Best Investment Opportunities

With the global economy fluctuating wildly, finding the best investment opportunity is challenging. Obelisk International takes a look at global investments and offers a pick of the best for 2012.

In the midst of the ongoing global uncertainty, many conventional investment opportunities are no longer staples for returns. In this scenario, investors are increasingly searching for that ‘safe haven’ for private investment. As a result, conserving wealth as well as building on it is a top priority when sourcing investment opportunities.

Security is Priority

“Over the last two years, we’ve noticed that money-back options are priority for investors,” comments Gary Hardacre, CEO at Obelisk International. He believes that this reflects the current economic uncertainty. “Our Brazilian investments provide that tandem of a financial cushion plus profits,” says Mr Hardacre, “with the advantage of money back after just one year.”

These opportunities for investment are found in Brazilian real estate, one of the few global property markets where domestic demand drivers guarantee sustained growth for at least the next decade. The niche market selected by Obelisk International within Brazilian property is social housing, which enjoys the security of 100% government backing and financing.

Mortgages in Brazil

Part and parcel of real estate in Brazil is the fast-growing mortgage market, another area where Obelisk International believes there are excellent investment opportunities. “The potential for growth in Brazilian mortgages is massive,” Mr Hardacre explains.

Home loans currently represent just 5% of Brazil’s GDP and according to the President of the Brazilian Central Bank, Alexandre Tombini, this should rise to 15% over the next decade. “This growth and the solidity of the Brazilian banking system make mortgages an interesting sector for investment in Brazil,” says Mr Hardacre.

Feeding the World

Along with a booming market for real estate, Brazil presents a wealth of other investment opportunities. Its plentiful natural resources include vast tracts of agricultural land (19% of the world’s arable land) making Brazil a major player in global food supplies. This role will increase in importance as the world’s population grows.

As a result, many private investment advisors tip Brazilian agriculture. Investments take the form of purchasing agricultural land, farms or food production companies or investing directly in food commodities in Brazil. Soya bean and wheat are among the best investment opportunity.

Some analysts believe fast food chains have excellent investment potential. Fast food stuffs are gaining rapid ground in many African and Middle Eastern countries leading to investment opportunities in shares either in the fast food brands themselves or in supplier companies.

Gold & Francs

Investment analysts are unanimous that opportunities for investment in 2012 will continue to include two traditional safe havens for wealth – gold and Swiss francs. Both have performed exceptionally well during 2010 and 2011, and are perceived as secure deposits by individuals and institutions alike.

Gold prices have reached record highs this year reflecting huge investor confidence in the precious metal. Gold is therefore an expensive investment option for first-time buyers, although since the global economy looks unlikely to recover over the next year, gold will remain a safe investment opportunity during 2012.

Switzerland with its political stability and solid balance sheets continues a favourite investment bolt hole. Its currency, the Swiss franc, has traditionally provided investment security. Investors in the franc have seen excellent returns this year, a pattern expected to repeat itself in 2012.

On Balance

Economic patterns are notoriously difficult to predict and are even more so in the current climate. While 2012 will undoubtedly bring its share of financial uncertainty, Obelisk International believes carefully-chosen investment opportunities will provide security and profit.

Along with gold and Swiss francs, emerging markets are undeniably the place to be, although not all markets or investments carry the all-important security. For Obelisk International, Brazil - particularly its real estate and mortgage markets - brings together all the right ingredients for some of the best investment opportunities for 2011 and 2012.

Contact Obelisk International on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: www.obeliskinternational.com.
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The Spotlight is on Dilma

Much of the confidence in Brazil investment opportunities comes from the perception that Brazil has a strong government led by determined leaders. President Dilma Rousseff is one such leader and this week, she captures the spotlight on the international stage.

Dilma’s higher than usual profile this week is US-based. The Brazilian President features on the front cover of Newsweek in its American edition and Dilma will be the first woman head of state to open a United Nations General Assembly. In addition, she will receive the Woodrow Wilson Public Service Award.

This stream of accolades comes as recognition of Dilma’s decided leadership of Brazil, currently a leading light in times of global uncertainty. Dilma’s international acknowledgment will also serve to further corroborate Brazil as a destination for some of the best investments for 2011, particularly when it comes to political and economical security.

