When you hear the word ‘Brazil’, the first things that come to mind are usually blue skies, white sand and exotic food. But investment opportunity? Not so much. However, according to the latest data compiled by the Post Office, the British Pound has risen by more than 42 percent against the Brazilian Real over the last 12 months – which could make it something worth considering.
The Real has been having a hard time of late, tumbling 31 percent this year alone. Carlos A. Primo Braga, a professor of international political economy at Switzerland’s IMD Business School, explained to CNBC that the Real “has experienced one of the most dramatic depreciations among currencies from emerging economies over the last 12 months”. However, for anyone looking to buy internationally, this could provide the perfect opportunity to buy property at a great price.
According to leading developer Ritz-G5, who operate in the North East region of Brazil, there has definitely been an increase in interest from overseas investors looking to make the most of the current exchange rate advantage.
Ritz-G5’s CEO, Luiz Fernandes, says now is the right time to make a move: “we strongly believe that now is a great time to invest in Brazilian property due to both lower property prices and considerably undervalued Brazilian real.’
“There is significant interest in Brazil coming from overseas investors. In particular, over the last 11 years, foreign direct investment (FDI) figures showed a dramatic surge amounting to a 516% increase in the period from 2003 to 2014, with FDI amounting to 62.4 billion USD in 2014.
“With Brazil’s large housing deficit still very much present, there remains plenty of scope for further growth in the property sector over the coming years.”
For the price, Ritz-G5’s developments certainly look more attractive than anything in the UK. One development is inspired by the Atlantic Ocean, Costa Azul or ‘Blue Coast’, and is a new luxurious 168-apartment development in Petrópolis, one of the most exciting districts in Natal, and close to some of Brazil’s best beaches for soaking up the South American sunshine.
Costa Azul apartment – lounge area
Complete with a bar, pool, gymnasium and spa, the development provides Costa Azul residents with an exclusive private retreat. Prices start from £43,028 for a 53m² unit, with apartments offering breathtaking views towards the Potengi River, the Atlantic Ocean and the Fort of the Three Wise Men, all fitted with contemporary décor and stylish appliances.
Costa Azul apartment
Another example of what money can buy in Brazil at the moment is its sister development, Majestic Village, which has recently won the highest 5-star award in the Best Mixed-use Development Americas category at the highly acclaimed Grand Final of the International Property Awards 2015. It has been built as a condo neighbourhood, surrounded by beautiful landscaped gardens, and include extensive facilities such as swimming pools, tennis courts and club, a children’s play area and a gym.
Looking to the future, analysts don’t see the Real staying low for long – the rate is likely to stay at a similar level for a just a year or two before rebounding. From an investment point of view, this could be the perfect time to make a move.
Shares in mining giant Glencore (LON:GLEN) have risen by 10 percent this morning, as the company increased its target for debt reduction and cut spending plans further in order to keep afloat in tough market conditions.
Glencore is one of a number of mining companies going through restructuring in the light of uncertain commodity prices and has now raised its debt reduction plan to $13 billion, up from the $10.2 billion previously.
Glencore now plans to cut debt to around $18 billion by the end of 2016, down from its previous target, with capital expenditure plans also being cut.
Slowing global demand for raw materials has led to pressure in the mining sector, with rival Anglo American announcing maker restructuring plans earlier this week. Commodity prices are now at their lowest level for several years, with iron ore at a 10-year low and oil at a seven-year low. Last month, Glencore announced the closure of two of its larger mines.
The market has reacted well to the announcement, with Glencore currently trading up 9.37 percent at 90.91 pence per share. (0840GMT)
Shares in Scottish transport group Stagecoach (LON:SGC) fell 14 per cent on Wednesday, after disappointing second quarter results led to a downward revision of full-year profit expectations.
Revenues for the six months to October 31 were up 28 per cent on the same period last year to £1.97 billion. However, first-half pre-tax profits were down eight per cent on a reported basis to £90.8 million.
Stagecoach said in a statement that the group’s finances have been “adversely affected by the terrorist attacks in Paris discouraging people from travelling to major cities”. Revenue growth slowed dramatically in early November after the attacks – Stagecoach rely on inter-city European travel to boost their profits.
Chief Executive Martin Griffiths said that the figures were a “good set of results”, commenting:
“Overall, the group is in good financial shape and we were pleased to have put new bond financing arrangements in place earlier this year. Challenges remain in our sector in the short-term but the underlying strength of our businesses across the UK, continental Europe and North America, means we are well placed to drive value for our customers and investors.”
Stagecoach are currently trading down 12.86 percent at 310.30 pence per share. (1304GMT)
US company Dow Chemical Co (NYSE:DOW) is reportedly in talks to merge with DuPont (NYSE:DD) to create a chemicals giant worth over $120 billion, according to Reuters sources this morning.
First reported in the Wall Street Journal early on Tuesday, people familiar with the matter have said that as part of a major restructuring of both companies, a merger deal is on the table but has not yet been fully agreed. If it goes through, it will be one of the biggest mergers this year, with both Dow and DuPont having a market capitalisation of around $60 billion.
The deal is said to be a merger of equals, with the combined company sharing resources to branch into material sciences and agrochemicals. Dow and DuPont declined to comment.
Dow Chemicals and DuPont are two of America’s largest companies, both over a century old. The deal would face regulatory approval in several countries and is currently in the early stages of talks.
Dow Chemicals is currently trading down 2.17 percent on the news, with DuPont trading down 0.73 percent at 66.61 pence per share. (1042GMT).
The British growth forecast was downgraded on Wednesday by the British Chambers of Commerce, who now expect the economy to grow more slowly than expected over the next three years.
