Riddle me this: When is it good news when an analyst slashes his price target for a stock by 55%? Answer: When that “reduced” target price still represents a 59% gain. That’s precisely the scenario facing Companhia Vale do Rio Doce (ADR: RIO), the world’s biggest iron-ore producer.
The risk of owning Brazilian government bonds fell to its lowest level since May 9, as ratings agency Fitch raised the emerging market’s credit rating to investment grade. This from Bloomberg:
Fitch raised Brazil’s foreign-currency debt rating to BBB-, the lowest investment-grade level, from BB+, matching a move made by S&P on April 30. The increase will give the South American country better access to capital markets because some institutional investors can only buy securities issued by countries with at least two investment-grade ratings.
Why The Smart Money Is Flooding Brazil. Here’s a challenge: Find me a more exciting investment story than Brazil right now. I guarantee you will fail.