A few days ago I have made a study regarding high yield fixed income 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 Exchanges.

When I heard of Brazil in the past I always thought of a devaluate currency, a struggling economy and a weak financial environment. After rating company Moody’s downgraded the Brazil to BB- in 1989 the consequences were far-reaching. However in the last decade the situation has dramatically changed and today Brazil is the continent’s most important economy and is becoming one of the most influent economies in the world. The Brazilian currency Real is the most valuated compared to 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 agriculture futures. Both exchanges have been merged recently into BM&FBOVESPA.

The spectrum of invest vehicles is rich and very well and closely regulated by the CVM (Comissao de Valores Mobiliarios).

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