Pioneer Land Group Blog

First coined in 2001 by Goldman Sachs, BRIC was the collective given to the group of countries – Brazil, Russia, India and China. The investment bank argued in a thesis entitled Dreaming with BRIC’S: The path to 2050 that by the year 2050 the combined gross domestic product of these 4 countries will surpass the product of the elite G7 group of the US, Japan, Germany, Britain, Canada and Italy. The term has stuck and whether this theory is acknowledged by all is neither here nor there, because the figures can’t hide the truth. The BRIC economies are catching and they are catching fast, furthermore the current financial crisis has only strengthened the position of these emerging markets. As the rest of the world’s economies shrink China is expected to expand by 6% this year and India 4.5%,.

This has led the chief economist at Goldman Sachs and the original author of the thesis to revise his theory and predict that the BRIC economies will surpass the G7’s efforts by 2027, as little as 18 years time.  This is almost half the original prediction and it would come as no surprise were this to be revised again.

Perhaps of more significance though is the inaugural summit of the BRIC leaders in the Russian city of Yekaterinburg. It will be the first time in history the leaders of these emerging powers will assemble for talks and the implications to the rest of the global economy are far reaching. The momentum of this group is gathering pace all the time, and this is the clearest signal yet that this group of nations are able to look after themselves and solve their issues separately with out the help of the G7.

Ref: BRIC nations gather for inaugural summit

Santander, Europe’s largest bank and one of the few to of come out of the global financial crisis in a relatively healthy state, have announced an Initial Public Offering (IPO) believed to be in the region of $7.2 billion dollars for the Brazilian arm of their operation; Banco Santander Brasil. Already its largest division in Latin America, this move is seen by analysts as a firm indication of the possible growth opportunities the bank believes exist in Brazil.

With a presence in Sao Paulo going back over 25 years, Banco Santander Brasil is currently Brazil’s 3rd largest bank, yet globally it is one of Santander’s most important headquarters accounting for 20% total profit for the group. This IPO on the BM&F Bovespa will be the largest offering made in the stock exchanges history, and globally the second largest of 2009. 525 million units will be sold at a range of 22 reais to 25 reais, an offering equivalent to 16.2% of Banco Santander Brasil’s current value.

Currently, the bank operate on all segments of the financial markets, with 3,600 branches across Brazil serving over 9 million customers. A further 400 branches are expected to open should the offering be successful with $1.5 billion due to be invested into expansion. The chairman of the group, Emilio Botin outlined his plans to make Santander become Brazil’s biggest non-government lender.

With far-reaching implications for private lending, it is seen as welcome and timely news for real estate investors within Brazil. Currently the mortgage market in Brazil accounts for approximately 3% of GDP, a figure which has seen the market remain stable over the duration of the global banking crisis. However, the economy has now pulled itself out of the recession and confidence is surging back to investors. The mortgage market in Brazil is still in its infancy, but with such a large offering made by Santander, it may only be a matter of time until we see some maturity.

For further information on this article please visit: Banco Santander Brazil Gets Ready for Largest IPO in 2009

Brazil is out! Figures released last week for the second quarter of 2009 show that Brazil has officially come out of recession. The south American giant grew 1.9% in the period from April to June after a series of stimulus packages begun to have the desired effect. It represents another major positive point for the global economy after Sweden also announced it had emerged from recession on Friday.

Brazil’s President Luiz Inácio Lula da Silva has passed a series of measures in order to advance the economy, including large scale spending on infrastructure projects, as well as implementing tax breaks on companies and individuals. This announcement means that comparatively Brazil has only been in recession for a short period of time. The economy only contracted in the previous two quarters and these positive figures represent a significant boost for President Lula. Furthermore, inflation had slowed in August to 4.4% for the past 12 months, firmly on target for the central banks forecast of 4.5%

For the full story please visit : BBC News: Brazil’s economy leaves recession