2023-08-18 15:00:13
In just two weeks, the mood of the Brazilian market went from euphoric to gloomy.
The excitement over the Selic cut was aborted by the turnaround abroad.
There is a lack of new money to support the appreciation of the Ibovespa – but, according to a monthly survey by Bank of America, there is still hope.
According to the LatAm Fund Manager Survey, 88% of managers expect the Ibovespa to close the year above 120,000 points – an improvement over the 76% with this view last month.
The most optimistic – who expect the Ibov to rise above 130,000 – are now 41%, once morest 23% a month ago.
But waiting for the flow can take patience.
Most managers expect investors to rotate their portfolios from fixed income to variable (only) when the Selic rate drops to 10% – which, if the yield curve is right, should only occur in 2024.
In the assessment of managers, the biggest risk for the Brazilian Stock Exchange is the rise in interest rates in the US – and the number of managers with this assessment rose.
The bank notes that flow to emerging markets remains weak – with 90% of the positive flow going to China (and encountering bad news every day).
But BofA analysts maintain the view that the Ibovespa rally “has not come to an end.”
After the recent declines, the Brazilian Stock Exchange (excluding commodities) achieved the feat of increasing its valuation discount (vs. the historical average). In the last 30 days, this discount opened from 5% to 10%.
According to BofA, the Ibovespa in dollars – excluding commodity companies – now trades at a 12% discount in relation to other emerging markets. When China is removed from the comparison, Brazil’s discount goes to 20%.
International investors have withdrawn R$8 billion from B3 since the beginning of August – but the balance remains positive at R$14 billion since the beginning of the year. The big blow was in January, when international managers invested R$ 19 billion in net terms – since then, the monthly balance has been practically zero.
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