Why Brazil, why now?

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Why Brazil, why now?


Americas Bridge International inception originated in 2010, in La Jolla, California, and expanded operations in 2018 in Miami, Florida. Florida is a melting pot with a vibrant mix of cultures, and Floridians and Brazilians have a special bilateral relationship. Brazilians participate in every segment of Florida society, including education, health, finances and technology.

Brazil is a key trading partner of the United States. Florida is its main partner and also an important gateway for Brazilian companies and products into the North American market. Bilateral trade between Brazil and Florida reached $ 20.4 billion in 2018, according to Florida Enterprise. It represented almost one-third of the total trade flow between Brazil and the United States. ABI will continue the focus on cultivating, nurturing and strengthening the bridge between Brazil and USA business enterprises and relations.

In January, 2019, Marco Rubio, the senior United States Senator from Florida, wrote a commentary entitled, "US should go big on Brazil." Mr. Rubio is also chairman of the Senate Foreign Relations Subcommittee on the Western Hemisphere and is a member of the Senate's Intelligence Committee and Appropriations Committee.

Recalling the New Year's day inauguration of Brazilian President Jair Bolsonaro, Senator Rubio sees a historic opportunity to bring the two most populous nations in the Western Hemisphere closer together. "The Trump administration should move quickly to advance goals that would be welcomed by the Bolsonaro government, such as bolstering our defense and intelligence ties, increasing investment in trade, cooperation in the energy sector, and supporting Brazil's ascension to the Organization for Economic Cooperation and Development, or OECD", Senator Rubio suggested.

He stated, " The United States- Brazil trade relationship is large, with more that $100 billion in trade services and goods in 2017. Two-way trade in goods with the United States made Brazil our 12th largest trade partner in 2016. As we work to expand trade between our economies, we should seek to deepen our bilateral economic engagement and a commitment to fair and reciprocal trade, which could lead to mutual benefits for our nations."

A theme throughout Senator Rubio's commentary was one of unity. An opportunity for the governments of Brazil and the United States to work closely together to ensure a stronger and strategic alliance, which would benefit the people of both nations. Senator Rubio concluded, "President Bolsonaro's new administration offers a fresh opportunity to build a stronger US-Brazilian partnership to ensure continued peace and expanded prosperity and stability for the Western Hemisphere. The United States must seize this opportunity."

A few random observations:

In the Ernst & Young report, "Global Capital Confidence Barometer, 2nd half 2018", it states, " There is some consensus that Brazil's new president will introduce fiscal reforms that will improve market confidence and attract new investment. Specifically, we expect to see the privatization of public companies across numerous industries, from infrastructure to energy. We also anticipate that the new government will create incentives to encourage public-private partnerships (PPPs) to fund infrastructure, health care and education programs."

Brookfield Asset Management Inc. and its subsidiaries have made nearly a dozen major acquisitions in Brazil since 2013. The companies have invested approximately $10 billion on energy, infrastructure and real estate assets. Brookfield is a savvy "contrarian investor", and recognizes when it is a good time to find value.

Bloomberg, published an article on February 6, 2019, entitled, "Brookfield Bullish on Brazil with Bolsonaro's Pro-Business Bent." It is stated that, "Brookfield Asset Management Inc., one of the world's largest alternative asset managers, wants to capitalize on a wave of privatizations in Brazil as the new government of Jair Bolsonaro moves to bring fiscal discipline to the country.

Citigroup Inc., recently announced that it plans to double its Brazilian commercial banking unit's assets by 2020, thanks to growth in loans to mid-sized companies. Citigroup representatives noted that those assets jumped by 27 percent in 2018 as an economic recovery increased demand.

Bloomberg Business, in an article dated December 4, 2018, published the headline, "BlackRock's Landers says Brazil 'Attractive' on Growth Pickup." "Brazil looks attractive," Will Landers, a managing director at BlackRock, said in an interview in São Paulo. "The recovery has been slow and gradual, but this could start to pick up as the market sees the new government executing its economic plan." The new administration has been attracting "very good" names, and the future Economy Minister Paulo Guedes's idea of reducing the size of the government through privatizations, concessions and asset sales is "music to the market's ears," Landers said.

Will Landers, who was born in Brazil, but has lived in the U.S. for decades, was recently named partner and head of equities at BTG Pactual Asset Management in São Paulo, Brazil. Mr. Landers maintains a very highly regarded reputation in both financial and social spheres. He has always displayed the highest quality of excellence, through his dedication at BlackRock and the world markets, to his philanthropic passion with the Brazil Foundation. ABI will continue to observe Landers' astute guidance, and wishes him the very best in all his future endeavors.

 

 

Richard F. Maurer
Americas Bridge International LLC
www.americasbridge.com
Mobile +1.858.270.2635
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