A few days ago I have made a research about high yield bonds and found out that Brazil has the highest real interest rate of the world. Being curious I decided to research further into the Stock and Bonds Market in Brazil Market.

When I learned about Brazil in the past I often thought of a devaluate currency, a struggling economy and an instable financial environment. After rating agency Moody’s downgraded the Brazil to BB- in 1989 the consequences were far-reaching. But in the last decade the situation has dramatically changed and nowadays 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 compared to the dollar for three years in a row and the Brazilian Stock Market rallied in 2009 almost 90%.

On the most important Brazilian Stock Exchange Bovespa investors can buy, sell and rent stocks, fonds and derivatives while the BM&F trades interest futures. Both exchanges have been merged recently into BM&FBOVESPA.

The spectrum of investments is multifaceted and very well and closely regulated by the CVM (Comissao de Valores Mobiliarios).

As a non-Brazilian investor I can basically do the same investments as a local investor, however I would have to appoint a local representative in Brazil to be the responsible for my investments. As far as taxes are concerned foreign investors are tax-exempted unless they are living in an offshore jurisdiction.