End of May Globo pubished an article on the rise of China as an investor in Brazil.
Until 2006 China was an insignificant investor in Brazil with no more than 6,7 million US$ a year.
That figure went up to 82,6 million in 2009 and is skyrocketing in 2010, only in the first 3 months of 2010 China invested 359 million US$ in Brazil, putting Brazil in the top 5 of investors in Brazil (France ranked foruth with 392 million US$ in the first trimester and Holland ranks third with 675 million US$).  Belgium is all down at the bottom, showing again to which extent our Belgian economy is not geared up for the new world order we are living in.

Also interesting to see is the evolution of Brazil’s major trade partners.  The USA has been for the last 80 years Brazil’s principal trading partner, followed by Europe.
The Wall Street Journal reported yesterday on China overtaking the lead of the USA; China is now with more than 36 billion US$ Brazil’s biggest trade partner.

Asian players are not only interested in Brazilian oil (Statoil sold its Brazilian operations to China’s Sinochem, the biggest M&A ever between China and Brazil), they are buying into electricity transmission lines in Brazil and the Indonesian tycoon Tanoto has significant operations in Brazil and is looking to raise about 1 billion US$ in a Hong Kong IPO to further increase his holdings in Brazil.

The WSJ concuded “For the financial world in general, it is another sign of the shift of the global center of gravity, and funding, eastward”.  Let’s all learn Portuguese and Chinese.

Also in Globo today the below interesting charts (below)

Graph one shows to which extent the price of Brazilian exports went up compared to the price of their imports.
The second graph shows the increase of net buying power.  Whereas buying a car previously required in 2001 115 minimal wages, this is now today only 95 minimal wages.
You can find today’s column of Miriam Leitao here.  Yes, I am a fan of hers; and the fact that Dilma doesn’t dare to appear on television in an debate with Miriam Leitao is proof enough for me that Serra is a far better candidate.

Tags: investment china brazil, trade brazil china

Brazil GDP grows

Tags: economy

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

BBC video: here.
The Economist video: here.
Financial Times video: here.

Last week the BBC aired a balanced video on the state of the Brazilian economy; they visited the Caixa economica real estate fair on May 27th.   They journalists makes a point on the still massive need of new low class housing to replace the favellas and the need for reforms in labour and tax laws to boost productivity.

Last weekend, The Economist also aired a video with an interview with the Brazilian Central Bank president Henrique Meirelles.  Appointing Meirelles was agood choice of Lula and the man again reassures with his monetary policy.
The latest May figures confirm inflation in Brazil steadying at 5,67% (benchmark: Belgian consumption price index rose to 2,3%, South African consumption price index was at 4,8%, but the producer price inflation in South Africa rose 5,5% y/y (+1,5% m/m) in April after rising 3,7% in March.  Meireless reconfirmed that 2010 inflation target will be met.

Also interesting this interview with Eika Batista by Jonathan Wheatley of the FInancial Times on the upcoming general election in Brazil and the relationship of Eike Batista’s company with China.

Tags: brazil video

Last December Azul started its operations in Florianopolis, with 3 flights daily to Sao Paulo (and quick connection to Rio).
Last AprilAzul also connected Navegantes with 3 daily flights.

And now there are talks to connect also Joinville with Azul flights.  Today residents from Joinville have to go to Curitiba to take a plane to the Sao Paulo hub.
Azul is just waiting for the installation of the ILS (Instrument Landing System) in the Joinville airport.

Tags: azul joinville