Wednesday, November 4, 2009

October Inflow of Capital Into Brazil Is Highest Since 2007

The October inflow of capital in Brazil was U.S. $14.598B, according to data released on Wednesday by the country's Central Bank (BC). The value is the highest since June 2007, when Brazil received U.S. $ 16.561B and quite different from October 2008 amid the financial crisis, when the country had lost $ 4.639B.

We track all latin-american ADRs here. This is the performance of the Brazilian ADRs YTD (please click to enlarge):

The top performer is Gafisa (GFA), a big builder! YTD :234%.

According to BC, the flow last month has led easily by the financial sector, which adds the transfer of funds used purchase stocks and bonds and also productive investments, among other operations.

In the commercial segment, October ended with net inflow of U.S. $ 1.492B, a figure generated by exports of U.S. $ 14.304B and imports of U.S. $ 12.812B.

For the year until October 30, the flow rate is the net inflow of U.S. $ 22.856B. This period, the financial segment had net inflow of U.S. $ 13.255B and the trade account contributed U.S. $ 9.600 billion. In the same period of 2008, the flow rate recorded a positive balance of U.S. $ 12.549B.

The Central Bank pointed out that the entry of American currency in the country fell dramatically after the tax with the new 2% Tax on Financial Operations (IOF). The observed inflow of dollars after tax, however, is still 5.9% higher than that observed in September ($218M) and 199% higher than the average for August ($77M).

Until the 19th, the IOF was not yet charged and there was a significant transfer of dollars to purchase shares of the Brazilian subsidiary of Santander who offered shares of its IPO at the Stock Exchange of Sao Paulo.

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