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Why Stock Market Experts Bank on Brazil

30 July 2007 - Features - Editor

Though the media may be too enamored of India and China to take notice, it is Brazil which has begun to attract most stock market attention of late. The population of almost 200 million and abundant natural resources has always been top drawer stock market attractions for this large slice of South America. Inflation and leanings away from free enterprise have been traditional bug bears, but the current realm of governance has cleverly steered away from these choppy waters.

Inflation in Brazil is no more than 3% though the interest rate still tops 4 times that rate. Small wonder that investors from all over the world have begun to take active interest in the local stock market. The country’s development is broad based and inclusive, and you cannot hope for a better recipe for political stability.

The strong Spanish bias in this former colony of Portugal may be surprising for new stock market entrants, but it is an undeniable fact. Spain is now Brazil’s biggest trading partner after the United States and the country may even make Spanish a second official language. Investors from other countries need to move quickly if they wish to take strong positions of influence on the local stock market.

Brazil has an export surplus as a country, but domestic demand is very significant as well. Stock market investors enjoy dual highways to growth and profits, as a result. The medium term economic prospects are rated by experts to be very good, which is largely due to a slew of enabling government policies. Though key politicians in power now have some left of center roots, they have framed conditions which favor free enterprise, and encourage global participation in Brazil’s future.

Tourism and alternate forms of energy are some of the most interesting segments of the local stock market, apart from conventional international favorites such as tele-communications and financial services. Investors have a broad array of securities from which to build engaging portfolios, and the infrastructure for new listings is most encouraging as well.

It does not matter where you may be based, but the time has come for the whole world to take notice of Brazil. Are you poised to take a share of this success story?

 


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