Brazilian companies that depend most on domestic growth may rally despite their premium over stocks that benefit from commodities prices, JPMorgan Chase & Co. said.
Investors should remain “overweight” in industries such as real estate and banking as expected increases in borrowing costs may already be reflected in share prices, analysts including Emy Shayo Cherman and Ben Laidler wrote in a note to clients dated yesterday.
“While domestic names have tended to underperform before a first interest-rate hike, the global scenario doesn’t seem favorable to commodities,” they wrote.
Brazil’s central bank may increase reserve requirements when it begins raising interest rates in April, according to JPMorgan.
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