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Brazilian unfilled capital demand: Sectors, estimated risks and returns* Malcolm McLelland Nilson de Lima Barboza Valdir Jorge Mompean
* This presentation should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of
Equilibrio Capital. Marco Lyrio (Insper) and James Hunter (Green River Advisors and Business School Sao Paulo) provided a number of helpful conversations. All errors and oversights in the presentation are due to Malcolm McLelland.
:: Brazilian services firms with significant forex and cross-border risk exposures were damaged by the global economy beginning in 2008, but recovered easily because of domestic growth.
Economic data: Brazilian price level and foreign exchange (in)stability
:: Brazilian prices since 2004 are remarkably stable given forex volatility, but 2008 forex volatility severely damaged Brazilian SMEs with foreign-source production inputs selling to domestic consumers.
Capital market data: Brazilian equity and debt issuances
:: Brazilian public equity and debt markets are quite small relative to the size of the Brazilian economy, suggesting general capital constraints and high capital costs.
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