It could be a win-win situation for both Brazil and exchange traded funds (ETFs) that hold Wal-Mart as a top component.
Wal-Mart (WMT) is looking to expand in Brazil, where they are the third-largest retailer, in hopes that Brazilians will shop till they drop.
Wal-Mart is looking to invest $1.1 billion into the country in 2009, which is up 50% they planned to spend this year, reports Fabiola Moura for Bloomberg. This will be the largest investment endeavor since the company entered the country in 1995.
In Brazil, economic growth may be at a snail’s pace, but gross domestic product is likely to expand at more than twice the pace of the United States’. In 2009, more than 90 new stores are planned, up 28% from the 318 stores open now. It also may generate 9,000 new jobs.
iShares MSCI Brazil Index (EWZ) is down 9.6% year-to-date.
Wal-Mart is riding a wave of success lately, thanks to its position as a discount retailer that consumers have turned to when budgets have been tight. The company’s second-quarter profit has risen 17%, reports Anne D’Innocenzio for the Associated Press. The world’s largest retailer predicted slower sales growth at established stores for the third quarter, however.
Labor groups are looking into an investigation into whether the company violated federal election laws by telling employees that electing Democrats would lead to passage of legislation making it easier to unionize companies, report Kris Maher and Ann Zimmerman for the Wall Street Journal. The company opposes this, and no company is permitted to expressly advocate to hourly employees the election or defeat of specific candidates.