Stock market should reach at least 150,000 points in 2023, says Bradesco BBI strategist

If the government elected on October 30 gives a signal to the market that it will adopt a fiscally responsible economic policy (with public accounts that do not increase the debt), the Central Bank may have space to start a process of cutting interest rates at from the second quarter of next year, with the Selic going to a level around 10% in December 2023.

In this scenario, the Ibovespa stock index could reach 130,000 points by the end of this year, and reach 150,000 by the end of next year, says André Carvalho, head of research and stock strategist at Bradesco BBI.

According to him, the high would be driven by consumer papers, such as Lojas Renner, Br Malls and Vibra, benefited by a probable rise in the real income of the middle class.

Carvalho says that the bank’s projection for the Ibovespa at the end of this year is today at 130,000 points —11% above the closing on Wednesday (5) — based on the forecast that there will be a reduction in the uncertainties brought about by the election. Inflation on a declining path will also contribute to the rise in stocks, predicts the expert.

“150 thousand points at the end of next year, starting from 130 thousand, corresponds to a 15% increase in the stock market, which is absolutely conservative”, says Carvalho, in an interview with Sheet.

The BBI strategist also says that the base scenario he works with today indicates a Selic rate of 11.25% at the end of next year, compared to the current 13.75%, but does not rule out the possibility of an even more aggressive cut. , with the basic interest rate around 10% in December 2023 — again depending on the fiscal stance to be adopted by the government.

“We should see a positive scenario for middle class consumption, which has been hit so hard in the last two years, and which is finally seeing real wages recover”, says the BBI strategist.

Carvalho also states that the first round of the elections served to make clear the population’s desire for an economic agenda with a conservative bias, given the predominance of the center-right profile among the elected candidates.

“The election is open, and either one of them can be elected, but in a scenario where Congress is conservative, the risks related to economic policy are lower”, he says.

According to him, with the contest for the presidency tighter than indicated by polls, the incentive for candidates Lula and Bolsonaro to bring more information about economic plans before October 30 increases considerably.

“The left is dominated by the candidate Lula, and the right, by the candidate Bolsonaro. The center is the place of dispute. Basically the southeast, I would say”, says Carvalho, adding that, in order to win the voter from the southeast, to bring more information about economic policies seems to be a good path to be followed by the two candidates for the presidency from 2023 onwards.

Projection is for the dollar at R$5 at the end of the year

The BBI strategist also says that he projects the dollar around R$5.00 at the end of this year, with the reduction of uncertainties about the elections and the process of deceleration of inflation contributing to the exchange rate having an adjustment over the next few years. weeks. This Wednesday, the currency closed trading at R$ 5.1870.

Carvalho also states that the bank’s internal calculations indicate an even lower balance value for the dollar, around R$ 4.50, but that this level should be more difficult to achieve. This is because of the global environment permeated by uncertainties, with a growing risk of recession in the United States and Europe, and doubts that still hang over when a resumption of China will consistently come.

The expert says that, in this international scenario that demands caution, Brazil may begin to attract growing interest on the part of foreign investors.

“Foreigners look for markets they call value, which are markets that are cheap and already have a high degree of risk. And Brazil is certainly one of those markets. The Brazilian stock market is deep, broad, and highly discounted. [com preços subavaliados].”