A few days ago I have made a project at my university about high yield corporate bonds and found out that the Brazilian economy has the highest real interest rate of the world. Being curious I decided to research further into the Stock and Bonds Market in Brazil Exchanges.
When I heard about Brazil in the past I often thought of a devaluate currency, and a weak financial market. After rating agency Moody’s downgraded the Brazilian economy to BB- in 1989 the consequences were disastrous. But in the last ten years things have dramatically changed and nowadays Brazil is the continent’s most stable economy and on its way to become one of the most influent economies in the world. The Brazilian currency Real is the strongest currency compared to the dollar for three consecutive years and the Brazilian Stock Market rallied in 2009 almost 90%.
On the most important 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 a few months ago into BM&FBOVESPA.
The spectrum of invest vehicles is multifaceted 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 local representative in Brazil to be the responsible for my investments. As far as taxation is concerned foreign investors are tax-exempted unless they are resident in an offshore jurisdiction.
