The Ibovespa returned to the level of 120 thousand points in the last week of March, showing that the Brazilian stock market remains detached from international trading sessions. For analysts, what has been sustaining this appreciation are the shares of commodity companies. These papers have been riding the wave of rising prices due to rising international prices and rising demand after the outbreak of hostilities in Ukraine. In addition, good quality papers are still cheap when compared to their peers, which maintains the attractiveness of the exchange.
According to Mirae Asset analyst Pedro Galdi, the 28% appreciation in Vale shares and 15% in Petrobras shares support the 15% appreciation of the Ibovespa in the year. “The weight of these companies is high in the index. And they went up because of further increases in commodities after the start of the war,” Galdi said. However, other papers in the sector have been showing lower performances. For example, Gerdau’s shares rose 11% and CSN’s rose 6%, much less than the index. “There are still a lot of bargains, which should get more attention when the economy recovers,” he said. “Animal protein companies, which have been recording good profits and benefiting from strong demand, have not behaved so well,” said the expert.
For Guide Investimentos chief analyst Fernando Siqueira, the pandemic has changed the parameters for investments. “Companies hardest hit by store closures and rising interest rates are likely to recover faster as restrictions ease,” he said. According to the broker, tourism companies are promising. “CVC, for example, suffered a lot with the cancellation of trips. But it should be recovering this year.” Siqueira stated that commodities are doing well in general and this should continue, but this scenario is already reflected in quotations.
“After looking at banks and mining companies, foreign investors should start looking at other sectors, and the bargain hunt will continue” Pedro Galdi investment analyst at Mirae Asset.
OPPORTUNITIES Commodities, steel and proteins are obvious sectors, even in the international scenario. However, there are also opportunities in retail, which has suffered the closure of stores in the pandemic. Despite the rise in interest rates, the economic recovery continues to sustain papers such as Carrefour, which rose 42% this year, Petz, with a 17% increase, and Renner, with a 15% increase. “In the hunt for bargains, retailers draw the attention of investors, with the entry of new resources such as the anticipation of the 13th salary of civil servants”, said Galdi. Bank shares also promise good returns, as they are widely traded and therefore interesting for foreign investors. In the year, Itaú Unibanco rose 33%, the holding company Itaúsa, Banco do Brasil and Santander rose around 24% and B3’s own shares rose 42%. The industry, on the other hand, has reacted more slowly. Companies like Weg and Randon advanced about 4%.
Are there sectors to avoid? Who should not react so soon are the developers. Home sales depend on credit, and high interest rates affect business a lot. Education companies are also unpromising, as increasing digitalization requires heavy investment. Meanwhile, abundant rains have brought refreshment to electric companies, important in the index. Equatorial rose 22%, Taesa advanced 21% and Cemig appreciated 15%. And rates remain high, fattening the cashiers of these companies. “Foreign capital keeps coming. After looking at banks and mining companies, outside investors should start looking at other sectors, and the bargain hunt will continue to support the rise in B3,” said Galdi.
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