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iShares MSCI Brazil Capped ETF (EWZ)

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  • Feb. 7, 2014, 4:42 PM
    | 1 Comment
  • Feb. 3, 2014, 8:30 AM
    • The PMI edges higher to 50.8 in January from 50.5 previously, but New Orders jumped to an 11-month high of 52.4 (and from 50.7 previously). Output rose, but pace was the slowest since September.
    • Despite gains in orders and production, employment contracted for the 10th consecutive month.
    • Prices rose at their fastest pace in three months amid the real's depreciation - falling 2.5% in just January.
    • EWZ -12% YTD, but up 0.9% premarket
    • Related ETFs: EWZ, BRF, BZF, BRXX, EWZS, BRAQ, BRAZ, BZQ, BRZU, BRAF, UBR, BRZS, FBZ, DBBR
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  • Jan. 29, 2014, 10:54 AM
    • Who could have thought raising interest rates 425 basis points would be bearish? A curious rally following Turkey's defense of the lira - it jacked rates to 12% from 7.75% - has completely reversed. One feels a 1992-like vibe where the Bank of England hiked like crazy to defend the pound, but then ultimately had to let it go (also creating a bottom in stocks).
    • In Europe, the Stoxx 50 (FEZ) is off 1.3%, with Turkey (TUR) now down 2.3%.
    • South Africa joins the party, unexpectedly hiking its benchmark interest rate by 50 basis points to 5.5%. EZA -2.8%.
    • A check of Brazil (EWZ -1.3%) and India (EPI -1.1%) - where monetary policy has also been tightened this week - finds them lower as well.
    • The money is flowing into U.S. Treasurys which continue a big 2014 rally. The 10-year yield is off five basis points to 2.71%. TLT +0.3%, TBT -0.5%.
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    | 8 Comments
  • Jan. 24, 2014, 4:48 PM
    | 3 Comments
  • Jan. 9, 2014, 3:51 PM
    • After a rough three year stretch, Brazilian stocks continue to have a tough time of it early in 2014, with the Bovespa off another 2.5% today and the EWZ is down 6% YTD. The real keeps sliding as well - down 10% vs. the dollar over the last 3 months.
    • Of imminent concern is slowing growth and a ballooning budget deficit forcing a ratings downgrade - with analysts at both S&P and Moody's suggesting this week one could come later this year. “We don’t have fixed limits…but if debt-to-GDP ratio gets closer to 65%,” Brazil could be ripe for a credit-rating cut, says Moody's Mauro Leos (it's above 60% now). S&P meanwhile suggests the cut in the country's BBB rating could come ahead of the October presidential election.
    • Related ETFs: EWZ, BRF, BZF, BRXX, EWZS, BRAQ, BRAZ, BZQ, BRAF, BRZU, UBR, FBZ, BRZS, DBBR
    | 1 Comment
  • Jan. 7, 2014, 4:13 AM
    • In Sept., Moody's changed Brazil's credit outlook to stable from positive, as persistent low growth interrupted improvement in several economic and fiscal indicators. One important ratio showing deterioration is Brazil's debt-to-GDP measure, which has been climbing towards the 60% mark and Moody's estimates it could reach 62% in 2014.
    • The path debt-to-GDP takes will strongly influence Brazil's sovereign credit outlook. An important question to sovereign credit quality is whether authorities can restore conditions that will eventually lead to a declining trend in the debt ratio.
    • Brazil has limited fiscal flexibility, given a rigid government spending structure and relatively heavy interest burden. The main challenge public finances face is the persistent increase of primary current spending.
    • Protests in various cities around the country in 2013 expressed social discontent with the quality of government and with its ability to deliver public goods and services. However, Moody's does not expect upcoming elections to shift policies drastically given general consensus for preserving macroeconomic stability. Still, Moody's says Brazil faces political challenges related to difficulties in passing reforms necessary to remove structural obstacles that constrain the country's medium-term economic prospects.
    • ETFs: EWZ, BRF, BZF, BRXX, EWZS, BRAQ, BRAZ, BZQ, BRAF, UBR, BRZU, FBZ, BRZS, DBBR
    • Source: Moody's
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  • Dec. 17, 2013, 10:47 AM
    • Brazil will get more than 1T Brazilian reais ($429M) in royalties and crude oil over the next 35 years from its share of the massive Libra offshore oil prospect, to be spent on domestic education, health care and social welfare projects President Rousseff says.
    • In October, a consortium that included Petrobras (PBR -0.4%), Total, Royal Dutch Shell, Cnooc and China National Petroleum paid ~$7B as part of the winning bid to develop the field.
    • Rousseff has faced criticism from Brazilians who viewed the sale as delivering Brazil's natural resources into the hands of foreign companies, but the auction also generated lukewarm interest from private-sector companies that balked at the terms of the production-sharing agreements and heavy government oversight of Libra's development.
    • ETF: EWZ.
    | 2 Comments
  • Dec. 6, 2013, 4:48 PM
    | 2 Comments
  • Dec. 3, 2013, 4:18 PM
    • “Brazil’s capital markets appear to be suffering from a sudden flight of capital," says Michael Shaoul, warning of a danger of "abrupt collapse in investor confidence ... Brazil should be watched closely in the days ahead."
