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Brazilian companies raised $3.5 bn abroad

July 11, 2016

Brazilian companies resumed bond offers overseas last week

(full report attached)

Real underperformed its peers

The BRL underperformed its peers, weakening as much as 3.9% at its lows. On Friday, losses were partly reversed and the exchange rate closed at 3.30 reais per U.S. dollar, depreciating 1.9% during the week (Charts 1, 2, 3 and 4).

Central bank maintains interventions in the FX market

The monetary authority continued to auction reverse swap contracts last week. Four auctions of $500 million were carried out and another one, of $500 million, was announced for today. The central bank’s short position now stands at $60 billion (Charts 5 and 6).

Currency outflows in June

By the end of June, the currency flow was negative by $3.6 billion, as $7.4 billion financial outflows outsized $3.9 billion trade inflows (Charts 7 and 8).

New bond offers abroad last week

Brazilian companies resumed bond offers overseas last week. An oil & gas enterprise carried out two deals, one totaling $1.75 billion in bonds due in 2021 and another totaling $1.25 billion in bonds due in 2026. A pulp & paper company raised $500 million by placing bonds due in 2026 (Chart 9 and table).

Foreign inflows to the stock market in July

Foreign flows to the stock market are positive in July, driven by $193 million inflows to the spot market and $10 million inflows to the futures market (Chart 10).

Investors changed their positions in FX derivatives

Non-residents reduced their positions in dollar futures by $3.7 billion, increased their positions in cupom cambial by $2.3 billion and reduced their positions in FX swaps by $1 billion. Institutional investors reduced their positions in dollar futures by $1.5 billion, their positions in cupom cambial by $1 billion and their positions in FX swaps by $2.6 billion. Non-residents, banks and institutional investors hold positions of $24 billion, $36 billion and $7 billion, respectively (Charts 11, 12, 13 and 14).


 

 



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