Brazil in Control

Newsweek, under the title “Don’t mess with Dilma”, details the President’s personal and political life. The article emphasises Brazil’s economic growth and Dilma’s part in this. The recent visit by Barack Obama when he referred to Brazil and the US as “equal partners” and Dilma’s inauguration of the UN General Assembly confirm Brazil’s presence in the world arena.

When asked what differentiates her country from the rest of the world, the Brazilian President highlights Brazil’s strong political and banking controls. For Dilma, these controls mean Brazil can counteract slower economic growth or even global stagnation, unlike many other countries.

Recent statistics back this theory – Brazil barely suffered the effects of the 2008 global recession and currently has record levels of employment and middle class growth. Direct foreign investment in Brazil is also seeing the highest rates ever with private investment in equity at the top.

The latest Ernst & Young Capital Confidence Barometer Brazil recently concluded that when it comes to Brazilian investment opportunities, “the pluses far outweigh the minuses”. This sentiment is echoed by many foreign companies active in Brazil including Obelisk International, present in north east Brazil. “2011 has certainly been the year with most investor interest and activity,” comments Gary Hardacre, CEO at Obelisk International.

Centre Stage

In addition to her front cover presence, Dilma is also receiving the prestigious Woodrow Wilson Public Service Award. For Jane Harman, CEO of the Woodrow Wilson Center, “President Rousseff’s story has inspired millions of women throughout the world to reach for leadership”.

Shortly after receiving the award, Dilma will open the General Assembly at the UN in New York where she will be the first female head of state to do so. After just nine months as President of Brazil, Dilma is proving to be an immensely influential leader, capable of leading her own country and others. Brazilian investment is undoubtedly in safe hands.

Contact Obelisk International on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: www.obeliskinternational.com.
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First Delivery of Minha Casa Minha Vida Investment in Parnamirim

Following the draw that took place in July, the city of Parnamirim has now delivered the first Minha Casa Minha Vida development. At the ceremony attended by local and regional dignitaries, the dream behind the biggest investment in Brazilian real estate started to become reality.

Parnamirim, just outside Natal, is one of the fastest growing cities in Rio Grande do Norte and a major focus for social housing investments in Brazil. The Mayor has so far committed the locality to Minha Casa Minha Vida projects building over 3,700 homes including some Obelisk International developments.

The city’s first social housing project is located in the up-and-coming area of Vale do Sol, near the BR-101 highway. Consisting of 22 blocks, this Minha Casa Minha Vida development cost R$14.4 million, entirely financed by Caixa Economica Federal. In keeping with the programme’s objective to boost employment, all workers who took part in Parnamirim’s first social housing project were from the city or nearby ensuring local job and wealth creation.

Dream Come True

In the presence of thousands of locals from Parnamirim, the Mayor handed the keys of the 352 apartments over to the lucky new owners. The first key went to Ideuzuite Oliviera, a 62-year old grandmother who will be joined in the apartment by her daughter and two grandchildren. “This is the first house I’ve ever owned,” said Mrs Oliveira, deeply moved by the occasion, “and I can’t wait to move in”.

Thanks to subsidies from the government’s investment in the programme, the new homeowners in Parnamirim pay a mortgage of just R$50 a month. They are also exempt from Brazilian real estate tax for ten years and are not obliged to pay land registry fees. The council has given each apartment owner five light bulbs and a new fridge as a housewarming present.

The Mayor also described the event as “moving” and highlighted the huge social change being generated by the Minha Casa Minha Vida programme. This was reiterated by Caixa representatives and Rio Grande do Norte’s members of the Brazilian parliament present at the ceremony.

Social Aspect Behind Investment

In Brazil, the Minha Casa Minha Vida social housing programme is instigating wide-reaching changes. These range from employment creation and financial boosts for local economies to providing adequate living conditions for millions of families.

Gary Hardacre, CEO of Obelisk International underlines the importance of the social aspect behind this Brazilian real estate investment opportunity. “There is no doubt about it,” says Mr Hardacre, “Minha Casa Minha Vida is making a real difference to the lives of ordinary Brazilians and this can clearly be seen in Parnamirim.”

Contact Obelisk International on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: www.obeliskinternational.com.
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Best Prospects for Brazilian Real Estate in North East

The market for property in Brazil continues to move fast, powered by huge demand from the middle classes. Within this dynamic market, north east Brazil seems to have the edge on potential for investment opportunities in real estate.