    • The Bovespa slid another 1.75% today, but more alarmingly, the country's 10-year yield spread (vs. the U.S.) shot to its highest level since the summer of 2009.
    • This morning, Q3 GDP was reported to have contracted by 0.5%, worse than expectations. From Capital Economics: "Brazil is not particularly attractive to foreign firms ... Woefully low domestic savings mean that Brazil relies on attracting foreign capital in order to fund investment projects. But with the current account already in a significant deficit, there is little scope for running up an even larger external deficit to fund investment."
    • Off 1.3% today, the iShares MSCI Brazil Index ETF (EWZ) is down 20% YTD.
    • ETFs: EWZ, BRF, BZF, BRXX, EWZS, BRAQ, BRAZ, BZQ, BRAF, UBR, BRZU, FBZ, BRZS, DBBR
    | 2 Comments
  • Dec. 3, 2013, 8:56 AM
    • Brazil's Q3 GDP contracts 0.5%, missing estimates of a 0.3% contraction, and the worst performance since 2011 Q3. On a Y/Y basis, the economy grew 2.2%. The decline in Q3 was led by agriculture, which fell 3.5%. Investment also declined 2.2%.
    • The news adds to complications for President Rousseff who is up for election next year. Her government has already slashed by nearly half its forecast for robust 4.5% growth in 2013.
    • The central bank last week continued its rate-hike cycle, but gave indications a pause could be coming soon, and the slow GDP report is unlikely to change that view.
    • Brazil ETFs: EWZ, BRF, BZF, BRXX, EWZS, BRAQ, BRAZ, BZQ, BRAF, UBR, BRZU, FBZ, BRZS, DBBR
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  • Dec. 2, 2013, 7:44 AM
    • Brazil's November PMI slips to 49.7 from 50.2 previously, the move into contraction territory led by New Orders which stayed below 50 for the 5th consecutive month.
    • "The only good news was that the measures of inflation included in the PMI report also lost momentum: firms saw input prices rising at the slowest pace since June and output prices climbing at the weakest rate since May," says HSBC's Andre Loes.Brazil's central bank raised the Selic 50 basis points to 10% late last week - but a tweak to the statement has some economists predicting just one more rate hike for this monetary tightening cycle (the Selic was 7.25% in April).
    • Brazil ETFs: EWZ, BRF, BZF, BRXX, EWZS, BRAQ, BRAZ, BZQ, BRAF, UBR, BRZU, FBZ, BRZS, DBBR
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  • Nov. 29, 2013, 1:27 PM
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  • Nov. 28, 2013, 4:06 PM
    • Producer prices fall in Brazil from September to October, registering their first M/M decline (-0.37%) since February.
    • In annual terms, factory gate prices rose 5.18% last month, significantly below the 5.81% growth observed in September.
    • See also: Brazil central bank hikes benchmark rate
    • ETFs: EWZ, BRF, BZF, BRXX, EWZS, BRAQ, BRAZ, BZQ, BRAF, UBR, BRZU, FBZ, BRZS, DBBR
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  • Nov. 27, 2013, 5:42 PM
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  • Nov. 21, 2013, 7:40 AM
    • Fifty-one percent say they are pessimistic about the president's policies, up from 22% when she took office in January 2011, according to a Bloomberg survey. Only 10% say the country can avoid a credit rating downgrade in the next year. Compared to other major global markets, Brazil - says the survey - is expected to offer one of the worst opportunities over the next year.
    • Moody's last month followed S&P in lowering it credit outlook on Brazil to stable from positive, citing the 59% debt-to-GDP ratio compared to 45% median for other countries with the same rating.
    • The central bank has boosted the benchmark Selic rate by 225 basis points since April to 9.5%, and shows no sign of stopping this month.
    • That's a lot of bad news and bad sentiment. In the meantime, the stock market has fallen and can't get up. EWZ is off 15% YTD and about 40% from 3 years ago (and down 0.4% premarket). Opportunity?
    • Brazil ETFs: EWZ, BRF, BZF, BRXX, EWZS, BRAQ, BRAZ, BZQ, BRAF, UBR, BRZU, FBZ, BRZS, DBBR
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  • Nov. 18, 2013, 10:26 AM
    • Initiating cautious coverage on 8 Brazilian retail sector names (7 Holds, 1 Sell), Citigroup says multiples look expensive considering macroeconomic headwinds - among them rising inflation and interest rates coupled with a high level of consumer indebtedness.
    • "Slower demand presents top-line risks for Brazilian retailers exposed to the mid- and lower-income segments. Moreover, inflation could push operating expenses up while rising interest rates pressure financial costs for leveraged companies."
    • The central bank hiked the Selic for the 5th straight meeting last month and gave no indication it's going to break the string in November.Brazil ETFs: EWZ, BRF, BZF, BRXX, EWZS, BRAQ, BRAZ, BZQ, BRAF, UBR, BRZU, FBZ, BRZS, DBBR
    | Comment!
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EWZ Description
The iShares MSCI Brazil Capped Index Fund (the “Fund”) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the MSCI Brazil 25/50 Index (the “Underlying Index”).
See more details on sponsor's website
Country: Brazil
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