tirsdag den 11. april 2017

The appetite for Brazilian stocks and potential for interest rate cuts

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DAILY BULLETIN
Tuesday 11 April 2017
The appetite for Brazilian stocks and potential for interest rate cuts
by Adam Patterson | Equities | 8 mins. to read
Brazil
In a previous article on these pages, I examined the outlook for the Brazilian Stock Exchange – the Bovespa – and asked the question if it could sustain 2016's rally, which made it one of the best equity performers last year with an 80% year on year uptick in dollar terms (+39% in local currency terms). One of the key projected drivers of continued upside was the trend for aggressive  reductions in the Brazilian Central Banks' benchmark SELIC  (Special Settlement and Custody System) interest rate throughout 2017 as inflation expectations recede. This article will look at the relationship between the Bovespa and the SELIC in more detail and assess the potential investment opportunity.
 
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