Whoever is elected, the Brazilian market will perform well, says André Esteves

For the senior partner and chairman of the board of directors of BTG Pactual, André Esteves, regardless of who emerges victorious in the Brazilian elections at the end of the year, the Brazilian market must undergo a price rally — a term used in the market to refer to a period of strong rise in stocks on the stock exchange and appreciation of the real, with a drop in interest rates.

He assesses that the prices of Brazilian assets are at very cheap levels in comparison with international peers, and that, after the uncertainty about the elections, investors will have a more constructive view and approach to the local market.

“These elections of ours are part of our institutional evolution. The electoral process was full of Manichaeism, good versus evil, and the market was extremely volatile. [Desta vez] the market is showing the lowest volatility in an electoral process since redemocratization”, said Esteves, during an event promoted by BTG Pactual this Thursday (18), in São Paulo.

According to the bank’s executive, due to the dialogues they have had with market peers, no one believes in any kind of “economic confusion in Brazil whoever wins the elections”, which contributes to the lowest level of volatility in the market in the last 30 years. . “This certainty is bringing this non-volatility, which allows planning with longer terms,” ​​said Esteves.

Also according to the banker’s assessment, despite the highly polarized dispute of the elections, the profile of Brazilian society in general is more center-oriented, whether center-left or center-right, than to the extremes of any one of the ideological camps.

The extremes make more noise and receive more media attention, but carry less weight than they might seem at first glance, Esteves said.

“I don’t see any foreigners worried if we have a transition of power in 60 days”, said the partner and founder of BTG Pactual, who said he was still “very calm” with the strength of Brazilian institutions. “No investment plan is being cancelled, nor will it be cancelled.”

The US central bank remains late in the fight against inflation and the market is living a fairy tale, says Esteves

Regarding the global scenario, André Esteves stated that, although the Federal Reserve (Fed, central bank of the United States) is with the monetary tightening process underway, it remains late in combating inflation in the region, which runs at the highest levels in 40 years old.

The BTG partner also said that the general behavior of global investors points to a market perhaps more optimistic than it should be with the scenario ahead, with an apparent expectation that the Fed will not have to raise interest rates so much and will manage to drive the economy. American market to only a moderate deceleration.

“It seems to me that [o mercado] it’s very fairy tale. [A economia americana] it will have to go through a tightening of financial conditions to actually bring inflation to the 2% target,” Esteves said. “The Fed has enormous credibility, but it will need some sacrifice. You won’t be able to cure the disease without taking any medicine.”

The banker also stated that, if emerging markets in general did not have massive bailouts by foreign investors with the beginning of the normalization of monetary policies in developed countries, this was because venture capital, which previously sought these regions in search of accelerated growth, has migrated in recent years to the technology business in the United States.

For no other reason, added Esteves, that Nasdaq, which focuses on technology stocks, sank almost 30% in the first half, with the flight of venture capital that was previously invested in emerging markets. “The US technology market is the new emerging market,” he said.