Brazilian markets are off to a strong start in 2019. And while worries about much needed structural reforms remain, a market-friendly government and supportive fundamental backdrop could make this year a doozy, according to bullish analysts.
The year is still young, but so far the real USDBRL, +0.0107% has gained 3.8% against the U.S. dollar, while the popular Bovespa stock index BVSP, +0.78% has rallied more than 9%. In dollar terms, the Bovespa is up 12.4% so far this month, versus a 6.6% rise for the S&P 500 SPX, +1.32% according to FactSet.
Just last year, Brazil’s contentious presidential election and worries about much needed structural reforms to shore up the country’s fiscal health curbed investor enthusiasm. Economists say the reforms are still needed, but sentiment seems increasingly supportive even before outspoken newly elected President Jair Bolsonaro takes the stage at the World Economic Forum in Davos, Switzerland, next week.
By Anneken Tappe via Market Wacth