Forecasts for a 20% Brazil Stock Rally Ruined by High Rates
- Ibovespa’s tumble is making stocks cheap relative to peers
- But investors are staying away as the budget deficit grows
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The start of the Federal Reserve’s easing cycle was supposed to be the long-awaited catalyst to ignite a rally in Brazil’s stocks.
Banco Santander’s local unit predicted the Ibovespa gauge would rally almost 20% this year. Analysts at Bradesco BBI saw similar gains. Bank of America favored Brazil over Mexico amid estimates for slowing US growth, while Banco Itau BBA forecast a banner year on the back of attractive valuations and earnings growth.