Author: Antonio Guerrero

ROUNDUP

By Antonio Guerrero

300_Regulars_EM_Roundup_4Dec

Doubling up: Vale plans to ramp up spending next year

Mounting concerns over Banco PanAmericano's liquidity sent its shares into freefall and prompted a government bailout. The bank—Brazil's 20th largest by assets—received a $1.5 billion emergency loan from Grupo Silvio Santos, a local entertainment conglomerate that holds a controlling stake in the bank. The group raised the funds through a loan from Brazil's Credit Guarantee Fund.


Brazil's Vale mining company, the world's largest iron ore producer, plans to invest a record $24 billion next year to ramp up production to meet increased demand from emerging markets, particularly China. The 2011 capital expenditure budget is nearly double 2010's $12.9 billion. Vale's third-quarter earnings more than doubled to $6.1 billion, setting a quarterly record for the company.


Brazil's BNDES national development bank confirmed it will provide nearly $12 billion for construction of a bullet train linking São Paulo and Rio de Janeiro. The bank has committed to financing 60% of the total price tag under 30-year loans, with the remainder to be provided by various export banks in supplier countries and private sources. The winning bidder for the project is scheduled to be announced on December 16.


General Electric plans to invest $500 million to expand its operations in Brazil, as well as to accelerate technology partnerships with leading local companies. GE chose Rio de Janeiro as the site for its newest research and development center, which is expected to employ 200 researchers and engineers when fully operational.


The finance ministry has again increased its full-year GDP growth forecast, despite a recent slowdown in industrial output. Officials now predict the economy will grow by 7.5% this year, compared with a previous forecast of 6.5%. They predict the economy will grow by an average 5.9% per year between 2010 and 2014.