Brazil Rating Raised to Investment Grade by Moody's (Update3)
2009-09-22 21:42:09.184 GMT
(Adds Mantega in eighth, ninth paragraphs.)
By Helder Marinho and Catarina Saraiva
Sept. 22 (Bloomberg) -- Brazil's credit rating was raised
to investment grade by Moody's Investors Service after Latin
America's largest economy built record foreign reserves and
averted a prolonged recession amid the global financial crisis.
Moody's cited Brazil's "strong economic and financial
resilience" during the worldwide slowdown as it raised the
rating one level to Baa3, the lowest investment grade. The
upgrade came a year after Standard & Poor's and Fitch Ratings
increased their ratings for Brazil above junk. Moody's assigned
a positive outlook, signaling it may lift the rating again.
Brazil's Bovespa stock index rose to a 14-month high and
the currency jumped the most in a month. The country's foreign
reserves climbed to $223 billion from a low during the crisis of
$199 billion on Feb. 26 as prices for its commodity exports
rebounded and investors poured money into the stock and bond
markets, encouraged by President Luiz Inacio Lula da Silva's
stimulus measures. Reserves were $74 billion three years ago.
"The world is pulling out of the crisis and the country
came through it displaying a strong resilience," said Roberto
Padovani, chief strategist at Banco WestLB do Brasil in Sao
Paulo. The upgrade "consolidates a scenario of low risk for
Brazil and it comes at a very important moment," he said.
Real Gains
Brazil's currency is up 29 percent against the dollar this
year, the second-best performance among the 16 major currencies
after the South African rand. Gross domestic product will shrink
0.4 percent this year, compared with a 7 percent contraction in
Mexico, according to the median forecasts in Bloomberg economist
surveys.
Brazil's ability to pull through the global financial
crisis "points to a material improvement in Brazil's sovereign
credit profile," Mauro Leos, Moody's regional credit officer
for Latin America, said in a statement.
Moody's "was waiting to see how Brazil was going to come
out from this crisis, whether the crisis was going to be more
profound and in the end it wasn't," said Pablo Goldberg, head
of Latin American fixed-income strategy at HSBC Securities in
New York. "The data shows that Brazil has turned the corner."
Finance Minister Guido Mantega, speaking to reporters
outside of the Moody's office in New York today, said it was
"much more significant" that the rating company took the
action one year after credit markets seized up than if it had
upgraded while the global economy was growing.
The decision "is a recognition of the efficiency with
which" Brazil's economy is being managed, Mantega said. With
three investment grade ratings, Brazil will be able to attract
more pension fund money to its bond market, he said.
Brazil is the second country in South America after Chile
to have an investment grade rating from Moody's.
Stocks Rebound
The benchmark Bovespa stock index has advanced 64 percent
this year, reversing last year's record 41 percent tumble, as
the central bank cut the benchmark lending rate to a record low
of 8.75 percent to shore up the economy.
The extra yield investors demand to own Brazil's dollar-
denominated bonds instead of U.S. Treasuries has narrowed to
2.20 percentage points from 4.65 percentage points on Jan. 15,
according to JPMorgan Chase Co.
The Bovespa index gained 0.9 percent today to 61,484.89,
the highest since July 2008. The real climbed as much as 1.9
percent to 1.791 per dollar, the strongest in a year. Brazilian
bond yields slid for the first time in six days.
--With assistance from Fabiola Moura in New York. Editors: David
Papadopoulos, Laura Zelenko
For Related News and Information:
Top Stories:TOP<GO>
Top Latin America stories: TOPL<GO>
Top emerging-market stories: <TOP EM<GO>}
To contact the reporter on this story:
Catarina Saraiva in New York at +1-212-617-2300 or
asaraiva5@bloomberg.net.
To contact the editor responsible for this story:
David Papadopoulos at +1-212-617-5105 or
papadopoulos@bloomberg.net
2009-09-22 21:42:09.184 GMT
(Adds Mantega in eighth, ninth paragraphs.)
By Helder Marinho and Catarina Saraiva
Sept. 22 (Bloomberg) -- Brazil's credit rating was raised
to investment grade by Moody's Investors Service after Latin
America's largest economy built record foreign reserves and
averted a prolonged recession amid the global financial crisis.
Moody's cited Brazil's "strong economic and financial
resilience" during the worldwide slowdown as it raised the
rating one level to Baa3, the lowest investment grade. The
upgrade came a year after Standard & Poor's and Fitch Ratings
increased their ratings for Brazil above junk. Moody's assigned
a positive outlook, signaling it may lift the rating again.
Brazil's Bovespa stock index rose to a 14-month high and
the currency jumped the most in a month. The country's foreign
reserves climbed to $223 billion from a low during the crisis of
$199 billion on Feb. 26 as prices for its commodity exports
rebounded and investors poured money into the stock and bond
markets, encouraged by President Luiz Inacio Lula da Silva's
stimulus measures. Reserves were $74 billion three years ago.
"The world is pulling out of the crisis and the country
came through it displaying a strong resilience," said Roberto
Padovani, chief strategist at Banco WestLB do Brasil in Sao
Paulo. The upgrade "consolidates a scenario of low risk for
Brazil and it comes at a very important moment," he said.
Real Gains
Brazil's currency is up 29 percent against the dollar this
year, the second-best performance among the 16 major currencies
after the South African rand. Gross domestic product will shrink
0.4 percent this year, compared with a 7 percent contraction in
Mexico, according to the median forecasts in Bloomberg economist
surveys.
Brazil's ability to pull through the global financial
crisis "points to a material improvement in Brazil's sovereign
credit profile," Mauro Leos, Moody's regional credit officer
for Latin America, said in a statement.
Moody's "was waiting to see how Brazil was going to come
out from this crisis, whether the crisis was going to be more
profound and in the end it wasn't," said Pablo Goldberg, head
of Latin American fixed-income strategy at HSBC Securities in
New York. "The data shows that Brazil has turned the corner."
Finance Minister Guido Mantega, speaking to reporters
outside of the Moody's office in New York today, said it was
"much more significant" that the rating company took the
action one year after credit markets seized up than if it had
upgraded while the global economy was growing.
The decision "is a recognition of the efficiency with
which" Brazil's economy is being managed, Mantega said. With
three investment grade ratings, Brazil will be able to attract
more pension fund money to its bond market, he said.
Brazil is the second country in South America after Chile
to have an investment grade rating from Moody's.
Stocks Rebound
The benchmark Bovespa stock index has advanced 64 percent
this year, reversing last year's record 41 percent tumble, as
the central bank cut the benchmark lending rate to a record low
of 8.75 percent to shore up the economy.
The extra yield investors demand to own Brazil's dollar-
denominated bonds instead of U.S. Treasuries has narrowed to
2.20 percentage points from 4.65 percentage points on Jan. 15,
according to JPMorgan Chase Co.
The Bovespa index gained 0.9 percent today to 61,484.89,
the highest since July 2008. The real climbed as much as 1.9
percent to 1.791 per dollar, the strongest in a year. Brazilian
bond yields slid for the first time in six days.
--With assistance from Fabiola Moura in New York. Editors: David
Papadopoulos, Laura Zelenko
For Related News and Information:
Top Stories:TOP<GO>
Top Latin America stories: TOPL<GO>
Top emerging-market stories: <TOP EM<GO>}
To contact the reporter on this story:
Catarina Saraiva in New York at +1-212-617-2300 or
asaraiva5@bloomberg.net.
To contact the editor responsible for this story:
David Papadopoulos at +1-212-617-5105 or
papadopoulos@bloomberg.net
Nenhum comentário:
Postar um comentário