The latest Ernst & Young Capital Confidence Barometer for Brazil finds levels of confidence high with a bright outlook for the immediate future. Executives, both globally and in Brazil, feel the time is right to grow their investment in Brazil.
The Barometer is compiled based on the survey reponses given by 1,600 executives from global and Brazilian backgrounds in a wide variety of sectors. In the November’s edition of the bi-annual Barometer, confidence levels in all categories are at their highest for over a year.
Confidence in corporate earnings comes in 41 per cent, almost double the level since in October last year. Executives give short-term market stability 37 per cent (up from 29 per cent a year ago) and clearly vouch for the stock market outlook.
Among the companies interviewed, there’s a clear push to increase their investment in Brazil. Nearly half the correspondents state that growth is their main business focus for the next 12 months. Mergers and Acquisitions are strongly favoured – 48 per cent of those interviewed say they expect to pursue acquisitions in the next year and a third have at least five deals in the pipeline.
Brazilian companies are increasingly global in their outlook and many Brazilian executives claim they are looking outside their usual investment destinations to growth opportunities further afield – China and India make their first appearance on the top five preferred investment locations. For non-Brazilian executives, Brazil features once again in the top five investment destinations, a preference that is reflected in this year’s buoyant levels of foreign direct investment (up 8 per cent between January and August).
Private equity remains a favourite investment and activity in the sector has increased markedly. According to the Barometer, this is because “many global funds see increasing opportunities as the middle class continues to grow”.
Confidence in Brazilian investment is obviously high and the Barometer concludes, “As Brazil continues to assert itself on the global stage, companies will be prepared for exciting developments in the deal markets and, ultimately, for economic growth”.
Source: Ernst & Young
