A few days ago I have made a project at my university about high yield corporate bonds and discovered that the Brazilian economy has the highest real interest rate of the world. Being curious I decided to look further into the Brazilian Stocks and Bonds Exchanges.
When I heard about Brazil in the past I always thought of high inflation, an economy in recession and an instable financial market. After rating agency Moody’s downgraded the Brazilian economy to BB- in 1989 the consequences were disastrous. However in the last ten years things have dramatically changed and nowadays Brazil is the continent’s most important economy and on its way to become one of the most influent economies in the world. The Brazilian currency Real is the strongest currency compared to the dollar for three years in a row and the Brazilian Stock Market rallied in 2009 almost 90%.
On the most important Brazilian Stock Exchange Bovespa investors can trade stocks, fonds and derivatives while the BM&F trades interest futures. The exchanges have been merged recently into BM&FBOVESPA.
The spectrum of investments is multifaceted and very well and closely regulated by the CVM (Comissao de Valores Mobiliarios).
As a non-Brazilian investor I can basically do the same investments as a local investor, however I would have to appoint a Brazilian representative to be the responsible for my investments. As far as taxes are concerned foreign investors are exempted from tax unless they are resident in a tax haven.
Tags: General