The evolution of the Brazilian stock market and currency looks like a roller coaster, with valuations and rapid losses, which leaves Brazilian investors estranharem the movements of foreigners who invest in the country, says Bloomberg.
“Investors monitor the political foreign drama are betting that the dismissal of Dilma Rousseff is the only way to end months of political deadlock, allowing members to focus on economic development, but the staff watching closely to this novel knows that the process of removal is long and can be tricky, “writes Bloomberg.
” foreign investors are quick to pull the trigger, they are ready to invest or withdraw money according to the latest headlines, “explains Marcelo Mello, an analyst at SulAmérica Investimentos, noting that, on the contrary,” Brazilians are more cautious because they are seeing the crisis first hand and feel its effects every day . “
the strong variations in stock market indices and the Brazilian currency, explains Bloomberg, have been driven by foreign investment, since internally the market is practically stopped – recently this financial agency came to report that the issue of the beginning of the month debt was almost all purchased by foreign investors, demonstrating the difficulties plaguing the internal market.
Proof of the huge volatility in financial markets in Brazil is the fact that, despite to face its worst recession in more than a century and is expected to contract by 3.6% this year, following the 3.8% in 2015, the rates of exchange and currency are among the world’s best performances since the beginning of the year.
“After very significant sales in 2015, the Ibovespa and the real are experiencing the best gains in the world this year, with the debt to improve more than double compared to average of emerging markets and the credit risk to fall sharply, driven by the expectation that President Dilma Rousseff will be destitute and give way to a new government, “writes Bloomberg.
last week, example, the actions and the Brazilian currency rose the most in the world, following the appointment of ‘Lula’ da Silva for the government, not because the former head of state would ‘save’ the Executive but because their entry increased perception that Rousseff’s presidency was about to collapse.
“there are still many other things that need to happen, but I think that would react markets very positively to change and I think that there are advantages” in invest in Brazilian assets, said the financial manager Gregory Lesko, Deltec asset Management, based in new York
also Blackrock has begun to advise investments in Brazil since then:. “a new change, a complete change paradigm, will be very positive for an economy that has been in a severe recession, and the flip side is that Brazil is now very cheap and has a huge amount of value, “says Amer bisat, financial manager in the department of emerging markets.
“the biggest mistake that the markets are doing is to think that the removal will provide clarity in one way or another,” said an analyst at Eurasia Group following the Brazil from Washington.
“the notion that a new government can easily get around the crisis is overvalued,” concludes the analyst Christopher Garman, of Brazilian descent.
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