Press "Enter" to skip to content

Brazil’s stock market is getting closer: JPMorgan

(Bloomberg) – The slide that made Brazil the world’s worst-performing stock market this year may be due to a reversal, according to JPMorgan Chase & Co.

Most Read from Bloomberg

“The market offers an interesting entry point, perhaps the best we will find in a while,” Emy Shayo, the bank’s head of equity strategy for Latin America, wrote in a report Tuesday. “If this is not a fund, it sure looks like it.”

After losing 10% this year, the Ibovespa index is trading at about 8 times future earnings, close to the lowest valuation in a decade for Brazil’s benchmark index. The equity gauge has leaned into a bear market in recent days due to doubts about the country’s commitment to fiscal rules, and investors anticipate that additional government spending will put pressure on inflation, which is already far behind. above target, and it will lead to higher interest rates.

While analysts may cut earnings forecasts further and higher interest rates will hurt stocks, there is already too much negativity in the market, Shayo wrote.

A key support could be the continued inflows of foreign capital. Foreign investors had invested 11.7 billion reais (US $ 2 billion) in the local market this month through Oct. 22, after a net outflow of 5.7 billion reais in the third quarter. Just last week, the worst for the Ibovespa since the start of the pandemic, foreign investors added 1.2 billion reais, excluding inflows from stock offerings.

Earlier this week, BTG Pactual strategists led by Carlos Sequeira also reiterated their overweight recommendation for Brazil within the bank’s Latin America portfolio.

“We believe that the relative valuations already reflect, to a greater extent, the most stressed scenario,” they said.

Nota Original:JPMorgan Says World’s Worst Stock Market Is Nearing a Bottom

Article Source

Disclaimer: This article is generated from the feed and not edited by our team.