BUENOS AIRES/MEXICO CITY (Reuters) – Brazilian shares are expected to continue rising this year despite mixed company results as food exporters feel the pinch of slowing global growth while banks take advantage of higher interest rates, a Reuters poll found. Showed
The Bovespa stock index has again moved towards the 110,000-mark in recent weeks, which is close to its average level since the end of 2021 after the COVID pandemic subsided. The gradual upward trend will continue in the coming months.
Local shares will gain 8.9% to 120,000 on Monday’s close from 110,213.12, according to the average estimate of 12 market strategists surveyed on May 10-18. This would mean a total increase of 9.4% in 2023.
“The quarterly results are far from ideal (…) Even the most protected sectors such as raw materials are suffering from the global recession, resulting in low demand for Brazilian assets,” said Alexandre Jung, director of Aqua Vero.
This month Brazil’s JBS SA, the world’s biggest meat company, as well as poultry and pork processor BRF SA posted worse-than-expected results, citing higher grain costs and oversupply in their markets.
At the same time, high prices for crops destined for animal feed, such as soybeans – one of Brazil’s main exports – are no longer enough to boost the balance sheets of agri-food companies facing weak Chinese demand.
On the other hand, Brazilian lenders such as Banco do Brasil SA and Itau Unibanco Holding SA remain very attractive, thanks to their large loan books and better rate spreads stemming from the local central bank’s aggressive anti-inflation stance.
Brazil’s high benchmark interest rate, which currently stands at 13.75%, is helping financial firms earn huge margins. However, it is stalling the economy and causing tensions between the central bank and government officials who want faster growth.
Still, a deal between the two sides should eventually lead to an easing of monetary policy, which is likely to lift Brazilian shares. In the survey, the consensus estimate for the Bovespa index at the end of next year was 131,500 points.
In Mexico, whose economy is enjoying a good period in contrast to other problems in Latin America, the S&P/BMV IPC stock index is expected to rise 7.5% to 57,475 by the end of the year, up 18.6% from It is increased. In 2023.
