Institutional Investors Expect IBOVESPA at 135.000 Points by End of 2020

RIO DE JANEIRO, BRAZIL – Despite the start of a troubled year in the market, institutional investors remain optimistic about the Brazilian stock market.

According to a survey conducted by XP Investments, the median of 124 managers, economists and analysts projects that the IBOVESPA will close the year at 135,000 points, representing a high of about 15 percent over the current level. The survey was conducted between February 3rd and 4th. The projection is in line with a compilation made by InfoMoney early in the year with 11 trading houses.

In terms of exchange rates, an average of 120 institutional investors project a slight appreciation of the Brazilian currency, expecting the dollar to reach R$4.17 by the end of this year, while 20 of them expect the US currency to remain at a level between R$4.30 and R$4.50, while another 36 believe the currency could close the year below R$4.00.

Economy

According to the XP survey, 44 percent of investors expect the Broad Consumer Price Index (IPCA) to fall below the 3.47 percent projected in the Central Bank’s Focus bulletin of January 24th.

Another 36 percent said the figure is balanced, while 20 percent believe inflation could be higher by the end of the year. In this week’s Focus, economists have already reduced the projection to 3.40 percent.

As for the Gross Domestic Product (GDP), 46 percent of the surveyed investors believe that the result may be lower than last week’s Focus projection of 2.31 percent.

On the other hand, 18 percent of them project that the Brazilian economy may grow more than that, while 35 percent view this forecast as accurate. In this week’s Focus there was a reduction in the GDP projection to 2.30 percent.

Risks to the stock market

Among investors’ main concerns for the Brazilian market in the coming months, 50 percent pointed to the country’s growth, which will need to show consistent rebound figures in order to achieve greater optimism.

The coronavirus, which has been heavily impacting the stock market in recent weeks, was pointed out as a risk factor by only six percent of respondents. Meanwhile, the US election concerns 22 percent of investors, followed by local politics at 14 percent.

Source: Infomoney

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