Brazil‘s economy and exchange traded fund (ETF) are becoming more robust. As a result, the country is beginning to take on more responsibilities as its finances recover.
Taking advantage of a recent sovereign debt upgrade, Brazil will raise about $1 billion in issuing global bonds that mature in January 2041 at a price guidance of 5.85%, write Rogerio Jelmayer and Claudia Assis for NASDAQ. Brazil’s investment-grade rating has allowed the country to issue bonds with longer maturities and lower debt service costs. (Read more about sovereign debt here).
Demand for Brazilian debt is strong and some participants except the Brazilian Treasury to increase volume up to $1.5 billion. Brazilian companies and banks raised around $3.65 billion from overseas bonds.
- PowerShares Emerging Markets Sovereign Debt (NYSEArca: PCY): up 37.5% year-to-date; Brazil is 4.3%
Brazil pledged its support to the International Monetary Fund (IMF) as a world emergency lender, reports Antonio Rodriguez for AFP. Brazilian Finance Minister Guido Mantega stated the government will spend $10 billion in IMF bonds to augment the fund’s resources.
The IMF projects Brazil’s economy will contract 0.7% this year and grow 3.5% next year. (More information on Brazil’s performance this year can be found here).
Emerging market economies are seen as leading the current global recovery. These countries are growing more influential through the Group of 20 (G20) and potentially gaining more voting rights in the IMF and World Bank.
- iShares MSCI Brazil Index (NYSEArca: EWZ): up 100.8% year-to-date
For more information on Brazil, visit our Brazil category.
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.