11/19/2007 14h34

Foreigners quadruplicate resources

Gazeta Mercantil - 11/19/2007

The inflow of foreign resources in the capital market, which had diminished in September, due to American real estate crisis, has resumed its growth in October, increasing the stock of investments in the Country, which started timidly less than two decades ago, to US$ 54.34 billion, a historical record. The profits accrued in the investment of such resources led the stock to be multiplied by four, with the portfolio of investments from foreigner investors reaching the figure of US$ 218.10 billion at the end of October, as shown by the research of the Brazilian Securities and Exchange Commission (CVM). Part of the leap between the volume brought into the Country and the value of the foreign investment portfolio has come from the foreign exchange profit, due to the depreciation of the dollar in the international market, also in comparison with the Real. The main part of the valuation, however, has come from the stocks, assets in which 77.5% of the portfolio was invested. Since 1991, foreigners have had profitability investing in Brazil, but after 2004 the profit potential has exceeded the expectations from some years ago.  As a result, the capital market has recently started to draw a new profile of investors, in addition to the resources from regions that did not invest in the Country. In the new profile of investors, investors such as international investment banks and American brokers started to appear, bringing individual investors to invest in Brazil. If the yield of the investments continues at the current levels in the international market - the American basic interest rate is at 4.50% a year - the investors will continue looking at Brazil, among the other emerging countries, with greater care, for it has competitive advantages. Among them, with the proximity of the "investment grade" (which historically leverages the economies at issue) Brazil has the perspective of new foreign exchange earnings and the regulation of the markets with the increase of corporative governance practices. The "investment grade" is expected to be awarded between the second half of 2008 and first quarter of 2009.