The Brazilian Development Bank (BNDES) offers around R$100 billion ($20 billion), that can be used to support the private sector. This cash list shows, that there is room for stronger action by public banks (BNDES, Caixa and Banco do Brasil) in credit. The BNDES money was reformed in February, with the sale of Petrobras’ common shares, in which the bank pocketed R$22 billion ($4 billion).
The Brazilian market recover partially from the impact of the collapse of oil prices and the outbreak of covid-19. The Ibovespa, the main index of the Brazilian stock exchange, closed up 7.14%, at 92,214.47 points, the highest daily appreciation since 2009. With that, it partially recovered from the historical fall of more than 12% registered on Monday.
Brazilian industrial production raised 0.9% in January, in comparison with December, reported the Brazilian Institute of Geography and Statistics (IBGE). The result interrupts two months of decline in the sector, a period in which the accumulated loss reached 2.4%. It was the best January since 2017, when it stood at 1.1%, and the strongest monthly advance since October 2019, when it also rose 0.9%.
The largest car rental company and fleet manager in Brazil, had profit growth in the fourth quarter, Localiza announced that it had consolidated net profit of R$228.4 million ($45.8 million) from October to December, an increase of 25.9% compared to the same period in 2018. The company’s operating result measured by Ebitda totalled R$629.6 million ($126 million), an increase of 40.2% year on year.
Mining company Anglo American signed a contract with Atlas Renewable Energy to buy 70MW of solar energy, as it aims to acquire 100% of its electricity from renewable sources by 2022. According to Anglo American, Atlas invested R$881 million ($176 million) in a solar plant to achieve the contract, which will have more than 800,000 panels and an installed capacity of 330 MWp.
Faced with the collapse of the Brazilian stock market and the surge in the dollar exchange rate, the Credit Default Swap registered the biggest increase in 12 years. At the close of business on Monday, the increase in CDS was 30.28%, advancing to 186 points.
Brazilian soybean grain exports reached a daily average of 489.1 thousand tons in the first five days of March, up 72.1% from the average of 284.2 thousand tons registered in February, amid climatic conditions more favourable for shipments. The volume shipped this month also represents an increase of 9.86% compared to the daily average of March 2019. Despite the outbreak of the new coronavirus, mainly in China, the pace of grain export has not yet been affected.
The Brazilian Central Bank sold another $465 million on Monday, after earlier placing $3 billion spot in just one auction, in the face of extreme volatility in the markets because of oil and coronavirus. The sales in the spot market mark a change in the intervention strategy of the monetary authority, which until then had only been offering traditional foreign exchange swap contracts – which inject dollars into the future market. Last week, the Central Bank sold $ 5 billion of these assets.
On a panic day in the global financial market, the dollar approached R$4.80, even with the Brazilian Central Bank selling the currency of international reserves. The Brazilian stock exchange, B3, fell 12%, reaching business interrupted during the morning, the so-called circuit breaker. The Ibovespa index closed the day with a decline of 12.17%, at 86,067 points, returning to the levels of December 2018.
Caixa Econômica Federal issued a statement stating that it will guarantee better credit conditions to help the country to overcome the current economic uncertainty due to the impact of the coronavirus and the oil turbulence in the markets. The statement said that the bank will guarantee the best conditions for personal and housing credit, financing for infrastructure, working capital for the construction sector and micro companies.