Brazilian asset managers have had relative success in managing market risk and preserving fund liquidity within their strategies, despite the impact of Coronavirus pandemic. In terms of investment flows, the Brazilian asset management industry experienced aggregate outflows of BRL31 billion ($5.9 billion) during March 2020, representing 0.6% of total asset under management, according to Anbima figures.
MercadoLibre’s financial services arm, Mercado Pago, is extending a 600 million-real ($114 million) credit line to help Brazilian medium and small businesses face the sharp drop in economic activity caused by the new coronavirus crisis.
Brazilian airline Azul SA has hired restructuring firm Galeazzi & Associados to renegotiate its financial and suppliers’ debt, Brazilian newspaper O Estado de S. Paulo reported on Wednesday. Azul expects to renegotiate around 15 billion reais ($2.9 billion) but not within an in-court reorganization, the newspaper reported.
Brazil’s government is on course to post a primary budget deficit this year of 600 billion reais ($116 billion), almost 8% of gross domestic product, due to the emergency spending and fall in revenues triggered by the coronavirus crisis, Treasury Secretary Mansueto Almeida said.
Brazil is expected to harvest 120 million tons of soy during the 2019/2020 season, according to the Mato Gross State Soy and Maize Producers Association ( Aprosoja ). The association pulls together data from technicians and farmers in 16 different states of Brazil. This year should see soy exports go up 4 million tons from 2019 to 77 million tons.
Brazil’s government proposed the direct transfer of 40 billion reais ($7.7 billion) to states and municipalities to help compensate them for the loss of revenue due to the coronavirus crisis, a counter proposal to an 80 billion reais aid package approved by the lower house of Congress last Monday.
Brazil’s second largest private lender Banco Bradesco SA said it is likely to borrow money from the country’s central bank using its credit portfolio as collateral this month, vice-president Cassiano Scarpelli said. Earlier in April, the country’s Monetary Council authorized the central bank to lend directly to banks using credit portfolios as collateral, in a move that would allow banks in Brazil to issue 650 billion reais ($125.77 billion) in new loans.
Brazil will launch a 10 billion-real ($1.9 billion) program to support micro businesses with good credit history but whose finances have been hit hard by the economic impact of the coronavirus pandemic, two Economy Ministry sources told Reuters. The scheme, to be unveiled this week, will be targeted at firms with annual revenue of up to 360,000 reais and will be operated via state-owned lender Caixa Economica Federal.
Brazil’s economy will shrink this year by 5.0% due to the direct and indirect economic impact of the coronavirus pandemic, according to The World Bank, which would mark the country’s biggest crash in at least half a century. In its semi-annual report for the region “The Economy In The Time Of Covid-19” published on Sunday, The World Bank said Brazil faces three major shocks: weak global demand, low oil prices, and the economic disruption from domestic virus-containment measures.
The results of recent stress tests carried out by Brazil’s Central Bank on small and medium-sized enterprises were “not very good”, Central Bank president Roberto Campos Neto said, adding that some sectors will need support.