Gafisa - A Strong Brazil Play

We are reiterating our Buy recommendation on Gafisa S.A. (GFA). We have been encouraged by the stimulus package and the new value-added tax relief recently announced by the Brazilian government.

First quarter 2009 results were positive considering the international crisis, which has affected Brazil’s construction sector. The new Government Housing Program and the R$600 million debenture from Caixa Econômica will help Tenda to expand its business plan for the development of projects in the lower income sector.

Throughout its first 50 years, the company has realized more than 800 enterprises, including luxury residential condominiums, commercial buildings, flats and shopping centers. In total, those properties add up to around 9 million square meters of constructed area in Rio de Janeiro and São Paulo.

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