After a period of great concern with the direction of public accounts, the stock market takes advantage of the policy truce to rebuild part of the ground lost in recent weeks. Without neglecting caution, Ibovespa gradually moves back to the psychological mark of 100 thousand points, in a movement that benefits from favorable signs of economic activity and a positive view on the results of companies.
In the absence of new noise in Brasília, the Ibovespa closed up 0.84%, at 99,334 points, very close to the day’s high of 99,571 points. With this result, the index would only need to rise another 0.67% to resume the 100 thousand points mark, which has not been hit since September 17, when the stock market closed at 100,097 points. The financial turnover was R $ 20.5 billion, in line with the daily average for the year.
This time, the main highlights in the session came from specific cases, such as the 9.2% appreciation in JBS common shares. The company reported that it had cleared legal disputes with American authorities in a series of agreements ranging from competition issues with its subsidiary, Pilgrim’s Pride, to factors related to the awarding of its controllers, the brothers Joesley and Wesley Batista.
According to analysts, the agreements help to remove relevant problems that had been weighing on the company’s prospects and make it possible to list shares of Seara and the group on a US stock exchange.
Today, the most important stocks on the Ibovespa have had more mixed results. In the banking segment, Banco do Brasil ON increased 0.64%, while Bradesco ON (0.21%) and Bradesco PN (0.10%) increased. Itaú Unibanco PN fell 0.29% and Santander units gained 1.23%. Petrobras’ ON shares fell 0.60% and PN fell 0.76% despite the increase in oil prices.
More generally, managers and analysts see a less tense business climate and are now assessing other factors that had been overshadowed by political turmoil. The “political stress scared the market and the Ibovespa dropped to 93,000 while the S&P 500 was at its peak.” “It was, once again, Brazil missing out on opportunities. But now there is a growing realization that the post-election period will not be pandemonium with the end of fiscal discipline, as was once thought. It will not be wonderful, but it will not be as bad as it was feared ”, says Rodrigo Galindo, Novus Capital manager.
In fact, the Ibovespa is heading for a month of recovery, after being well behind global exchanges in previous periods. To date, the index has accumulated a 5% increase in October, after losses of almost 5% in September and 3.44% in August.
“Looking at the stock market as a whole, the index itself is interesting. Banks are well discounted and have been very conservative with provision. I do not believe that they will show great results in the middle of the pandemic, but they may start to see a change in mood in the market ”, says Galindo. In addition, the reopening in several locations around the world favors commodity stocks, which should also contribute to large shares on the Ibovespa, such as Vale and Petrobras. “For the index itself, we are excited. We see ‘upside’ for the index. The market may go to 110 thousand points or 112 thousand points later this year. It is a good target price for 2020 ”, he adds.
The Safra Corretora analysis team, for example, continues with the projection of 112 thousand points for the Ibovespa at the end of the year. This scenario is conditioned both to new developments related to the control of the pandemic and to respect for the spending ceiling and, consequently, the sustainability of public accounts. In a medium-term view, a resumption is also expected.
“In this sense, the perspective is for the resumption of profits in the coming years. The Safra Corretora analysis team recalls that the earnings per share of the companies that make up the Ibovespa was R $ 7,045 last year and should drop to R $ 4,864 this year due to the effects of the pandemic, but, starting next year , the indicator should resume growth, with earnings per share of R $ 7,510 in 2021. For 2022, Bloomberg’s market consensus projects a profit per share of the Ibovespa of R $ 9,680 ”, they say.
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