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Brazil has embarked on a trend of lower interest rates, creating an expectation that improved credit conditions will bolster domestic demand for homes. Last week the central bank cut the benchmark rate to 10.5 percent, commenting that future easing is likely to bring the rate below 10 percent.
The rate decreases come as Brazil's government makes other moves to expand credit to consumers. In early January, the government created a new line of credit to finance home improvements. Under the new scheme, 10-year loans will be extended at a rate of 12 percent, well below prevailing bank rates of 25-45 percent. The new policy is consistent with the government's broader efforts to stimulate credit expansion through all economic levels.
Yet another company has announce plans to build a steel mill in Pecém. Grupo Añon of Spain plans to spend R$1 billion to construct a new facility, due for completion by 2014. The new mill will be located adjacent to the Companhia Siderúrgica do Pecém (CSP). Grupo Añon is the latest major entrant into the Pecém industrial zone, joining Brazil's Vale, Korea's Dongkuk and POSCO, and Japan's PFE Steel.
Brazil's federal government has committed R$2.16 billion to improve Ceará's transportation infrastructure under the Growth Acceleration Program (PAC2). The initiative has identified 18 unique projects, including R$1.62 billion to be invested in Ceará's highways before the 2014 World Cup. The windfall of spending will result in improved access throughout the state, providing a strong stimulus to the local economy and a boost to property values.
In addition to the road improvements, investments include expansion and renovation of the Pinto Martins International Airport in Fortaleza and several projects related to the ongoing port expansion at Pecém.
As part of the general overhaul of the coastal areas of Fortaleza prior to the World Cup, R$80 million has been pledged toward improvements at Praia do Futuro. Broadly speaking, the government's Fortaleza investments are intended to prepare the city for the coming influx of tourists in 2014.
The Praia do Futuro investment is part of a broader effort to extensively renovate Fortaleza's coastline. The city is dedicating over R$200 million toward improvements of its main tourist areas during the next year and a half. This includes extensive interventions along 20 km of the waterfront.
Portos e Navios reports today that Pecém, Sao Gonçalo and Caucaia are due to see a large-scale population increase due to ongoing development of the port and industrial zone. In Pecém and Sao Gonçalo, the current population of 15,000 is expected to grow to 140,000 within ten years.
One major contributor to growth is the steel plant under construction by Companhia Siderúrgica do Pecém (CSP), which is expected to generate 37,000 jobs. Petrobras's Premium II refinery will bring an estimated 90,000 direct and indirect jobs. The process of creating adequate housing and infrastructure will create heavy demands on local governments, and unique opportunities for investors and developers.
One more wind power company is coming to Pecém:
The industrial unit should begin operating by the end of 2012, and will include the assembly of nacelles. It will be located in the industrial complex at the Port of Pecém, a hub of wind power activity.
Fuhrländer joins a wave of manufacturers that are setting up units to compete in Brazil’s hot wind-power market. With about 2GW being contracted every year, just 1GW in operation today, and an estimated 300GW in onshore capacity, the surface has barely been scratched.
In Ceará, the state government is embarking on a new broadband initiative, Cinturão Digital do Ceará (Ceará's Digital Big Belt, or CDC). With an investment of R$50 million, the CDC will be Brazil's largest public broadband network, reaching over 90% of Ceará's population.
From November 1-6, Cumbuco will be hosting Superkite 2011, Brazil's largest annual kitesurfing competition. Superkite 2011 will bring some of the world's best kitesurfers to contest in events including Freestyle, Race, and wave riding.
Superkite will feature several days of exciting competition in a beautiful setting. The Freestyle event, starting Thursday in front of Duro Beach, will be an especially popular attraction. Continue reading for the full agenda.
Today a European deal was reached to contain the debt crisis, involving a writedown of Greek debt and a recapitalization of European banks. While financial markets have reacted enthusiastically, many experts wonder whether the solution is comprehensive enough to avoid future problems.
In the Financial Times blog, Joe Leahy says that ongoing troubles in Europe could impact Brazil through reduced capital inflows and trade. However, Leahy argues that Brazil is well-positioned to ride out fluctuations in the global economy:
O Complexo Industrial e Portuário do Pecém (Cipp) receberá, a partir do próximo semestre, o início das obras daquela que será sua nona indústria. Com um investimento orçado em R$ 97 milhões, o Grupo Eternit - líder de mercado nos segmentos de coberturas, painéis e placas de cimento - começará a construção de sua 12ª fábrica, através de uma joint-venture constituída com a multinacional colombiana Corona, que é uma das maiores produtoras mundiais de louças sanitárias. A expectativa é que o investimento fortaleça o setor de materiais de construção civil no Estado.
