After a dismal 2021, the Brazilian stock market began this year as an early winner, with its performance trouncing most major indexes around the world. Brazil’s Ibovespa is anchored on commodity-producing companies, which have seen share value soar as prices go up. Elsewhere, higher liquidity and a cheap currency also fuel the current momentum.
However, increasingly unfavorable domestic and international scenarios leave experts thinking that the current optimism could have an expiration date.
Ibovespa ended January 7.33 percent up, its best monthly result since December 2020 and something of a surprise, considering the index ended 2021 with a drop of almost 12 percent.
The good result can largely be explained by foreign participation, with USD 4.5 billion put in Brazilian stocks in January — a third of what the country recorded in the entirety of 2021.
The presence of foreign investors has even helped the exchange rate. The Brazilian Real has gained more than 5 percent against the U.S. Dollar and is the second-best...
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