Bank of America survey shows increased investor optimism towards Brazilian market

RIO DE JANEIRO, BRAZIL – A Bank of America (BofA) survey with asset managers showed that market expectations about the performance of the economy and Brazilian assets in the coming months is improving.

About 75% of respondents believe that the Ibovespa index should close the year over 130,000 points, against 42% the previous month, according to the “Latam Fund Manager Survey” released on Tuesday, for which 33 managers with approximately US$68 billion in assets under management were heard.

In addition, approximately 85% of respondents said they expect the Brazilian Real to trade below R$5.10 per dollar in December, compared to 30% in the previous survey.

BofA’s survey also showed that 55% of managers consulted expect Brazil’s Gross Domestic Product (GDP) to grow above 4% in 2021, up from 15% previously.

According to the bank, vaccination and the reopening of the local economy continue to be the main drivers of the improved investors’ mood in relation to the Brazilian market in recent weeks.

The survey also highlights that the sectors in which the funds’ portfolios have an above-average allocation at the moment are financial, followed by materials and discretionary consumption.

Also according to BofA’s survey, managers believe that for fixed income to start taking resources from the stock market, the SELIC rate needs to stand at least at 7% a year. The majority of respondents expect the SELIC to stand between 6% and 6.75% by December.

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