Trading Stocks and Buying Bonds in Brazil
Last week I have made a research regarding high yield bonds and discovered that Brazil has the highest real interest rate of the world. Being curious I decided to research further into the Stock and Bonds Market in Brazil Market.
When I learned about Brazil in the past I often thought of high inflation, and a weak financial environment. After rating company Moody’s downgraded the Brazilian economy to BB- in 1989 the consequences were far-reaching. However in the last ten years the situation has dramatically changed and nowadays Brazil is the continent’s most important economy and on its way to become one of the most important economies in the world. The Brazilian currency Real is the strongest currency against the dollar for three consecutive years and the Brazilian Stock Market rallied in 2009 almost 90%.
On the biggest Brazilian Stock Exchange Bovespa investors can buy, sell and rent stocks, fonds and derivatives while the BM&F trades lifestock futures. The exchanges have been merged some months ago into BM&FBOVESPA.
The spectrum of investment products is rich and very well and closely regulated by the CVM (Comissao de Valores Mobiliarios).
As a non-Brazilian investor I can basically apply the same investments as a local investor, however I must appoint a Brazilian representative to be the responsible for my investments. As far as taxes are concerned foreign investors are tax-exempted unless they are living in an offshore jurisdiction.
