The Brazilian capital market changes every year. That’s why understanding how it works is essential for international investors to know how to invest in Brazil. When you consider the progress made with the tokenization of assets, understanding applications such as CRI and shares in the Brazilian market becomes even more important for understanding the national scenario. In addition to greater chances of good returns, the investor is more likely to understand the dynamics of the Brazilian financial sector and act better in the scenario. It will therefore be up to the investor to assess whether the scenario of a particular investment is interesting for their idea, by understanding the entire financial structure.
Main Financial Instruments in Brazil
Bills of credit, such as LCI and LCA, and Receivables Certificates, such as CRI and CRA, are some of the main financial instruments in the Brazilian capital market. Along with them, there are other very important ones that should be checked carefully to ensure the best choice in investments. Get to know them:
CRI (Certificate of Real Estate Receivables)
CRIs are fixed-income securities in which investors invest their money in the real estate market without having to obtain any real estate. These investments are issued by securitization companies and backed by receivables in the real estate market. Once the transactions have been completed, the investor will receive the amount invested plus the agreed remuneration.
CRA (Certificate of Agribusiness Receivables)
CRAs are fixed-income securities backed by existing agribusiness loans. Thus, this investment is responsible for financing agribusiness market participants such as companies, rural producers and cooperatives. Like the CRI, the CRA is not covered by the FGC, but is exempt from income tax.
LCI/LCA (Real Estate and Agribusiness Letters of Credit)
Both agribusiness letters of credit (LCA) and real estate letters of credit (LCI) stand out as very important fixed income instruments in the Brazilian capital market. In addition, they are safe and have a variety of rates of return (they can be prefixed, post-fixed or hybrid), both of which are exempt from income tax. It’s also worth mentioning that LCI and LCA are protected by the FGC, guaranteeing that up to R$250,000 can be recovered in the event of problems with the provider. As such, these options are widely chosen by those wishing to find profitable and safe fixed income options.
Debentures
Debentures are debt securities capable of generating a credit right for investors. Investors have the right to receive remuneration – usually based on interest – from the company that offered the debenture and the amount invested when the bond matures. As debentures are also fixed-income securities, investors can have an interesting predictability of how much they will receive in the future from their investments. In addition, debentures have a profitability that tends to be very attractive for those interested in the Brazilian capital market.
Shares
Shares are securities that represent portions of the share capital that a company or corporation offers. In this way, companies can offer these investment options to raise more funds and develop the business. Shares therefore vary in profitability according to the company that issues them. It’s up to the investor, therefore, to choose companies that they think are likely to grow in order to have a better chance of obtaining the desired results from their investments. Along with this, investors also need to pay attention to the possibilities that tokenization allows for those who want to get started in the stock market, but have not yet been able to delve deeper, such as the Ethereum ETF and the Bitcoin ETF. An excellent tip for international investors is to look for trends in the Brazilian capital market that they can pay more attention to. The crypto market, for example, due to its high take-up by participants, can be an excellent alternative for investors who don’t mind taking risks on market fluctuations in exchange for good chances of attractive returns in the digital asset scenario.
Investment Structures in Brazil
FIDCs, FIIs and FIPs are some of the main investment structures in the Brazilian capital market. Therefore, checking out each of these structural forms is indispensable for international investors who want to increase their accuracy in Brazilian investments.
FIDC (Credit Rights Investment Fund)
The FIDC is a form of investment made through an open condominium. This means pooling the resources of different investors interested in investing in credit rights, as it makes it easier to obtain investments and allows each investor to know their contribution quota. In this way, shareholders can redeem their shares in accordance with the provisions of the fund’s regulations, and 50% of the fund’s net assets are allocated to credit rights. Because of these characteristics, FIDCs are great resources used mainly for securitization in the Brazilian capital market.
FIIs (Real Estate Investment Funds)
FIIs are funds that allow investment in the real estate sector indirectly by a group of interested investors. This brings together a group of investors to pool resources for real estate assets, all managed by a financial institution.
FIPs (Equity Investment Funds)
FIPs, on the other hand, offer investors the chance to invest in closed companies, open companies and even limited companies that are still developing. With this interest in companies at an early stage, the rates of return tend to be much higher, along with the risk, but with the possibility of making excellent gains if the projects invested in yield well with their potential for innovation. Therefore, understanding this wide variety of concepts in the Brazilian capital market is indispensable for investment advisors who want to maintain a consistent presence in the digital asset scene. In addition, getting to know other inventions in the fund market, such as tokenized funds, is excellent practice. With this, the advisor can see the impact of the tokenization of assets and the innovations that enabled the creation of tokenized funds, such as the blockchain system.
Why Invest in the Brazilian Capital Market?
The Brazilian capital market is showing great growth trends, especially considering the innovations provided by the tokenization of assets. With this context of the rise of digital assets and guidelines that are more focused on regulation, transparency and customer focus, the Brazilian capital market has strong potential to reach an excellent level in the coming years. Thus, relying on the solutions that we at BLOCKBR offer in the token scenario is the most appropriate choice for you, such as the BLOCKBR Whitelabel platform, for example. Create your account with us and check out the many possibilities of the blockchain tokenization market and all the preparation to deal with the demands of the digital asset!
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