cuts in rates could bring the Bovespa to 35,500 in a year. Stocks in banks, petrochemical companies and food processors are among the ones most likely to lead the gain.
Equity Strategists: Brazil Index to Rise to 32,000, HSBC Says
Sept. 6 (Bloomberg) -- Alexander Ian Carpenter, equity strategist for Brazil's second-largest private banking unit, expects the Bovespa index to rise 12 percent by yearend, spurred by lower interest rates and corporate profits.
Brazil's benchmark stock index is likely to rise to 32,000 by the end of December, from 28,522 yesterday, as the central bank cuts interest rates starting this month, said Carpenter, who oversees 6 billion reais ($2.57 billion) in assets for HSBC Bank Brasil SA's private banking area.
``Lower rates and good corporate results will be the main triggers'' for the Bovespa, Carpenter said in an interview yesterday in Sao Paulo. ``Brazilian companies' cash flow is really strong.''
The Bovespa index has gained 12 percent since mid-June, when the central bank held its benchmark interest rate steady, after nine months of increases. With inflation falling closer to the central bank's target of 5.1 percent this year, monetary policy makers will be able to cut rates by 0.25 percentage point at their meeting this month, Carpenter said.
The rate, at 19.75 percent, is the highest since October 2003. It may fall to as low as 15 percent by December 2006, Carpenter said.
Carpenter's forecast for the stock index is above the 30,000 level expected by yearend by Demosthenes Madureira de Pinho Neto, head of Unibanco Asset Management, Brazil's sixth- biggest asset manager, with $12 billion of stocks and bonds, according to an August interview.
Annual inflation slowed to 6.02 percent in August, its lowest level in 15 months, from 6.57 percent in July, the government said today.
Additional cuts in rates would help bring the Bovespa index to 35,500 in 12 months, Carpenter said. Stocks in banks, petrochemical companies and food processors are among the ones most likely to lead the gain.
To contact the reporters on this story:
Telma Marotto in Sao Paulo at Tmarotto1@bloomberg.net;
Last Updated: September 6, 2005 10:45 EDT |
