SAO PAULO, June 10 (Reuters) - Foreign investors are returning to Brazil, lured by the country’s weakening currency and rising interest rates amid ample global liquidity, a senior executive at Goldman Sachs Group Inc told Brazilian newspaper Valor Econômico.
Gary Cohn, Goldman’s president and chief operating officer, said in an interview published on Wednesday that a weaker real and rising borrowing costs are creating opportunities for global investors eyeing Brazil as a destination for their money. He was in Brazil for a two-day visit to Goldman clients.
Reuters could not confirm the contents of the Valor report with Goldman’s local media representatives on Wednesday.
The growing differential between Brazilian interest rates - the benchmark Selic overnight rate is nearing 14 percent - and global interest rates that are in some cases close to zero are making Brazilian local debt securities more attractive, Cohn told Valor.
In terms of mergers and acquisitions in Brazil, Cohn sees growing interest from global investors. Goldman is currently advising HSBC Holdings Plc on the disposal of its Brazilian unit.
Other sources of business in Brazil for Goldman include government debt trading, structured finance and what Cohn called “special situations,” like the purchase and sale of pools of loans gone sour, Valor reported.
Last week, Goldman decided to stop selling local products to private banking clients in Brazil, focusing solely on the placement of global products in which the New York-based bank has a competitive advantage.
According to Valor, Cohn is “happy” with Goldman’s current size and structure in Brazil. The unit is working on transactions involving debt restructurings and corporate reorganizations, offsetting an across-the-board decline in investment banking, he was quoted as saying. (Reporting by Guillermo Parra-Bernal; Editing by Jeffrey Benkoe)