Brazil:
Even though nation's key Bovespa Index is up 535% since 2003 -- almost nine times the return of Standard & Poor's 500 Index, Brazil is not perfect, around a third of Brazilians live in poverty, but growth around 4.7% and a sharp drop in inflation have made a middle class a bit richer that is buying wireless phones, traveling or going to college. The world's biggest exporter of raw material is highly dependent of global economy too.
It's a question of sustainability and whether a global economic slowdown would temper growth in this emerging market.
Anyways, investors should diversify its portfolios in such markets as enthusiasm for Brazilian stocks is far from complete. IMO
Today's stock selection:
VIV
We are keeping our Buy recommendation on Vivo
Participações S.A. (VIV). The company has a
dominant position and a strong brand in the fastgrowing
Brazilian wireless business. First quarter
operating results were very positive, including
continued debt reduction. The short-term outlook
remains encouraging due to positive industry trends
coupled with the improvement in the Brazilian
economic environment. Finally, the acquisition of
Telemig (TMB) and the new bands in all the regions
where the company was not authorized to operate
rendered positive news.
http://www.zacks.com/newsroom/commentary/index_pdf.php?id=791...
$6.38 (06/24/08)
