HALISTER1: Brasil Unemployment to Remain High for a Long Period: CS

Brasil Unemployment to Remain High for a Long Period: CS

(Bloomberg) -- International experience suggests a low probability of the Brazilian unemployment rate declining to a level close to that of 2014 in the short term, according to a report signed by analysts led by Nilson Teixeira. 
  • Current recession in the country, one of the longest since 1980, has caused a highly negative impact on labor market conditions and the prospects of a merely gradual economic recovery suggest that recovery in the labor market will be even slower
    • “Return of unemployment rate to level of before start of recession depends on pace of economic recovery”
      • Report cites analysis of 123 episodes of recession in recent decades and concludes that “on average, the recovery in GDP growth and reversal of the unemployment rate to its level before the start of the decline in GDP occurred in seven and nine quarters, respectively”
  • NOTE: Brazil unemployment rate, known as PNAD, dropped to 13% in June from 13.3% in May and compares to 11.3% in June 2016, according to data from National statistics agency IBGE
    • July data will be released on Aug.31
To contact the reporter on this story: Leonardo Lara in Sao Paulo at llara1@bloomberg.net To contact the editors responsible for this story: Daniela Milanese at dmilanese@bloomberg.net Priscilla Murphy

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Nilson Teixeira (Banco de Investimentos Credit Suisse Brasil SA)

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UUID: 7947283

HALISTER1: Italian Summer Bond Rally Shows Signs of Ending as Supply Looms

Italian Summer Bond Rally Shows Signs of Ending as Supply Looms

(Bloomberg) -- The summer may be ending early for Italian bonds. After a European holiday respite that saw the nation’s securities in demand due to their comparatively high yields in otherwise thin trading, the market is showing signs of turning bearish.
  • Barclays Plc, JPMorgan Chase & Co. and BNP Paribas SA recommend going short Italian bonds ahead of planned debt issuance in the coming weeks and a potential move by the European Central Bank to taper its asset-buying program
  • To read the full story, click here
To contact the reporters on this story: John Ainger in London at jainger@bloomberg.net; Stephen Spratt in London at sspratt3@bloomberg.net To contact the editors responsible for this story: Ven Ram at vram1@bloomberg.net Scott Hamilton

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
BARC LN (Barclays PLC)
2539Z GR (European Central Bank)

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UUID: 7947283

HALISTER1: Brazil’s Eletrobras Privatization Is Market Friendly: Safra

Brazil’s Eletrobras Privatization Is Market Friendly: Safra

(Bloomberg) -- Move represents a major catalyst for the stock, Safra expects positive market reaction, says bank in report signed by Kaique Vasconcellos.
  • Eletrobras has an inefficient cost structure and privatization may create great value for shareholders
  • Looking only at cost structure, a 20% cut means a potential NPV of 13b reais
  • Although it is hard to price-in 100% probability of this scenario, Safra reinforces outperform rating due to potential privatization of generation assets or the entire company, divestment plan and costs savings program
To contact the reporter on this story: Ana Carolina Siedschlag in São Paulo at asiedschlag@bloomberg.net To contact the editors responsible for this story: Daniela Milanese at dmilanese@bloomberg.net Priscilla Murphy

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
ELET6 BZ (Centrais Eletricas Brasileiras SA)

People
Kaique Vasconcellos (Banco Safra SA)

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UUID: 7947283