Source: SF Gate
Brazilian stocks are among the cheapest in emerging markets and buying opportunities exist among financial and consumer companies, said Will Landers, manager of BlackRock Inc.’s Latin American equity funds.
“Financial services for us continues to be the best place to be in, both in absolute and relative terms,” Landers said in a Web conference held by Bloomberg Markets magazine. Consumer stocks also offer “good valuation,” he said.
The Bovespa entered a bear market on July 27 after plunging 20 percent from its bull-market peak in November. The measure extended that slide to 25 percent through yesterday. The index trades at 8.7 times analysts’ earnings estimates, near the lowest since February 2009, according to weekly data compiled by Bloomberg.
In the short term, Brazilian stocks may fall further because of increasing concern economic growth will falter from the U.S. to Europe, but the long-term trend should be positive, Landers said.
“Once the dust settles, Brazil should be one of the big outperformers,” he said.
Brazil is also “very far” from a credit bubble, despite recent growth in lending, Nilson Teixeira, head of Brazil economics research at Credit Suisse Group AG, said during the conference.
“Interest rates in the last six year have declined a lot,” Teixeira said. “And delinquency rates have increased a little bit in the last few months, but they are much lower than the figures we were seeing before the second quarter of 2010.”