Author: Antonio Guerrero

ROUNDUP: BRAZIL

By Antonio Guerrero

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Rousseff: Getting off to a steady start

Brazil's newly installed president, Dilma Rousseff, provided a firm indication of her administration's plan to continue the economic policies of her predecessor, Luiz Inácio Lula da Silva, by keeping key members of his economic team on her cabinet. Antônio Palocci, Lula's finance minister during most of his first term, was invited to become Rousseff's minister of the presidency, effectively becoming Rousseff's chief aide. Rousseff held the same position under Lula before stepping down last March to launch her presidential bid. Finance minister Guido Mantega also remains in his post. Rousseff, a former guerrilla, has vowed to cut public spending and tighten fiscal policy, sending encouraging signs to the business community.


Citigroup and US Bancorp are among US companies entering Brazil's booming credit card market. Citibank Brazil has partnered with Elavon, an Atlanta-based US Bancorp subsidiary that provides end-to-end payment processing services, to offer merchant services in Brazil. Citibank will operate the joint venture through Credicard, its local credit card division. Elavon president and CEO Mike Passilla says Brazil's credit card market has been growing at more than 20% annually since 2005. According to Febraban, the Brazilian banking federation, 65% of middle- and working-class Brazilians use credit cards. Citigroup and US Bancorp did not disclose the terms of the partnership.


A Reuters poll in December showed that analysts and fund managers believe the São Paulo stock exchange's Bovespa index will end 2011 at 80,000 points, after hitting the 73,000 point mark by midyear. This would imply a more-than-15% gain from early December 2010 levels. The Bovespa, which in an earlier Reuters poll in September was expected to end 2011 at just over 78,000 points, hit a 2010 low of 57,600 points. Equity gains will be sparked by sustained economic growth in Brazil and an expected US recovery.


Bradesco, Brazil's second largest private sector bank, signed a more-than-$320 million contract to become the first domestic sponsor for the 2016 Olympic Games in Rio de Janeiro. The deal includes marketing rights connected with the Brazilian Olympic Committee and will allow the bank to highlight its services during the event. Bradesco has been seeking to boost its profile after losing its spot as Brazil's largest bank as a result of the merger between Banco Itaú and Unibanco in 2009.