BANKING & FINANCE

Brazil’s state development bank may allow at least five local and foreign banking groups to take part in the creation of a 7 billion reais ($3.7 billion) fund to bolster investment in small- and medium-sized enterprises, daily newspaper Valor Economico reported (Reuters).

Brazil may earn the much-coveted investment-grade rating by Moody’s Investors Service in coming weeks, Finance Minister Guido Mantega said (Reuters).

Banco de Brasil, Latin America’s largest bank by assets, plans to open new branches and may consider acquisitions to expand in the U.S. “Banco do Brasil is interested in being where Brazilian communities are,” the Brasilia-based bank’s vice president for international business, told reporters in Sao Paulo (Bloomberg).

MERGERS & ACQUISITIONS

Grupo Pao de Acucar, Brazil’s largest supermarket operator, plans to use the 600 million reais ($318 million) it received to relax the terms of a consumer finance venture with lender Itau Unibanco  in acquisitions, Valor Economico said (Reuters).

The deal between Brazilian banking giant Itau Unibanco and insurance company Porto Seguro will pave the way for a wave of mergers and acquisitions in the domestic insurance market, a top industry executive told the daily Valor Economico (Reuters).

OIL

Brazil’s president proposed  giving the state more control over one of the world’s biggest recent oil finds in a high-stakes move that could drive the country’s development for decades to come (Reuters).

Lula’s plans for the development of the country’s offshore oil fields stripped Petrobras’ investors of $7 billion in a day (Bloomberg).

PORTS

DP World, the Dubai government-controlled port operator, said on Sunday it would acquire a majority stake in Embraport, a private Brazilian port in Santos, in partnership with Brazil’s Odebrecht (Reuters).

POLITICS

Brazil’s former environment minister Marina Silva took another big step toward an expected presidential bid by joining the Green Party, which wants to field her in the 2010 race (Reuters).

Brazilian President Lula da Silva plans to raise primary spending — expenditures before debt payments — by about 13 percent next year, earmarking more funds for health, education, defense and family stipends (Bloomberg).

STEEL

Vale, the world’s biggest iron ore miner, will build a $3.7 billion steel plant in Brazil’s northern state of Para after being criticized by the government for paring planned investments for this year, a Brazilian newspaper said (Reuters).