Brazil is seeing changes in its current property situation, particularly in the south east around Sao Paulo. Here, prices have risen by 30% over the last year and some Sao Paulo real estate is more expensive than prime property in the US. Various metropolitan districts are also experiencing a slowdown in new developments.

But in this huge country, the south east corner is just a part of the whole and to get the bigger picture, you need to move away from the heavily-populated south east. In the north east of Brazil, the property market continues to boom, as more and more international and Brazilian developers including Obelisk International have discovered.

Overload in Sao Paulo

As the largest city and the country’s financial hub, Sao Paulo is naturally the scene of most property development in Brazil. The recent high level of real estate activity has led to the most expensive property prices in the country and a temporary overload in the market with many developers choosing not to launch new projects.

Prices have soared so much that prime property in Sao Paulo is in some cases more expensive than the equivalent in New York. The lack of new builds in the city has led to the recent cancellation of the annual Sao Paulo Property Exhibition held by Secovi-SP. However, most analysts agree this situation is provisional since intense local demand for property in Sao Paulo will continue to drive new development forward.

North East is Business as Usual

In the north east of Brazil, it’s a very different story with the region suffering none of the problems facing Brazilian real estate developers in Sao Paulo. While lack of building space in Sao Paulo has led to exorbitant land prices, availability of land is not a problem in north east Brazil. Here, there is plenty of building land and the recent boom in the number of new projects reflects this situation.

The middle classes in states like Rio Grande do Norte and Bahia drive demand for property. This demand is apparent at all levels including the lower middle classes who qualify for the social housing programme, Minha Casa Minha Vida. The programme has divided its nationwide allocation of 3 million homes into regions with 34% of units going to the north east and 37% to the south east. This very similar allocation proves that north east Brazil has comparable potential for those planning investment in real estate in Brazil.

“Huge demand is undoubtedly the main factor behind the long-term potential for the real estate market in Brazil,” says Gary Hardacre, CEO at Obelisk International. “For many Brazilians, owning their own home is still an unrealised dream and while this situation continues, so will investment opportunities.” However, Obelisk International firmly believes that the best opportunities for investment in Brazil at the moment are in the north east, which offers a more stable long-term future than the big cities in the south east.

Contact Obelisk International on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: www.obeliskinternational.com.
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Favourable Finance for Resale Real Estate in Brazil | Obelisk International News

Terms for preferential mortgages are now in place for resale Brazilian property. Similar to loans for the Minha Casa Minha Vida social housing programme, the favourable finance will allow thousands more Brazilians to have access to homes.

Minha Casa Minha Vida has been a highly successful means of reducing some of the deficit of real estate in Brazil. However, even the programme’s three million properties fall way short of fulfilling demand among middle class Brazilians to own a home.

To help alleviate this demand, Caixa Economica Federal – the government bank financing the Minha Casa Minha Vida scheme – has introduced preferential mortgages for middle class families. These mortgages come with no subsidies but they are based on the same eligibility criteria as the social housing programme and carry very favourable interest rates.

Qualifying Conditions

To qualify for preferential mortgages for a resale property, families must be resident in the locality where they are buying and their minimum monthly income must be R$465. The maximum income ceiling permitted is R$4,900 a month in metropolitan areas and cities with over 250,000 inhabitants.

100% finance is available up to a maximum property value of R$500,000 and interest rates for these new Brazilian mortgages range from 4.5% to 8.16%. The financing conditions are the same for all qualifying families with the only variable being the interest rates. These are based on a sliding scale – mortgages for properties valued between R$70,000 and R$80,000 attract the lowest 4.5% rate.

Boost for Resale Property

In Brazil, the social housing programme is aimed at low-income families buying new build properties. Since Minha Casa Minha Vida was introduced in 2009, resale Brazilian properties have been excluded from any government deals. Until now – this new Caixa scheme is aimed specifically at families purchasing resale homes.

Obelisk International believes that these preferential mortgages will be key in activating this sector of the Brazilian real estate market. Obelisk International CEO, Gary Hardacre is convinced that the new Caixa mortgage deals will open up the resale market to lower middle class Brazilians.

“This area of the market is currently under-exploited because of high mortgage interest rates,” Mr Hardacre explains, “and we expect to see a surge in resales to these families over the next few months”. Obelisk International also predicts a range of investment opportunities to emerge on the back of these favourable financing terms.

