Brazil's Planning and Budget Minister, Martus Tavares, is still undecided over whether or not to exempt stock trading from a financial transaction tax which currently stands at 0.38 per cent. It is widely thought that the move will provide a much needed boost on the stock exchange but the politicians just can't agree on the issue as some believe that it will reduce the government's tax revenue considerably.
This week Brazilian stocks ended at their lowest level for two years with the Sao Paulo Stock Exchange index losing a staggering 18.1 per cent. 'I've got 30 years market experience and I've never been through anything like this... and there's still no sign of a change in trend,' said Bonval brokerage director Celso Senise.
Key rating agency Standard & Poor's (S&P) also didn't help as it drove the Bovespa to a 30-month low with a statement blaming last week's US attacks for the damage to emerging economy stocks on international capital markets. 'The market was already bad with the persistent fear of the New York opening on Monday,' said Felipe Laier, equity analyst at Novacao brokerage in Sao Paulo. 'Then the S&P statement came out, and that made things even worse.'
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