As Brazil continues to benefit from the return of growth and curbed interest rates and inflation, the Sao Paulo Stock Exchange has seen an unprecedented growth curve. In addition to achieving historical highs, the Brazilian stock market beat the performance of some of the largest stock exchanges on the planet.
This means more people betting on Brazilian companies and the future of the country, according to a report from the Brazilian-American chamber of Commerce, Mercopress reported.
A survey made by the Brazilian government portal shows that the Ibovespa (the Benchmark index of about 60 stocks) saw the highest growth rates in the world in the first quarter of 2018. While the Brazilian stock market went up by 8.65% in Q1, the runner up in the list, Argentina, showed a high of 3.87%.
The figures also show that Brazil is bucking the trend of developed country stock markets, such as London, Hong Kong and New York, which faced bitter losses in those first three months of the year. For specialists, the government’s conduction of economic policy has been instrumental for this positive scenario in Brazil.
Austin Rating chief economist Alex Agostini assesses that the fall in interest rates, the recovery of the purchasing power of households and the resumption of economic growth were important factors in this process.
He explained that the fall in the benchmark interest rate (Selic), for example, reduces incentives for investments in public bonds and drives investors to the stock market, and foresaw a positive cycle forming in Brazil. “It’s a set of economic policies that have been working out so far,” he concluded.
For the chief economist at Futura Corretora, Pedro Silveira, the results presented by the companies, with larger profits, also generate optimism among investors. “If you take the foundations of the companies, they are doing very well,” he says. Analyst expectations regarding this “virtuous cycle”, is that the economy will continue to show positive progress, benefiting families and driving investment, jobs and income.