“These mortgages will create a ready-made exit strategy for resale Brazilian properties in many parts of the country,” says Mr Hardacre, “mirroring the exit strategy available for Minha Casa Minha Vida homes.” For Obelisk International, an on-tap market plus finance provided by Latin America’s largest public bank are fundamentals behind the success of real estate investment in Brazil.

Contact Obelisk International on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: www.obeliskinternational.com.
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Brazilian Investment Confidence Grows

Confidence in Brazilian investments continues to grow. Both Brazilian executives and foreign investors are bullish on the prospects for investment in Brazil.

Ernst & Young’s latest Capital Confidence Barometer for Brazil finds the majority of survey respondents optimistic about the immediate future for investments in Brazil. Published last month, the Barometer summarises survey replies from over 1,000 executives.

More Pluses Than Minuses

In the Perspectives section, the Barometer lists the reasons behind the current executive confidence in Brazil. As well as the fast-growing consumer market and strong Brazilian commodities market, the “continued euphoria over the discovery of vast new offshore oil and gas” leads the Barometer to believe the economy will continue to “sizzle”.

The huge growth of the middle classes is another boost to investor confidence in Brazil. Ernst & Young say that Brazil’s upper and middle classes will include 144 million people by 2014, a 20% increase on today’s figures. This marked increase in the middle class is a main driver behind the Brazilian real estate market, currently a major investment focus for foreign companies including Obelisk International.

Along with these fundamentals, investment in Brazil can also draw on the fact that Brazil’s public-sector debt has fallen by nearly half in the last ten years. Public deficit stands at a mere 1.5% of GDP – in developed economies, it’s nearer 9%. And Brazil is a creditor with bank reserves sitting at 11%, 3% more than the Basil I standards.

Brazil does, of course, present some minus points, although the largest worry for Brazilian executives – macro-financial stability – is the same concern facing all multi-nationals. The rise in consumer prices in Brazil represents an issue for some respondents to the Barometer as well as the sharp gains recently experienced by the real.

On balance, however, the Barometer reports that when it comes to investment in Brazil “the pluses far outweigh the minuses”. It concludes that confidence in Brazilian investments is high and notes that “investor caution regarding Brazil has declined sharply”.

For Obelisk International CEO Gary Hardacre, this reflects the growing maturity of Brazil as an investment market. “There has been a complete turnaround in investor perception of Brazil over the last few years,” Mr Hardacre said, “with investors now recognising the amazing opportunities in this solid investment destination.”

Bullish Prospects

Given the buoyant situation of their own economy, the Brazilian respondents to the Barometer are understandably more bullish about the financial crisis and the prospects of their companies. Only 10% of Brazilian executives believe the crisis still has a year or more to go and 77% are more optimistic about their companies’ prospects than they were six months ago.

Reflecting the solid reserves in the Brazilian banking system, the vast majority of Brazilian executives said credit and capital conditions have improved. 62% of them claim they have no need to refinance, considerably higher than the international average (49%).

All in all, the Barometer paints a brighter picture for the global economy and reports that “leading companies are now focused on growth again, not survival”. Obelisk International believes that emerging markets like Brazil will be at the forefront of this growth and continue to offer some of the world’s best investment opportunities.

Contact Obelisk International on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: www.obeliskinternational.com.
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Minha Casa Minha Vida Investment Adds Up in Rio Grande do Norte

Minha Casa Minha Vida has been described as the largest Brazilian real estate investment in decades. Figures just released for Rio Grande do Norte state explain why.

Rio Grande do Norte, situated in the corner of north east Brazil, serves as a good indicator of the government social housing programme, Minha Casa Minha Vida (MCMV). The state statistics for the first phase of the programme – job creation and benefits for the local economy – highlight the scale behind this massive investment in low-cost property.

Brazil is now into the second phase of MCMV and the government financier of the project, Caixa Economica Federal bank is releasing state results for the first phase. In Brazilian terms, Rio Grande do Norte with a population of 3.17 million is hardly large, but the first stage of MCMV in the state shows some impressive statistics.

