Fund managers in Latin America are more concerned about plans for Brazilian fiscal policy after the elections, and more of them expect the financial market to react to the results of polls by the election, Bank of America poll showed. for August released this Tuesday (16).
About 75% of respondents said they expect repercussions on financial assets from the election poll numbers, against less than 70% in the July report.
At the same time, more than 60% said they were concerned about post-election fiscal policies, compared with less than 40% in the previous poll. On the other hand, the percentage of those who said they were concerned about the current fiscal situation dropped from more than 40% to close to 20%.
BofA asked if managers are worried about the elections in Brazil, and more than 60% of the answers were no, above the number of about 45% found in July.
STRATEGIES
Softer inflation readings in Brazil and the US and the prospect of the end of the cycle of high interest rates here triggered a rotation towards strategies in growth assets, with managers in Latin America more optimistic about the Ibovespa and seeing the dollar still in a range recent.
The financial sector is the one in which investors are most “overweight” — that is, with above-average allocations — followed by discretionary consumption.
“However, higher US rates remain the biggest tail risk, and investors continue to favor high quality/value strategies,” BofA said in a report.
In general, respondents are more optimistic about the Ibovespa, with 80% of survey respondents seeing the main Brazilian stock index above 110,000 points at the end of the year, compared to 45% in July.
But China could be a headwind, with most responses in the survey revealing expectations that stimulus in the Asian country will not lift commodity prices.
On the exchange side, most expect the dollar to be between R$4.81 and R$5.40 at the end of this year. The breakdown of the data shows that more than 45% of those surveyed project a dollar between R$4.81 and R$5.10, while about 40% see a rate between R$5.11 and R$5.40.
The alternative bet on a higher dollar — between R$5.41 and R$5.70 at the end of the year — plummeted from around 25% in July to less than 10% in August.
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