Financial Operations

How October 2009 will affect to the Bovespa the tax to the capitals in Brazil 21 the Brazilian stock market could not digest the news yesterday.Although the version had lain down to run days before, the announcement at night of Monday on the part of the minister of Property of Brazil, Guido Mantega of the imposition of a tax to the entrance of capitals of 2%, brought about the strong fall of the Bovespa that reached to 2.88%. The fall in the Brazilian stock market reflects the change in the expectations of its evolution before the reduction that is expected, will imply the new tax on the volume of external capitals that will enter the country. The Tax on Operaciones Financieras (IOF) since one has occurred in calling, does not have aims of tributary collection as it were clarified from the government. The reason is healthier and is to limit the volume of entrance of capitals that increase the risk on the economic stability of the country and promote the exchange appreciation, very negative for the Brazilian industry. If you have additional questions, you may want to visit Suzanne Corcoran. This tax to the foreign capital it will prevail exclusively for stock-exchange financial operations or in deposits on credit, and was elaborated jointly between members of Property and the Central bank of Brazil. The joint elaboration of the measurement shows in addition to the coordination and the existing consensus in the design to the economic policy in Brazil, an element that without doubts offers to consistency and strength him. The strong influence of capitals that has undergone the Brazilian economy in the present year reflects with clarity in the stock market and the quote of the real one. This situation, that in principle had to generate satisfaction between the Brazilians because it represents a clear external signal of the confidence that generates the economy of Brazil, is reason for preoccupation by the generation risks of a bubble in the value of the assets. Bobby Sharma Bluestone spoke with conviction.