Brazil had managed to stay out of the loss movement in the international market, which reflected the escalation of tension between Russia and Ukraine. Since the war became a reality, however, on Thursday (25), there was no escape.
The Brazilian stock market, which had been on an uptrend, thanks to the foreign flow attracted by stocks linked to commodities and companies with clear profit forecasts, had its gains reduced. And the dollar, which came to close below R$ 5 this week, something that had not happened for over a year, rose again.
Does this mean that the positive moment for the Brazilian financial market is over? Not necessarily. But the tendency is for the devaluation of the real against the dollar to be accelerated.
In the last year, Brazil has had a massive injection of foreign capital — almost R$ 60 billion has already entered the Stock Exchange.
This flow also intensified due to the perception of specialists that the Brazilian stock market “is on sale”. “Foreign investors come here, buy a [ação] and takes five. The value of companies and shares is at a very high discount, so there is indeed an opportunity,” said Raphael Figueredo, from Eleven Financial, in a conversation with CNN economics analyst Thais Herédia.
However, the expert points out that it is not possible to say that Brazil will become a refuge. This is because, at the same time that there are “cheap” companies on the stock exchange, and companies linked to commodities — a sector that gains a lot from the high price abroad — there are also high interest rates when compared to other countries, which can intensify the flow for fixed income.
Thais adds that the word “refuge leads to a perception of security, and Brazil is not yet able to do that. It does convey a perception of a business opportunity, in which it brings together commodity companies, which will be very profitable, with one of the highest interest rates in the world.”
For Raphael, the opportunity for the Brazilian market to continue attracting investors will depend on the extent of the conflict in Ukraine.
“What calmed the market today was the realization that the war will not go beyond Ukraine’s borders. Any sign of change can change the flow again”, says the analyst.
The Brazilian financial market will be closed on Monday (28) and Tuesday (1) due to the Carnival holiday. B3 decided to keep the negotiation operation dates even with the cancellation of the parties.
“Caution should remain this Friday so that on days without business investors are not exposed to a worsening of the international scenario”, concludes Thais.
Posted by Ligia Tuon
Source: CNN Brasil
I am Sophia william, author of World Stock Market. I have a degree in journalism from the University of Missouri and I have worked as a reporter for several news websites. I have a passion for writing and informing people about the latest news and events happening in the world. I strive to be accurate and unbiased in my reporting, and I hope to provide readers with valuable information that they can use to make informed decisions.
