Ten reasons to invest in Brazil
Europe seals New Greek bailout to avoid default
Italy's bank chief confirms recession in 2012
Brazil Real Climbs as China Manufacturing Boosts Growth Optimism
Brazil's economic future appears to be as impressive as the view from Francisco Itzaina's high-rise office in downtown Rio de Janeiro
Billionaire's decision to invest in forestry shows ethical approach
Portugal's Debt Efforts May Be Warning for Greece
Obama advisers see U.S. economy gaining strength in 2012
China to overtake India as world's biggest gold market
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Welcome to the March edition of the Greenwood Management monthly newsletter.
Our aim is to send out a newsletter on a monthly basis to advise you of future events and report on previous industry related themes and news articles.
Greenwood Management representatives will be attending the 2nd Latin America Forest Industry Conference later this month in Sao Paulo.
The conference provides Greenwood Management with a valuable forum for discussion and networking with fellow forestry specialists. Greenwood will be in discussions with all manner of industry related professionals with regard to our ongoing projects in Bahia State, Brazil, and the company’s future expansion in South America. It is crucial to maintain close links to suppliers to the industry, as well as importers and exporters, the investment community, members of the environmental movement, shipping and logistical companies, research analysts etc. In conventions such as this, we all benefit from the opportunity to better understand agro forestry developments, specifically related to Latin America. Look out for an update of our attendance at the conference.
We have included below some investment articles that may be of interest. Enjoy reading and look out for announcements on our new project.
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Ten reasons to invest in Brazil.
Victor Arakaki, investment director at HSBC Global Asset Management, outlines ten reasons why Investors should consider Brazilian equities.
For many people, Brazil is known for football and the upcoming Rio Carnival. However, investors have begun to realise there is a compelling long-term investment story too. Here are some of the key factors.
1 Becoming one of the powerhouses of the global economy
The Centre of Economic and Business Research’s latest economic league table showed Brazil has overtaken the UK as the world’s sixth largest economy. US, China, Japan, Germany and France occupy the top five places. The economy of Latin America’s largest country has surged due to a rich base of natural resources and a wealthy middle class.
2 Brazil’s own economy is bottoming out and improving
Brazil’s economy is likely to bottom out by the end of the first quarter of 2012 and then enter a recovery phase. Our expectation for GDP growth in 2012 is 3.5% (compared to a likely 3% in 2011, down from 7.5% in 2010). The main drivers of growth in 2012 are likely to be investments (6.70%) and household consumption (4.30%). Imports (9.50%) are likely to be the most important drag.
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Euro zone finance ministers sealed a 130-billion-euro ($172 billion) bailout for Greece Tuesday to avert a chaotic default in March after persuading private bondholders to take greater losses and Athens to commit to deep cuts.
After 13 hours of talks, ministers finalized measures to cut Greece's debt to 120.5 percent of gross domestic product by 2020, a fraction above the target, to secure its second rescue in less than two years and meet a bond repayment next month.
By agreeing that the European Central Bank would distribute its profits from bond buying and private bondholders would take more losses, the ministers reduced the debt to a point that should secure funding from the International Monetary Fund and help shore up the 17-country currency bloc.
But the austerity measures wrought from Greece are widely unpopular among the population and may hold difficulties for a country which is due to hold an election in April. Further protests could test politicians' commitment to cuts to wages, pensions and jobs.
Italy's central bank chief today predicted that the eurozone's third-largest economy will see a return to growth next year, but he confirmed forecasts that 2012 will be a "year of recession."
Bank of Italy Governor Ignazio Visco also described Italian banks as being sound in terms of having adequate capital, but cautioned that the outlook for their profit recovery this year is not good.
Visco replaced Mario Draghi as central bank governor last fall after the latter became European Central Bankpresident. His speech, at a financial forum in Parma, northern Italy, followed by a few days the release of data by the national statistics agency finding that Italy's economy slid into recession in the last quarter of 2011.
"This year will be a year of recession," Visco said. "As we indicated in the forecasting scenarios set out in our 'Economic Bulletin' in January, we expect a year-on-year decline in gross domestic product of about 1.5 per cent."
But Visco stressed that "it is important to look ahead, to act in such a way that as conditions in the financial and credit markets return to normal, it will be possible to stabilise economic activity in Italy already by the second half of 2012 and return to growth next year."
Brazil’s real rallied to the strongest level in almost three months as signs of increased manufacturing output worldwide spurred optimism about global growth and fueled demand for higher-yielding assets.
