Brazil continues to attract investors

01/05/2012

Brazil looks set to remain an attractive investment destination over the coming years for investors around the world.

Recent comments from Pedro Bastos, HSBC Global Asset Management's regional head for Latin American, recently told a media briefing in Kuala Lumpur that Brazil is a “hub” in the Latin American region in terms of creation of firms.

He added: “Among all emerging markets, Brazil has been the best performer for the last ten years, both in equities and fixed income.”

In fact, around $1.1 trillion of assets are under management in Brazil and the majority of these are on short-term fixed income products. Foreign direct investment in the region, meanwhile, has also risen to a record high, clocking up $65 billion last year.

Mr Bastos explained that this is because “companies see Brazil as a major consumer market”. He continued: “We have an increasing middle class, which is about 55 per cent of the population. In the last ten years, personal income growth has been consistent at 4.5 to five per cent."

The large number of commodities that are produced in Brazil are also attracting investors. Products such as sugar cane, ethanol and coffee are produced in abundance in the country, but new sources of sustainable products, such as timber, are now starting to creep into the awareness of investors and should help to maintain the attraction to Brazil in the long run.