Trading Stocks and Buying Bonds in Brazil
Tuesday, March 9th, 2010 | Always Online
I recently made a project at my university regarding high yield bonds and found out that Brazil has the highest real interest rate of the world. Being curious I decided to look further into the Brazilian Stocks and Bonds Exchanges.
When I heard about Brazil in the past I often thought of high inflation, and an instable financial market. After rating agency Moody’s downgraded the Brazil to BB- in 1989 the consequences were far-reaching. However in the last ten years things have dramatically changed and nowadays Brazil is the continent’s strongest economy and on its way to become one of the most important economies in the world. The Brazilian currency Real is the strongest currency against the dollar for three years in a row and the Brazilian Stock Market rallied in 2009 almost 90%.
On the most important Brazilian Stock Exchange Bovespa investors can trade stocks, fonds and derivatives while the BM&F trades currency futures. The exchanges have been merged some months ago into BM&FBOVESPA.
The spectrum of investment products is broad and very well and closely regulated by the CVM (Comissao de Valores Mobiliarios).
As an investor from oversea I can basically buy or sell the same investments as a local investor, however I must appoint a Brazilian representative to be the responsible for my investments. As far as taxes are concerned foreign investors are tax-exempted unless they are living in an offshore jurisdiction.