Regarding the assets of the large Brazilian companies traded abroad, they reacted with the majority of losses. Bradesco SA fell 2.1% on Wall Street, followed by Vale SA (-1.5%) and Petrobras -0.5%. Embraer SA, against the odds, rises 0.5%.
Market analysts assure that the markets will react negatively but in the short term: “As daily government work resumes, attention must return to macro issues that have been gaining importance and slowly but surely micro-regulatory changes that are starting to gain more space in government discussions,” noted the JPMorgan team.
For the chief economist of Banco Fibra, Cristiano Oliveira, anti-democratic acts should not have a significant impact on financial market prices. “I believe that, when opening businesses, some negative reaction should occur, but that it should not last all day.” As a parallel, Oliveira points out that the invasion of the United States Capitol two years ago did not have a significant impact on prices either.
“The unrest could result in a lasting risk premium on the country’s financial assets, particularly if they cause President Lula to double down on his economic agenda,” said William Jackson, chief emerging markets economist at Capital.
The real and the Bovespa, which outperformed other emerging markets in Latin America for most of 2022, had already been hit by turbulence in the first days after Lula’s inauguration on January 1 over concerns. about increasing public spending.
“Given that the situation appears to be under control in Brasilia, I would expect any impact on the asset class to be short-lived.“, concluded Alejo Czerwonko, investment director for Emerging Markets in the Americas at UBS Global Wealth Management.
Source: Ambito
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