Weaker trade and manufacturing data led to the revision, and the BCC now expect the economy to grow by 2.4 percent in 2015, rather than the 2.6 percent previously estimated. Growth will then increase to 2.5 percent in 2016 and 2017, also slightly slower than the original 2.7 percent estimate.
John Longworth, director general of the British Chambers of Commerce, said in a statement that the economy had been “hit badly by falling global prospects”, and that “our persistently weak trade performance and current account balance are impacting our overall growth.”
Third quarter growth was lower than expected, which contributed to the BCC’s decision. The UK grew by 0.5% between July and September, 0.2 percent slower than the second quarter.
The BCC also stated that is expected interest rates to stay at their six year low 0.5 percent for the foreseeable future, rising in the third quarter of next year.
British manufacturing dropped by 0.4 percent in October, according to official figures from the Office for National Statistics, giving little sign that the sector will be driving forward Britain’s economy for the rest of the year.
The shock fall was compared to a 0.9 percent increase in September, and 0.1 percent lower than the same time last year. Analysts had expected either stagnation or a modest increase.
However, industrial output increased 0.1 percent on the month and is up on the year by 1.7 percent. Britain was the fastest-growing advanced economy in the world last year, but some surveys for this year expect a moderate economic downturn. Industrial production remains at around 9 percent below its 2008 peak, with manufacturing output also lagging around 6.1 percent.
This data will no doubt be taken into account by the Bank of England when deciding whether to raise interest rates at their meeting alter this month.
Budget airline Fastjet (LON:FJET) is trading down nearly 12 percent this morning, after passengers numbers were hit by a prolonged presidential election in Tanzania and November’s severe weather.
The airline carried 62,843 passengers in November 2015 with a load factor for the month of 60%, down 3% on the month before. The company cited a lack of demand from Tanzania as a reason for the disappointing figures; the country is yet to appoint a Cabinet nearly six weeks after election, which has driven down government and civil service demand and affected the travel sector throughout the country.
Fastjet’s punctuality was also slightly lower in November, with only 84% of Fastjet Tanzania flights arriving on time. However, this was countered by 100% of their Zimbabwe flights arriving on time, in the first month since the route’s launch.
Fastjet’s CEO Ed Winter said: “Whilst we remain mindful of the temporary reduction in demand in Tanzania, we expect that this will improve in the New Year when the political environment stabilises. Our “one day anniversary sale” on 30 November produced some excellent results, filling many seats into early 2016.
“We are delighted that fastjet Zimbabwe has been well received in its first month of operation. Passenger feedback has been positive and we look forward to expanding that network.”
Fastjet has continued to expand at a rapid pace, launching a new route between Dar es Salaam, Johannesburg and Zanzibar in November. The company have a 52 week range of between 51.12 and 155 pence per share, and is currently trading at the lower end of that at 51.47 after falling 11.26 percent.
European Council president Donald Tusk has announced that a new agreement with the UK may be possible by February – but it may not contain all of Cameron’s terms relating to welfare and immigration.
Tusk said in a letter to David Cameron: “We have made good progress,” adding that “we … have to overcome the substantial political differences that we still have on the issue of social benefits and free movement.”
“We should be able to prepare a concrete proposal to be finally adopted in February.”
Tusk will chair the first detailed talks on Britain’s demands next week, between the British prime minister and all his 27 peers, and he appears confident an agreement on Cameron’s main points will be reached. However, Cameron’s demands concerning welfare and immigration present the trickiest task:
“There is presently no consensus on the request that people coming to Britain from the EU must live there and contribute for four years before they qualify for in-work benefits or social housing,” Tusk said.
Many European leaders see this as illegal discrimination and denying a fundamental freedom to EU citizens. Anti-EU campaigners have used Tusk’s letter to argue that, should an agreement be reached, it will contain only minor changes designed to placate Britain.
However, pro-EU campaigners published a report yesterday stating that a ‘Brexit’ would have a real negative impact on the UK, causing the economy to shrink and threatening the Northern Ireland peace process. The first chapter of the report says that “the initial shock would be huge and the consequences unclear. Several factors would make this an exceptionally serious crisis.”
David Cameron sent his four demands to Donald Tusk last month, signalling the beginning of a negotiation process for a new British-EU agreement. An in-out referendum on the subject must be held in 2017.
Gold has had a rough year, falling over 18% since January 2015. It continued to trade lower on Monday, on the back of the continued strength of the dollar.
According to Carsten Menke, a commodities research analyst at Julius Baer, the stronger dollar has been affecting the price of gold by driving prices down amid a lack of fresh news for gold since Friday.
Currently down by 0.32% at $1,083.45 a troy ounce, analysts have predicted that it could continue to fall to below $1,000 a troy ounce in the coming months, increasing the pressure on gold miners.
In November, the gold spot price fell $74 to $1,064 (£705.78), the fastest drop seen since 2013. Precious metal platinum was also down on Monday morning, at £876.30, whilst silver was up by 0.15% at $14.58 an ounce.
France’s far-right political party, National Front, made history on Sunday by coming first in six out of thirteen regions.
Gaining the highest score for the anti-immigration and anti-Europe party, Marine Le Pen, the party leader described the result as “magnificent”.
This was a crucial time for the party, who were keen to see the public political opinion following the November 13 terrorist attacks.
Whilst the French political party has been previously associated with Anti-Semitism, Le Pen has hoped to “detoxify” the party’s image to make it more mainstream.
Professor of French politics at Aston University said, “These results are a shock but they shouldn’t be a surprise.”
The French presidency elections are set to run in 2017, where Le Pen considers her party’s victory as the “foundation stone” the election.
Previously, the centre-right opposition and governing Socialist party have worked together to block the FN.
