Itaú BBA - Brazilian corporate issuances abroad add up to $15.5 bn in 2016

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Brazilian corporate issuances abroad add up to $15.5 bn in 2016

September 12, 2016

Brazilian corporate issuances abroad add up to $15.5 bn year-to-date and more than double 2015 figures.

(full report attached)

BRL underperformed its peers

The international scenario favored currencies early in the week, but risk aversion later reversed most of the appreciation. The Brazilian currency underperformed its peers and closed the week at 3.27 reais per U.S. dollar, weakening 0.5% (Charts 1, 2, 3 and 4).

Central bank maintained reverse swap auctions

The monetary authority maintained the pace of interventions in the FX market, with reverse swap auctions of $500 million.  Currently, the central bank’s short position in FX swap contracts stands at $37 billion. If this pace is sustained, the monetary authority will zero the outstanding amount of FX swaps by year-end (Charts 5 and 6).

Currency outflows in August

By the end of August, the currency flow was negative by $1.1 billion, as $3.8 billion financial outflows outsized $2.7 billion trade inflows. The flow is also negative in early September, driven by $338 million financial outflows and $298 million trade inflows (Charts 7 and 8).

One new bond offer abroad last week

A food company offered $1 billion in bonds due in 2023. Year-to-date, Brazilian issuances abroad total $15.5 billion vs. $8 billion in 2015. Including National Treasury issuances, Brazilian borrowings this year total $18.5 billion (Chart 9 and table).

Foreign flows to the stock market are positive 

Foreign flows to the stock market are positive by $462 million in September, driven by $295 million inflows to the spot market and $167 million inflows to the futures market (Chart 10).

Non-residents reduced their positions in dollar futures 

Non-residents reduced their long positions in dollar futures by $2.2 billion. Other positions in FX derivatives were virtually unchanged. Non-residents, banks and institutional investors hold positions of $16 billion, $33 billion and $ -2.8 billion, respectively (Charts 11, 12, 13 and 14).



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