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.
Follow us on Twitter, Facebook and LinkedIn.
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.
Follow us on Twitter, Facebook and LinkedIn.
Labels: Brazil, Brazil property investment, Brazilian real estate, investing in Brazil, investment in Brazil, investments, Obelisk International, property investment
posted by Alison Kane at 5:20 pm
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