The real advanced 0.7 percent to 1.7343 per U.S. dollar, and earlier touched 1.7295, the strongest since Nov. 4. Yields on the interest-rate futures contract due in January 2014, the most actively traded today in Sao Paulo, fell five basis points, or 0.05 percentage point, to 9.93 percent.
Manufacturing in China, Brazil’s largest trading partner, rose last month as the world’s second-biggest economy withstood weaker exports driven by the European debt crisis. A gauge of manufacturing in the euro area beat estimates in January while a report today showed U.S. factory output grew at the fastest pace in seven months. The data fueled bets of increased demand for Brazilian exports such as iron ore and sugar, said Felipe Brandao, emerging-markets strategist at Icap do Brasil CTVM.
"The market is being influenced by the positive impact of international equities and a more optimistic climate because of this data in Europe and China," Brandao said in a telephone interview from Sao Paulo. "This data is driving stocks this morning and benefiting risk assets."
The South American boss of engine-maker Rolls-Royce's windows provide a panoramic vantage point over the city's vast Guanabara Bay.
With cargo ships, ferries and cruise liners plying their trade on the sea, and other skyscrapers rising in the foreground, it is a picturesque sight.
The giant scale of everything is also indicative of Brazil's growing economic might.
"God blessed Brazil with huge amounts of natural resources," says Mr Itzaina.
It is blessed with minerals and fresh water, and now we have just found huge reserves of oil and gas.
"Brazil is very well placed for the future."
Billionaire’s decision to invest in forestry shows ethical approach.
A billionaire investor has this week opted to put much of his cash in forestry investments, in a move that has been welcomed by alternative and ethical investment advocates, Alternative Asset Analysis (AAA).
New Zealand-born and Singapore-based billionaire, Richard Chandler has decided to invest some $150 million into Tasmanian timber group Gunns, which means that he is now one of the their largest shareholders. The investment is intended to be used by the firm to finish the development of its long-awaited Bell Bay Pulp Mill. Chandler is expected to want to start influencing the business and driving growth.
Chandler claims that having an ethical influence on firms is part of the responsibility that comes with investing in them. He said, "Responsible investors will engage corporate governance issues where they encounter them, as an intrinsic and necessary component of professional investment management."
Portugal’s Debt Efforts May Be Warning for Greece
As debt-plagued Greece struggles to meet Europe’s strict terms for receiving its next round of bailout money, the lesson of Portugal might bear watching.
Unlike Greece, Portugal is a debtor nation that has done everything that the European Union and the International Monetary Fund have asked it to, in exchange for the 78 billion euro (about $103 billion) bailout Lisbon received last May.
And yet, by the broadest measure of a country’s ability to repay its debts, Portugal is going deeper into the hole.
The ratio of Portugal’s debt to its overall economy, or gross domestic product, was 107 percent when it received the bailout. But the ratio has grown since then, and by next year is expected to reach 118 percent.
That’s not necessarily because Portugal’s overall debt is growing, but because its economy is shrinking. And economists say the same vicious circle could be taking hold elsewhere in Europe.
President Barack Obama’s advisers expect the U.S. economy will gain strength this year and add 2 million jobs, according to an annual White House report to Congress.
Though the economy is hampered by lingering impediments from the collapse in housing prices and the 2008 financial crisis, the report forecasts "an upturn in economic growth" this year as the recovery "will continue to gain strength."
Alan Krueger, chairman of the White House Council of Economic Advisers, said in a conference call that employment growth "has gained momentum" in recent months.
A "plausible range" for the average unemployment rate this year would be between 8 percent and 8.6 percent, the report said, citing private forecasters.
The rate, the main economic indicator for voters and in the political debate, dropped to 8.3 percent in January, the lowest level in nearly three years.
Gold sales rise 20% in China as demand for jewellery increases and rich look for safe investments.
China is poised to overtake India to become the world's biggest market for gold this year thanks to soaring investment purchases of bullion and steadily rising jewellery sales, according to the World Gold Council's annual report.
In 2011, gold sales to China shot up 20% on the previous year to 769.8 tonnes, the WGC said in its Gold Demand Trends report. The fastest growth was in sales of gold bars and coins for investment: total investment purchases rose 69% in 2011 to 258.9 tonnes, worth 84.5bn RMB.
The data suggests China's new rich are turning to gold to protect their wealth as the government seeks to tame the country's giddy property prices.
"It is likely that China will emerge as the largest gold market in the world for the first time in 2012," said Marcus Grubb, the WGC's managing director for investment.
Greenwood Management is currently searching for new agency representation in locations such as Ireland, France, Singapore and many other destinations worldwide.
Join our team and help us spread the word about our sustainable forestry investments, while you expand and diversify your investment portfolio.
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