In 2014 the Brazilian economy saw absolutely no growth. So to say it was troubled would be an understatement. Even still, in the midst of all the turmoil, two of the top private banks in the country saw their shares increase by one third. On top of that, both banks also saw solid profit increases.
This of course is a bit confusing as banks tend to suffer when the economies they serve are suffering. So why were two of the biggest banks in the country able to weather the storm? According to Igor Cornelsen, investment expert and top Brazilian banker, the secret is having a vast knowledge of the market.
Banks in the private sector lend to borrowers who are credit worthy. This means those who have less than desirable credit are forced to rely on banks in the public sector. This of course presents a big challenge and can be a direct threat to the development of the country.
Igor Cornelsen believes the best thing the Brazilian government can do is to instill more fiscal austerity and more market-oriented reforms. This will in turn make investors feel more secure and more likely to lend.
So now the facebook question is, with such an uncertain economic climate, why would investors consider Brazil? The answer is really simple. Brazil is known for its abundance of natural resources. They also have a booming population which is in need of infrastructure development.
When you combine those two things, you have a market that looks very attractive to investors. With that being said, Igor Cornelsen believes there are a few very important basics you must know before deciding to invest in the Brazilian stock market.
The first basic is the fact Brazil has 10 major players when it comes to banking. Brazil is the eighth largest economy in the world. It is a huge economy that needs some powerful backers. That’s why there are 10 major banks, some private and some commercial, that back the entire economy.
The second thing you need to know is China is not to be ignored. China and Brazil are big time trading partners. Their economies are actually intrinsically linked. Cornelsen believes the stronger the Chinese economy, the better the prices will be on Brazilian raw materials.
In that same token, China is also Brazil’s biggest competitor when it comes to exporting industrialized goods to other countries in Latin America. Cornelsen was quoted as saying, “When you invest in a country, you should pay attention to their trading partners too.”
The idea is to get a better understanding of your investments by learning as much as you can about all connected markets. By doing this it will lead to more success and ultimately more profits.