Trading Stocks and Buying Bonds in Brazil
I recently made a study about 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 Stock and Bonds Market in Brazil Exchanges.
When I heard of Brazil in the past I always thought of high inflation, and an instable 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 today Brazil is the continent’s most stable economy and is becoming one of the most important economies in the world. The Brazilian currency Real is the most valuated 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 buy, sell and rent stocks, fonds and derivatives while the BM&F trades agriculture futures. Both exchanges have been merged a few months ago into BM&FBOVESPA.
The spectrum of investments is broad and very well and closely regulated by the CVM (Comissao de Valores Mobiliarios).
As an investor from oversea 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 actions. As far as taxation is concerned foreign investors are exempted from tax unless they are resident in an offshore jurisdiction.
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