Brazil is currently mired in a crisis that has attracted the attention of the IMF.The BRIC country has been having an economic crisis for the last five years and its now on a recession. Its economy has tanked 3% and its credit rating reduced to junk status. Its stock market has also lost 45% of its value. It is driven by investor fears in the South Americas biggest economy future.
The BM&F BOVESPA has seen it fall from its past glory as one of the largest stock exchanges in the world to today when it’s a mirror image of the struggling economy. One of the most iconic companies in Brazil Petrobras has seen its shares tank by 30% in the last few weeks thanks to corruption cases in its management. It has led to notable arrests and has sucked in the ruling parties senior members. It is a crisis like these that have made it difficult for the stock exchange to bounce back. The political leadership that has shown no ability to handle the crisis has been seen as a significant impediment. But political uncertainty is not the only problem. The commodities market has seen a significant drop due to falling demand from China. The demand is expected to be tempered for some time to come. This coupled with the summer Olympics of 2016 means Brazil will be in crisis for a long time if they don’t get their acts other.
Many experts feel the battered stocks could be just what any investor’s needs. Analysts point to a promising future that will make Brazil great again. It is the largest country on the continent and has one of the biggest populations in the world. It is also incredibly blessed with natural resources and is currently seeing massive investments in infrastructure. It is these facts that are encouraging long-term investors to take a deep dive into Brazil.
Brazilian investor Banker Igor Cornelesen of disqus is bullish on the future of the country. He admits the short term look of the country is bleak, and there will be losses in the near future but going forward everything is going to be okay. He says one should always invest with the future in mind, and we should all diversify its portfolio. He says that the best bet for the future is on the ten largest Brazilian banks that are expected to fuel the countries growth.
Igor Cornelsen also expects with the promise of a brighter future to increase more confidence in the local currency. The undervalued currency has seen Brazilian companies get valued at half their market capitalization. The national oil company is now valued less than the Colombian oil company.