BEST Brazil promotes Brazilian financial market to investors in Europe

The Brazilian Mercantile & Futures Exchange (BM&F), the São Paulo Stock Exchange (BOVESPA), the Brazilian Clearing and Depositary Corporation (CBLC) and the National Association of Investment Banks (ANBID) promoted the second European edition of “BEST: Brazilian Excellence in Securities Transactions” in London, on April 25th; and Frankfurt, on April 26th. More than 200 people representing banks, brokerage houses, hedge funds, investment funds, custodians, and dealers attended lectures about opportunities on the Brazilian financial and capital markets, as well as explanations on theirs efficiency, security, and reliability.

The new secretary of the Brazilian National Treasury, Mr. Carlos Kawall, the Deputy Governor for Monetary Policy of the Brazilian Central Bank, Rodrigo Azevedo, and the commissioner from Brazilian Securities and Exchange Commission, Mr. Sérgio Weguelin Vieira took part in the event to address questions related to Brazilian local government securities markets infrastructure and domestic market regulations.

The objective of this event is to promote the Brazilian markets to non resident investors on a regular basis, with annual meetings planned for the main financial hubs in Europe, the United States and Asia. This year, besides London and Frankfurt, the group will be in New York (June 20th), San Francisco (June 21st), Singapore (September 12th) and Hong Kong (September 14th).

The proposal of this initiative is to channel suggestions from the international community, and discuss the main concerns of market players in order to facilitate foreign investments in Brazil. In 2006, a great innovation occurred in the form of an income tax exemption for nonresident investors in government bonds (Provisional Measure 281). This new measure has already brought results. In February and March, international investors acquired 57% of long term government bonds, with maturities above 10 years, and 33% of the notes offered by the National Treasury with maturities of between 3 and 10 years.

In the same piece of legislation, the financial transaction tax (CPMF) on public offerings was also exempted. This was one of the main issues raised by investors who attended the previous BEST Brazil seminars in Europe, the US, and Asia, and who now represent 70% of the public equity offerings in the Brazilian market.

Regarding the performance of the Brazilian economy during this election year, the National Treasury Secretary, Mr. Kawall, said that the Brazilian Primary Surplus target will remain at 4.25% of the Gross Domestic Product through the end of the year, in spite of fears of increased public spending. He affirmed the ministry’s commitment to the control of public spending and its intention to meet fiscal targets.
Please find below a profile of the participants in London and Frankfurt.

Industry Industry Participant Banks 51%   Brokerage Houses 13%   Non-financial Corporations 09%   Investment Funds 08%   Hedge Funds 04%   Law Firms 02%   Others 13%

JOB TITLES Industry Participant Banks 51%   Brokerage Houses 13%   Non-financial Corporations 09%   Investment Funds 08%   Hedge Funds 04%   Law Firms 02%   Others 13%

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