Almost 15,000 Properties

According to Caixa, Rio Grande do Norte will benefit from 14,765 Minha Casa Minha Vida homes for Brazilian families earning between zero and three times the minimum salary. Obelisk International’s Minha Casa Minha Vida investments in north east Brazil – some 3,300 properties to date – are part of this figure.

Caixa’s regional director, Roberto Linhares said “the sky is the limit” for homes for families in the 3-10 times minimum wages bracket. This is because normal market conditions apply for these MCMV properties since developers sell them through normal marketing channels, although families still benefit from highly-favourable Caixa finance.

Big Local Benefits

As well as supplying housing for thousands of families who would otherwise be living in sub-standard accommodation, the Brazilian social housing programme has brought huge benefits to local communities. In its short history, MCMV has created thousands of jobs in Brazilian cities and provided a much-needed boost to countless local economies.

Rio Grande do Norte is a case in point. Brazilian real estate investment in MCMV has created 17,500 jobs in the state (the national total is 665,000), easily fulfilling one of MCMV’s secondary objectives, job creation. The programme has also injected R$1.4 billion into the state economy, benefitting thousands of locals directly as well as indirectly through secondary services.

Speaking to local real estate developers in Natal, the capital of Rio Grande do Norte, Mr Linhares stated that “Minha Casa Minha Vida is the biggest programme in Brazil in decades”. He said that in spite of the challenges that come with building 3 million homes, no one should underestimate what owning a home means to a poor family.

Obelisk International is well aware of the multiple benefits of MCMV for Brazilian society. “It’s interesting to see how this Brazilian investment opportunity provides excellent returns at investor level and is also hugely profitable for the local community,” says Gary Hardacre, CEO at Obelisk International.

Contact Obelisk International on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: www.obeliskinternational.com.
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Safe Haven for Brazilian Investment | Obelisk International

Foreign funds, particularly dollars, have been pouring into Brazil this year. The record influx indicates that investment in Brazil is seen as a safe haven for funds.

Brazilian investment ranked fifth in the world in 2010 for foreign direct investment (FDI). Amounts this year appear to be increasing on 2010. Flows of FDI into Brazil during the first six months of this year were the highest since 1947 when the Brazilian Central Bank records began.

Foreign investment in Brazil from January to June totalled US$32.5 billion, 67% of the total FDI in 2010. The business magazine Istoe Dinheiro attributes the rise in foreign funds to the forthcoming World Cup and Olympics plus big investment in Brazil’s oil and gas industries.

Investment Oasis

Against a background of global economic uncertainty, Brazilian investment is seen as an opportunity. Istoe Dinheiro calls Brazil “an oasis in the midst of the global drought”. Obelisk International shares this perception, particularly because Brazil represents such good investment potential across a wide range of options.

These options encompass equity, commodities, agriculture and real estate in Brazil offering timescales for every portfolio. Funds for short-term investments are attracted to Brazil because of the profits to be made on high interest rates. Long-term investments find appeal in Brazil’s expanding consumer market.

Brazilian investment is also perceived as a safe haven from doubts over US debt and the second Greek bail out. The buoyant Brazilian domestic market with its fast-growing middle classes is a magnet for consumer-orientated investment and Brazil’s strategic position in Latin America brings many other emerging markets such as Chile, Colombia and Peru within easy reach.

Brazilian Investment Abroad

Parallel to the huge influx of FDI into Brazil is Brazilian investment abroad, also experiencing record levels. Central Bank statistics reveal a massive increase this year – from January to July, Brazilians invested US10.53 billion outside Brazil, 91% of the 2010 total. Total Brazilian assets abroad are expected to reach US$300 billion by the end of this year.

Most Brazil investments outside Brazil are direct participation in foreign companies, followed by equity and porfolio investment. Perhaps surprisingly given the booming Brazilian property market is the size of real estate investment by Brazilians abroad. The largest group of foreign buyers of real estate in Miami are Brazilians who are buying 9% of property there.

For Gary Hardacre, CEO of Obelisk International, the latest FDI figures for Brazil are indicative of the country’s consolidation as an investment destination. “With current global insecurity, we at Obelisk International expect to see further investment in Brazil and other solid emerging markets,” he commented. Mr Hardacre also expressed his belief that bigger Brazilian investment abroad is a sign of increasing Brazilian wealth and of Brazil’s increasingly important international presence.

Contact Obelisk International on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: www.obeliskinternational.com.
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