Standard & Poor's - Standard & Poor's eleva rating soberano de longo prazo em moeda estrangeira do Brasil para 'BBB-', grau de investimento; perspectiva estável

Standard and Poor's have classified Brazil as the 14th country with Investment Rating, according to this article on their site.

Looking at their rating, they have increased the rating to BBB, described as Investment Grade, which is defined as: "Capacity to service and repay debt normally is still satisfactory, but risks increase if conditions become adverse."

This new rating was awarded on the 30th April 2008 - previously Brazil was considered (BB), defined as: "Increasing uncertainty surrounding service and repayment of debt. Debt carries an increasing degree of risk."

./discuss

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Yes, I work for a Real Estate company doing market research and analysis but I'm not involved in sales.

Have a nice day

We knew this was due to happen, I am just surprised it took so long! Will this lead to the currency being freed up for trading so it can be bought forward?

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Michael Bush
e-mail mbush5@aol.com
http://www.thecompletepropertysolution.com
skype name michaelbush

Not sure about the currency however the financial institutions are likely to "Broaden their minds".

One of the very important factors mentioned in the report, in my opinion is that FDI in Brazil (Foreign Direct Investment) has continued a strong and steady growth in 2008 despite achieving a record 34.6 bn US$ in 2007.

The pragmatic macro-economic policies have laid solid foundations for a real GDP growth of around 4-4.5%

If the world generally feels more confident about investing in Brazil and consider that it is an increasingly safe investment, surely this will lead to higher FDI which will lead to higher investment in the country by the government which will continue the sustained growth of the economy and the middle class, which in turn increases the demand for residential property by this growing middle class who are also now starting to have access to more and more financial solutions for their purchase.

With 22 million houses in deficit currently, not counting the growth over the coming years, it is easy to see how buying a property in Brazil can be a very wise investment.

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Yes, I work for a Real Estate company doing market research and analysis but I'm not involved in sales.

Have a nice day

Yes, it is possible. Below is a link for the chart. I'm not particularly happy because my salary is in dollars and I saw my salary savings being eating 50% during the last 4 years. Let me rephrase the "not particularly happy" thing: . Perhaps I should have done this (buy Real future) few years ago; but anyway stocks and property increased in value too, balance is ok.

I hope that is the bottow and things starts moving other way around; I don't believe in surprises or anything radical though. I should choose carefully my property.


FinData: Share Price for FOREX, USDBRL - US Dollar Brazilian Real

FCZ,

Do you know if anyone trades FX options on the Real?

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Brazil Property | Pipa Brazil | Property Investment in Brazil | Guide to Pipa

Dear Robh,
Below is the Chicago Mercantile exchange site for Real future & options, but I’m confident these operations can be done in Europe as well, though Real isn’t so popular yet, but with the investment grade should increase the demand for these operations (Michael point):
CME Brazilian Real Futures & Options
It can be done as well at Bolsa de Mercadorias & Futuros:
BM&F - Bolsa de Mercadorias & Futuros
I’m a small investor (just my personal savings), so I never did it. What I do is diversify my investment portfolio. I’ve some stocks and bonds (balanced) + one apartment in the South. So, what I will do when I sell my apt., is to buy another property, in this case in the NE, not sure if for investment or Summer, but I’ll keep the diversification. I don’t buy property to make money (clearly I don’t understand it to do the buy & sell thing), but just as a safe port. I feel comfortable having my own “real” (or would say “concrete” ) asset. Actually, if I have to choose just one asset, that would be the one.
Back to Real: Investment grade brings lots of long term investments, but the speculative $$ (or “hot money”) is about to leave because they were anticipating the news. Additionally, the government may increase the IOF on short-term capital. Trade balance may become slightly negative after years of fantastic surplus, due the real appreciation. But there are so many political factors out there that we (I) cannot really anticipate. That’s why I diversify.
But yes, if you sell properties in one currency, your company may just do the other way around by buying (selling) the other currency in the future (hedging). You may even offer this option to your international clients while facing "local" prices variation. But I’ve no experience on that.
I hope it helps.

Thanks for the links, the reason I am looking at this is to find a way to protect our clients from movements in the Real or their own currency.

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Brazil Property | Pipa Brazil | Property Investment in Brazil | Guide to Pipa

I had a better look, options are only traded on the exchange for the major currencies so it looks like I will have to find a broker who will write me OTC FX options.

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Brazil Property | Pipa Brazil | Property Investment in Brazil | Guide to Pipa

If you contact Bolsa de Mercadorias e Futuros (or Bovespa, they are working together now), they should indicate a Broker in case your doesn't do it. A long time ago (one of my very first jobs) I used to work at the trading table of Citicorp. Usually options could be done 12 months (forward) abroad and 24 months in Brazil, against dollar. But financial instruments were different then. I'm getting old...

I hope you succeed in offering this plus ("insurance" against flutuation) to your clients.

My personal take is that if someone from abroad choose to buy a property in installments today (for instance, 3 years), may even do some profit with a contract in Reais. But that is a long shot, and I hope no one will knock my door 3 years from now to complain, but in case of a profit, mostly welcome to share with me!

At New York Times:

http://www.nytimes.com/2008/05/24/bu...ewanted=1&_r=1