Central Bank

24.03.16 / News / Author: Martin

The exchange rate appreciation of the real it seems that it will not stop at the point of taking the Central Bank of Brazil to announce during the day of yesterday to buy dollars in the market of changes in view, within the framework of its efforts to absorb the strong flow of U.S. currency in the local plaza, as it gave Reuters account. The Central Bank’s intention is not depreciated exchange rate but slow their pace of appreciation. The Central Bank of Brazil has been purchased since May 8, near $7 billion market in sight. Although it has already begun a slow recovery, the weakness that still observes the economy of Brazil, together with compensatory measures, they enable the Central Bank performing this operation that could put at risk the inflation target which has arisen as a goal. While the Brazilian currency has appreciated, it is still far from its peak reached on August 1, 2008 when the US dollar is exchanged at 1,5562 reais. The exchange rate of the dollar in Brazil is currently at R $ 1,885, suggesting that there is margin to win in the Brazilian stock market for itself with the exchange rate appreciation.

ES expect that while the Central Bank of Brazil can do this, continue intervening in the currency market given the negative effect of the strong appreciation of its currency is implying for industry, in moments that still has not been put behind the crisis. In the Brazilian stock market, while the general index comes to accumulate an important upward trajectory, is still quite far from their highs of 2008. To reach the maximum level achieved, the Brazilian stock market general index would still increase by 38%. The reasons to keep the Brazilian stock exchange rising in what is left of the year relies not only in the good prospects of the economy but in the attractiveness that it are making their listed companies and others who wish to enter. When yesterday spoke them about the discovery of signs of oil and gas in the Brazilian coast by Repsol (IBEX:REP; NYSE: REP)), which possessed a 40% stake in the exploration of the Vampira well located in the Santos basin, didn’t mention them that Petrobras (BVSP:PETR3;NYSE:PBR)) has a 35% stake in it, so the discovery also benefits this Brazilian company. Recently, I have been assiduously appointing Santander (IBEX35:san;NYSE:STD). It is that Santander has endeavoured to be news.

This time, CEO of Banco Santander, Alfredo Saenz, has announced to analysts that the entity plans to put 15% of its Brazilian subsidiary in bag through a capital increase. According to Saenz: Is expected to drop by 15%. They will be new shares. This will increase operations in the Brazilian stock market and will add a new seasoning. These and other companies (such as those in the banking sector as many times I have mentioned), are responsible for attracting the eyes of investors towards the Brazilian stock market, and this is why I make a vote of confidence so that it continues to grow in the rest of the year. Horacio Pozzo assured Brazil investment recommendation expected to grow at 4% in the next twelve months. Its stock market has advanced economy times and grew by 63% in dollars, in clear reflection of these expectations.