Asset managers increasingly concerned about Brazil’s fiscal situation after election

Awaiting a decision in the second round of voting at the end of October, Brazil’s presidential election continues to be the focus of interest for asset managers in Latin America.

According to a Bank of America (BAC) survey, managers are concerned about Brazil’s financial situation after the election.

According to the U.S. bank’s monthly survey of managers, released Tuesday (18), the issue remains the focus of interest for more than half of respondents.

In addition, the percentage of those who said they were concerned about Brazil’s public finances rose from about 70% to almost 80%, especially after the elections.

Looking ahead, 66% of respondents see the main variable income index of the Brazilian stock market closing above 130 thousand points in 2023 – a potential high of 14.4% compared to Monday’s close (17).

This year, the Ibovespa (IBOV) is up 8.4%.

For Brazilian gross domestic product (GDP) growth, almost 60% of managers expect an expansion between 1% and 2% of activity next year.

According to the survey, the key interest rate is expected to fall but not as quickly as some expect.

Only 16% of managers see the Selic below 10% per year by year-end 2023; most see rates between 11% and 11.75% per year next December.

Currently, the Selic is at 13.75% per year.

With information from Bloomberg in linea