Eternit Group, a leading producer of roof panels and floor slabs, is partnering with Colombian multinational Organizacoes Corona S. A. (Corona) to open a new factory at the Pecém industrial complex. A new company will be formed, Companhia Sulamericana de Ceramica S. A., with an expected investment of R$97 million.
The new company will initially focus on sanitary wares, but will expand to deliver a range of construction products. The new venture represents the 9th large corporation to initiate major new investment at the expanding port complex.
According to the State Board of Economic Development, six other companies have already signed memoranda of understanding to set up operations at the Port and Industrial Complex of Pecém (CIPP).
The Brazilian Central Bank is expected to lower interest rates by .5% at their meeting Wednesday, an action which will leave the SELIC rate at 11.5%. The rate cut is likely due to perceptions of a cooling global economy. The move would be the second consecutive drop in rates, following a half point cut in August.
A rate cut will likely boost the value of Brazilian bank and real estate stocks:
A new marine passenger terminal is scheduled to be built in Fortaleza, with an investment of over R$100 million. The new terminal will start construction next year, with completion expected in 2013. While the terminal is designed to service cruise ship traffic, it will accommodate cargo vessels as well. Last year Fortaleza received 43 cruise ships. The number is expected to jump to 150 with completion of the new terminal.
In Ceará, Brazil's government has committed to improve access to water through its Cinturão das Águas (Water Belt) program. With a total expected investment of R$7 billion, the Water Belt program looks to extend water supply to 92% of the population through a series of canals and pipelines.
It was today reported in the Diário do Nordeste;
Cerca de 270 mil pessoas devem visitar a 57ª edição da Exposição Agropecuária e Industrial do Ceará (Expoece).... o Parque de Exposições Governador César Cals, da Secretaria de Desenvolvimento Agrário (SDA), na Capital. Além disso, são esperados negócios que devem somar cerca de R$ 12 milhões, entre compra de matrizes, equipamentos e financiamentos por linhas de créditos.
Visit MDMY Investment at the 57ª Exposição Agropecuária e Industrial (Agricultural and Industrial Exposition) do Ceará – EXPOECE 2011, occurring October 2-9 at the Parque de Exposições Governador Cesar Cals in Fortaleza.
According to the World Tourism Organization, Brazil has seen 18.8% increase in tourism during the past year, the largest increase in South America:
CEO of Asset Management at HSBC Brazil, Pedro Bastos describes Brazil as a save haven in a difficult global economic climate:
The Brazilian market is a natural hedge for inflation on a global basis because of the heavy weight of commodity producers on equity itself. But again, Brazil is one of the few countries that offer a very appealing proposition of strong domestic consumption, infrastructure development, and also convergence of interest rates and commodities. So all four drivers playing at the same time.
At National Real Estate Investor, David Lynn reports on the fundamentals underlying the Brazilian real estate market. While overall economic growth is moderating, Lynn says, "Brazil exhibits positive fundamentals for short- and long-term real estate performance."
Brazil was already rich in natural resources before the discovery of vast deep water oil reserves located off the southern coast. The Tupi oil field is the western hemisphere's largest new find in the past 30 years. The oil lies under approximately two miles of water, and a further three miles of salt, sand, and rock.
Bloomberg has an interview with billionaire investor Sam Zell. He discusses his views on the US economy, and opportunities in emerging markets, including Brazil:
This is a country with enormous natural resources. It is self-sufficient in food, oil, water... these are enormously beneficial scenarios.
For international investors considering Brazilian property, an evaluation of the mortgage lending environment can provide clues as to the health and direction of the Brazil real estate market. Currently, foreigners are unable to receive mortgage loans in Brazil. At the same time, the mortgage market in Brazil is very young, with considerable room for future growth.
Salão Imobiliário Ceará is occuring this weekend at the Centro de Convenções in Fortaleza. This is the largest annual property event in Fortaleza, bringing together the biggest regional constructors and developers.
MDMY Investment S/A
1106 Business Tower
1200 Av. Dom Luis,
Aldeota, Fortaleza.
Ceará, CEP 61.160-230
Phone : +55 85 3181 0271
E-Mail : office@mdmy.com.br
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