Brazilian analysts vaccinate stock portfolios against coronavirus

In February, alarmed by the outbreak of the novel coronavirus and its potential effects on the economy, Brazil’s benchmark stocks index Ibovespa registered its worst monthly dip since 2018. For this month, analysts from some of Brazil’s main brokerage firms increased the defenses of their recommended stock portfolios. But despite the turbulence and uncertainty provoked by Covid-19, there is some residual optimism among some brokerages.

The unanimous opinion of analysts in Brazil is that the coronavirus outbreak is a source of volatility that is likely to rein in the country’s hopes for GDP growth. However, there is no consensus on exactly how big of an impact the spread of Covid-19 will cause. 

For XP Research, pillars such as low interest rates and the inflow of capital to variable income investments will remain intact. They believe that the coronavirus risk lies with companies, who could see their profit...