The first round of presidential elections has seen Brazil stock markets jump 5.3% since news of the vote results were announced.
After sealing the majority of the votes by 42%, President Dilma Rousseff’s victory was not enough to win outright meaning pro-business candidate Aecio Neves may still be in with a chance, clinching an unexpected 34% of votes and resulting in a run-off vote which is to be held on 26 October. The favourite, Marina Silva only managed to gain 21% of the votes meaning she is now out of the race.
The news sent the BRLA Investment Trust (which has a 64% weighting to Brazil stock markets) to the top of the FTSE, up by 6.7% creating the ultimate boost for investors. The past five years has been disappointing for BRLA shareholders seeing a near 6% decline even with dividends included.
With the success of either candidate dependant on gaining the support of Silva voters, the anticipated run-off vote between Neves and Rousseff will certainly lead to rallies in the countries stock market, whichever candidate prevails.
Source City Wire
Brazil’s financial services start-up Company, Nubank is launching its first MasterCard Platinum credit card manageable through an Android or iOS app following the $14.3 million raised by the company led by Sequoia Capital – the first Brazil investment in a start-up.
Getting a credit card in Brazil can take weeks, lots of paperwork and many visits to a physical bank: Nubank intentions are to swipe all of that away.
David Vélez, founder and CEO of Nubank who used to work for Sequoia specifically to help scout out investment opportunities in South America told Tech Crunch “After spending more than two years looking at technology opportunities with Sequoia in Latin America, we got convinced that there were a ton of high quality opportunities for starting tech companies in this country, but not in the sectors that most tech companies/entrepreneurs were pursuing,”. He went on to say “I decided to strike on my own because I had always wanted to be an entrepreneur, and as a venture investor I saw more interesting opportunities on the entrepreneur’s side of the table, than in the investor’s side of the table.”
There are also some more Brazil Investment advances that Nubank is tapping into. The country has been seeing a boom in broadband penetration, headed largely through smartphone growth. Today, there are 90 million smartphones in use among Brazil’s population of 200 million and growth is not slowing down.
“Our story is not about under-penetration of banking. It is about offering credit products to already banked customers that are currently completely overpaying in terms of fees and expenses, and getting a very poor experience in return,” he says. “Since we don’t have to pay for expensive [physical bank] branches or other costly infrastructure, we can pass those savings to our customers in terms of no fees products, lower interest rates, and excellent customer service. Our customers also don’t want to pay for that expensive infrastructure by the way.”
Brazil’s mortgage market grew from just 1.5% of GDP in 2007 to about 6.2% of GDP in 2012 and is still growing showing the attractiveness of any Brazil Investment
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Click here to view 20 Reasons to Invest – Part 1
5) An overwhelming demand for housing – Within Brazil’s big cities, house prices have soared as salaries have grown and mortgages have become easier to obtain. Although many anticipated a general slowing, demand continues especially in the north east where many areas are being transformed to cater for the increasing tourist trade. Prices nationally rose by 12.7% in 2013 (Fipezap house price index) with the north east again expected to be higher due to new developments and a general shortage of affordable property.
6) The Brazilian Real 20 years on – Introduced to Brazil on 1st July 1994, the Brazilian currency, the Real, replaced the Cruzeiro which suffered from rampant inflation over a 30 year period. Since the Real launch, the currency has seen more stability giving confidence to international investors. As part of the BRICS economy, current Brazilian President Dilma Rouseff has been working hard to achieve the central banks inflation rate target of 4.5%. The north east has favoured much better as inflation was under 5 per cent in the 12 months to April 2014 compared with a national average of 6.4 per cent.
7) Hotel Demand on the Increase – With the massive amount of investments being channelled in to the north east region of Brazil, hotel chains are now cashing in. Ibis (part of the Accor hotels group) together with Best Western International who have over 4,000 hotels worldwide, are now firmly established in Brazil. According to data by real estate consultancy firm Jones Lang LaSalle, the number of hotels rated above two stars with online booking services are expected to rise more than 70% over the next decade. By the end of last year, Brazil had 313,833 hotel rooms registered, according to tourism ministry data. Fresh capital should also help BHG, Brazil’s only listed Hotel Company, who aim to increase the number of available suites by 50% at the end of 2015 from the current 8,539.(Reuters)
8) Brazil Welcomes Foreign Investment – Unlike some countries from around the world Brazil has been opening its doors to foreign investment for some time now. Because of its strict import taxes, companies from outside Brazil are reaping huge rewards since relocating their businesses to Brazil. In turn Brazil is also benefiting from foreign investment with over $180 billion coming into Latin America in 2013. Foreign companies interested in investing in Brazil count on numerous tax incentives granted by the Brazilian government on the municipal, state and federal level. Most incentives are granted upon the submission of a project comprising the minimum invested value, addressing job creation and other relevant matters. (Source Apex Brazil)