Trading Stocks and Buying Bonds in Brazil
Posted March 5th, 2010 by adminA few days ago I have made a project at my university about high yield corporate bonds and found out that Brazil has the highest real interest rate in the world. Being curious I decided to research further into the Stock and Bonds Market in Brazil Market.
When I heard of Brazil before I often thought of a devaluate currency, a struggling economy and a weak financial market. After rating company Moody’s downgraded the Brazil to BB- in 1989 the consequences were disastrous. However in the last decade the situation has dramatically changed and today Brazil is Latin America’s strongest economy and is becoming one of the most influent economies in the world. The Brazilian currency Real is the most valuated against 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 buy, sell and rent stocks, fonds and derivatives while the BM&F trades lifestock futures. Both exchanges have been merged some months ago into BM&FBOVESPA.
The spectrum of investments is rich and very well and closely regulated by the CVM (Comissao de Valores Mobiliarios).
As a non-Brazilian investor I can basically make the same investments as a local investor, however I would have to appoint a local representative in Brazil to be the responsible for my accounting. As far as taxation is concerned foreign investors are exempted from tax unless they are resident in tax-free country.