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Last week I have made a study regarding high yield bonds and discovered that Brazil has the highest real interest rate of the world. Being curious I decided to research further into the Brazilian Stocks and Bonds Market.

When I heard of Brazil before I often thought of a devaluate currency, a struggling economy and an instable financial market. After rating company Moody’s downgraded the Brazilian economy to BB- in 1989 the consequences were disastrous. However in the last ten years things have dramatically changed and today Brazil is Latin America’s most stable economy and is becoming one of the most important economies in the world. The Brazilian currency Real is the strongest currency against the dollar for three consecutive years and the Brazilian Stock Market rallied in 2009 almost 90%.

On the most important Brazilian Stock Exchange Bovespa investors can trade stocks, fonds and derivatives while the BM&F trades lifestock futures. The exchanges have been merged some months ago into BM&FBOVESPA.

The spectrum of investment products is manifold and very well and closely regulated by the CVM (Comissao de Valores Mobiliarios).

As an investor from oversea I can basically do the same investments as a local investor, however I must appoint a local representative in Brazil to be the responsible for my investments. As far as taxes are concerned foreign investors are exempted from tax unless they are resident in an offshore jurisdiction.

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