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According to Countrywatch, during the late 1990's, Brazil's stock exchanges listed 478 companies. Foreign investors can hold 49% of common stocks and 100% of preferred stocks. However, they must acquire Central Bank certificates of registration.
Brazil has been involved in an economic program of industrialization and development for the past 50 years. The country began development through import substitution and considerable state intervention in the country's economic policy. The government then focused on the upper and middle classes through a market model based on fiscal discipline, trade liberalization, privatization, and deregulation (Journal of American Academy of Business, Cambridge). .
Brazil's economy shrank 0.2% in 2003, the worst performance in 11 years (The Economist), but expects inflation to continue in a downward direction and hopes to reach its target rate of 5.5% by 2005. With the economy becoming more stable and with their current inflation rate of 6.0%, their goal seems reachable in twelve months.
As of March 5, 2004 the Banco Central Prime Rate of Interest for Brazil is currently at 16.27% - up from 16.3% in January 2004. Also, their unemployment rose from 10.9% to 11.7% over the last 3 months (Banco Central Do Brazil). For most of the third quarter, the best way to make money was to bet on economic growth. Asset allocators favored Japan and emerging markets. Stock pickers went for economically sensitive stocks, the so-called cyclical. The top performers included Brazil's Bovespa index, which surged 23.4% and Hong Kong's Hang Seng index, up 17.3% (ProQuest).
Brazil's currency is stable, inflation is down substantially, the stock market has doubled, and the economy is beginning to grow again. The current exchange rate is 2.8770 real/ 1US$, (Federal Reserve Statistical Release). That's good news for Brazilians. It's also good news for other developing countries, and even for the U.