Stock market is cheap because it has already priced risks ahead, says Bradesco manager

Although the Brazilian Stock Exchange is still likely to remain under intense volatility in the short term amid discussions about the country’s political and economic scenario for 2022, at current levels the stock market already offers good opportunities for investors.

The assessment is by Philipe Biolchini, investment director at Bram (Bradesco Asset Management). For him, the prices of Brazilian shares already incorporate a good part of the risks foreseen ahead and, because of that, they are at “clearly” very attractive levels.

“The allocation in variable income has to be on the investors’ radar, despite all the volatility we’ve seen,” said the specialist, during an event by the bank’s asset manager this Wednesday (24). “Brazil seems cheap, it has a lot of negative news built in.”

In a report published this week, the American bank Morgan Stanley released a forecast of 120,000 points for the Ibovespa at the end of 2022.

The estimate incorporates an upside potential of approximately 16.5%, compared to the range of 103,000 points in which the Exchange index has fluctuated. In 2021, the Ibovespa retreated around 13%.

Among the main shares traded on the Brazilian stock exchange, analysts at the American bank cite names of commodities such as Vale, Petrobras, Gerdau and Minerva, in addition to Itaú and XP.

In the Latin America region, Morgan Stanley points out Brazil and Chile as the markets that should perform above the average of their peers in 2022, with a less favorable view for Mexico, Peru and Argentina.

Experts assess that risks that are currently on the radar of Brazilian investors, relating to the fiscal and energy rationing problem, may dissipate over the first quarter of next year.

And as the year progresses, Morgan Stanley’s forecast is that greater clarity about the elections and expected growth in 2023 should begin to weigh more heavily on market expectations.