RIO DE JANEIRO, BRAZIL – The flow of foreign capital continues to supply the São Paulo stock market. In the first two weeks of December, almost US$1.6 billion has come in through foreign investors, according to the B3. On Friday, December 11th, over US$73 million was captured.
The international interest for Brazilian stocks is based on a number of reasons: 1) emerging markets with greater yield potential; 2) diversification; 3) highly depreciated assets; 4) investment rotation – when the first investments reach the targets and finding new assets is required.
Thus, Brazil is lowering the volume of foreign capital leaving the stock market this year. In October, the balance reached a negative R$89.1 billion. With the strong favorable flow in November and the continuity of this trend, although at lower levels, in December this deficit has already dropped to R$44.2 billion.
Not only does this help the stock market continue to climb and offset the pandemic year’s losses, it also helps ease the exchange rate. Since the flow reversed – from outflow to inflow – on October 7th, the dollar fell from R$5.62 to R$5.04 (rate on Friday, December 11th).