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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Wyätt Gwyön who wrote (40061)	9/18/2008 9:12:03 AM
From: elmatador	Respond to of 218005

Why there won't be a sudden drop and the BRL will operate along a certain band. Brazil was being used as a parking place for money. Once the need to cover positions elsewhere arrived, that money -parked in Brazil- flew out to cover that gap. That means the drop of the BRL, is not a flight to quality. The interesting thing is that the money that went out left a vaccuum in the stock market -see below- that is not justified. The nest step: Once that money that used Brazil as a parking spot, has left, the market stabilizes and will float along -moving sideays- within a certain band the one I menitoned in my previous posting. Elmatador a.k.a chief :-) Brazil's Stock-Market Drop Isn't Justified, UBS Strategists Say By Michael Patterson Sept. 18 (Bloomberg) -- The slump in Brazilian stocks isn't justified because the nation's ``solid' economy and ``healthy' financial system will bolster profits, according to UBS AG. The brokerage called Brazil its ``top pick' among emerging markets. The country's equities are ``oversold' and emerging- market funds are holding the fewest Brazilian shares relative to MSCI Inc.'s benchmark index since 1997, UBS strategists Pedro Batista and Eduardo Nishio wrote in a research note today. They recommended shares including Tam SA, the nation's biggest airline, and Centrais Eletricas Brasileiras SA, Latin America's largest utility. Brazil's ``solid domestic macroeconomic environment, healthy financial system, underleveraged companies and average good management should provide sustainable profitability, not justifying current price distortions,' the strategists wrote. The benchmark Bovespa Index has tumbled 38 percent from its May record as concern deepened that falling commodity prices and weaker demand from economies in Europe and the U.S. will hurt corporate earnings. Batista and Nishio said they prefer ``domestic-linked' stocks and recommended an ``underweight' position in commodity producers, meaning investors should hold fewer of the shares than are represented in benchmark indexes. Separately, UBS raised its recommendation on Chinese stocks to a 4 percent ``overweight' and downgraded South Korean equities to ``underweight' from ``neutral.' To contact the reporter on this story: Michael Patterson in London at mpatterson10@bloomberg.net.