Stock increase. They are issuing 2 new shares for every 10 shares held. Ex-div date was yesterday.Its in the SEC filings.
Also - Brazil's central bank will not extend forex intervention program.
However, the swaps program will remain in effect.
The foreign exchange program has provided investors with a daily supply of currency swaps, derivatives that offer protection against currency losses, since August 2013.
The bank has recently been offering $100 million worth of currency swaps in daily auctions Mondays through Fridays.
Cites increases in electric and gas prices and the weaker Real.
Rationing still an open question. Depends on which city you are referring to. Here's some good news:
"S&P Affirms Brazil Rating as Fiscal Measures to Boost Confidence"
FV right now is $1.21.
I read something in the Portuguese media about the PMDB (opposition party and affiliate of VP) wanting to condense the ministries from 39 to 22. If this is passed it would definitely send a signal to the international community that the govt is serious about cutting costs...
One more thing, nobody likes Dilma or her interventions in interest-rate policy decisions, electrical price setting, Petrobras mismanagement, etc.. Having said that, she is intelligent enough to know that an austerity package is exactly what is needed in these circumstances.
Jonas and Sisula:
Its pretty complicated. Dilma is doing the correct thing by trying to calm international investors by pushing a higher tax/cut spending austerity package through Congress. However, the president of the chamber (who is being indicted by the prosecutors working on the Petrobras corruption scandle) is blocking the measure - possibly in a move to pressure Dilma to call off the prosecution.
Meanwhile, large scale protests, comprised mostly of people who backed the centrist opposition party PSDB are protesting against the austerity measures, because they allegedly don't want to feed the corruption machine. This is very paradoxical because the PSDB normally supports tighter monetary policy while the PT (Dilma's party) typically supports more state intervention (not even close to communism) via price controls and welfare spending.
Though the protestors have a point, the timing couldn't be worse. The failure to move forward on the austerity package, along with lower GDP growth and fears of a country credit downgrade to junk is spooking international investors, fueling currency nosedive, and squeezing corporations and governments who have issued USD-denominated bonds. The currency plunge is fueling inflation. Meanwhile, the China slowdown is contributing to lower commodity demand, which is pushing down GDP. In other words, Brazil is experiencing stagflation. The entire BVSP and the USD/BRL are getting hit.
"With a communist president, a sort of private sector nationalization is always a possibility."
Oh, please, take take your political generalizations to the VALE or PBR board.
Unfortunately more patience is needed here. Once things start to look up (and they will as the lower currency spurs manufacturing and exports) this should move up quickly along with the rest of the $BVSP. In the short term, it is critical that Dilma/Levy get that austerity package through Congress.
IMO, this is the worst financial crisis since the Collor era in the early 1990s.
Inflation continuing to rise in lockstep with USD/BRL, investment grade rating for country in the balance, widespread protests, bitter congressional opposition to Dilma's sensible austerity packets, drought, PBR scandle, Chinese commodity demand slowing....
Having said that, there are some really outstanding values. I continue to hold GFA, ITUB, BBD, CIG, and small speculative positions in EBR and OIBR. I plan to add in the next few weeks.
$BVSP has been in a downtrend since 2010. IMO, capitulation is underway and may peak with an credit downgrade. Interesting times...
There are large scale protests in Brazil today. The economic austerity dispute remains unresolved. Brazil's investment grade rating hangs in the balance.
I should have set stops, but continue to hold my positions. It is good to know the fundamentals of companies you are holding in crises like this. I am very confident that CIG, GFA, ITUB and BBD are sound investments and at no risk of default. They all represent outstanding value in comparison to most US stocks.
EBR and OIBR are speculative plays, but I hold very small positions in both.
GLTA. Hold your hats. Currency and market plunges of this magnitude have a tendency to reverse violently with any glimmer of hope.
"How could Gafisa be so blind as to not "see" this Brazilian recession coming?"
Um. They did. That's part of the reason why they sold the Alphaville stake.
February inflation hit 7.7%, the highest level in 10 years and more than one point above the target range.
Actually political opposition to Dilma's backed austerity measures is underlying today's sell-off.
It is at or near time to place your long-term bets on Brazilian equities, IMO. Any company that simply survives this downswing without needing a major bailout represent an outstanding value at these prices.
Having said that, I just bought 1500 shares of EBR today and gambled on a very small stake of OIBR last week.
Larger current Brazilian holdings that I have a much higher level of confidence in include: GFA, CIG, ITUB, and BBD.
This has nothing to do with the spinoff. You guys need to start tracking currency and Brazilian political issues. The whole BVSP is getting whacked today.
Brazil's Rousseff races to contain Congress revolt over austerity