petrobras be good to its shareholders? Brazil has made it evidently clear that they intend to use Brazil’s new Tupi oil field as a springboard for their domestic economy. The Tupi oil field will become the platform which Brazil will use to invest in Education, Social Services, Infrastructure, etc.
The bets are out, end July / early August, Petrobras will organize a share offering of between US$ 50 and 60 billion, amongst the world’s largest ever launched.
And there is also…
Total
Repsol
Suncor
To put on your radar.
In my opinion, oil futures will be back at USD 85 – 90 next winter; US slows down drastically all of a sudden.
And did we hear Obama shout “Natural Gas” and “Nuclear Energy” in the same sentence?
UNG +
GAS
CYMGF +
FCG
Let’s put the flag out on a 100 portfolio:
BP: 5 at 37,16
RIG: 8 at 50,20
PBR: 12 at 36,06
TOT: 17 at 45,25
REP: 11 at 19,05
SU: 6 at 32,56
UNG: 15 at 8,18
GAS: 3 at 39,57
CYMGF: 17 at 3,92
FCG: 6 at 16,63
In August 2011 we dig this up again.
Tags: oil brazil, petrobras
May 7th, 2010 - one response
With all the turbulences in the European markets, one would almost forget this positive news:
The European Commission decided this week to relaunch talks on creating a Freetrade zone between Mercosur (Brazil, Argentina, Paraguay and Uruguay) and Europe.
Previous negotiations were stopped in 2004. Also services would enter the negotiations.
German Handelsblatt covers the start of the negotiations:
“Der Wirtschaftsgemeinschaft Mercosur gehören Brasilien, Argentinien, Uruguay und Paraguay an. Ihr gemeinsames Bruttoinlandsprodukt beträgt rund 1 300 Mrd Euro. Der Wert europäischer Investitionen in die Mercosur-Staaten lag zuletzt bei rund 155 Mrd. Euro. Laut Kommission sind sie damit höher als die europäischen Investitionen in China, Indien und Russland zusammen. In Jahren vor der Krise sind die europäischen ausfuhren Richtung Mercosur jährlich um rund 15 Prozent gestiegen.”
European investments in Mercosur total 155 Mrd Euro, which is more than European investments in China, India and Russia together.
Read also the excellent article in Brasil Economico on the topic today.
Tags: freetrade mercosur europe
October 17th, 2009 - one response
Chinese real estate has been booming. Since 2000, year estate investments grew 200% in China. The Chinese Claymore/AlphaShares China Real Estate ETF (TAO), which tracks Chinese Real Estate went up more tan 70% since January 2009.
Now add to that:
1. The demographic nightmare that China will soon be facing.
2. The global financial crisis which continues and China which will see little choice but to loosen its monetary policy even further, slashing Chinese economical growth and result in massive unemployment, which will lead to social instability.
If there is one thing that Europa underestimates than it’s the impact of a bursting Chinese Real Estate bubble. The bubble has grown mainly on the residential side of teh market, but with Beijing’s 4 trillion yan or 586 billion USD stimulus package, the bubble also started growing on the commercial side in 2009. Remember that China pumped worth 12,9% of its GDP in stimulus packages in 2009. By way of comparison: Brazil invested less than 2% of its GDP in stimulus packages to support growth.
With 70 percent of real estate investment in China coming from bank loans, a dramatic drop in land values could send shock waves throughout the economy.
Stratfor published last week an excellent report on the Chinese Real Estate bubble, you can read it here.
Especially in Beijing and Shangai the situation is dramatic. In both cities, real estate activities have accounted for more than 30% of the GDP since 2000. In Shangai real estate activities even contributed more than 50% of the GDP. A GDP which is sustained for more than 50% on an inflated real estate bubble…
No doubt there is a correction ahead on the stock exchange, but when one adds thhe extent of the inflated China real estate bubble, one could wonder how big the downward slope ahead could really be.
Tags: china real estate bubble
July 18th, 2009 - no responses
Last week, the Brazilian central bank announced that the country’s foreign exchange resreves have reached a record high of 209,5 billion US$.
The target of the Brazilian central bank is to further expand their foreign reserves to 300 billion US$.
Tags: brazilian central bank, brazilian foreign reserves
July 7th, 2009 - no responses
Quote:
“Niall Ferguson on California: It is a Latin American economy that just happens to be in the U.S.”
Paul Kedrosky has a point, the situation in California is truly catastropic; try sorting the situation yourselve.
Wells Fargo is putting up deadlines, yet no solutions are at hand with the massive job-losses; the US has lost as many jobs now as all the jobs together that were created the last nine years.
Tags: Niall Ferguson
