The Center of the Stock Market Universe… Revealed!
by Robert Williams, Publisher
Tuesday, December 15, 2009: Issue #1158
I’m actually quite sick of the BRIC acronym. But at least the “B” is in the right place: First!
Brazilian stocks, as measured by the iShares Brazil Index ETF (NYSE: EWZ) are up 96%, year to date.
That’s right. In a year that began with financial Armageddon, Brazilian stocks were barely stymied, paving the way for the huge move in the middle to latter part of the year.
(For comparison’s sake, China, using the iShares FTSE/Xinhua China 25 Index ETF (NYSE: FXI) as a proxy, has returned just 46%.)
So given that this is forecast week, I’m going to double-down on Brazil in the coming year.
Fact is, the money flowing into Brazilian corporate bonds, which is fueling the economic boom there, is astonishing. Real-denominated corporate bonds totaled $19.5 billion in the first 11 months of this year, versus only $8.9 billion in the same year-ago period.
And 2010 will likely be another banner year, as the quality of the issuers – the corporations – increases.
Even better, the state-run bank, BNDES, is providing liquidity (about $5.7 billion’s worth) for a secondary market for trading the bonds.
Bottom line, I’m a sucker for a developing nation undergoing such a robust capital market expansion. (Brazil’s international reserves have surged to a near record $238 billion from $206 billion a year ago, as foreign investment in the nation’s capital markets increased.)
But don’t take my word alone for it. Karim Rahemtulla gives his emerging market outlook (and ways to profit) on Brazil, along with the rest of the BRICs.
Ahead of the tape,
Robert Williams
Related Investment U Articles:
- Global Portfolio Diversification: Striking the Right Balance Between Risk and Reward
- The New Silk Road And The Center of the Trading Universe
- While Brazil Prez Tangos in China – Hard Work at Home Undone
- Bargain Hunting in Brazil: Eight Ways to Give Your Portfolio a Vacation
- Are These Two Emerging Markets Getting Too Close?
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In addition to once being a full-time trader of equities and equity derivatives, Robert Williams has served as the lead financial analyst for a Forbes top-50 private corporation and an analyst for the endowment of a major academic institution. He's also been profiled in such books as Trade with Passion and Purpose and Alexander Green's The Secret of Shelter Island. 
