{"id":10692,"date":"2025-09-09T20:43:13","date_gmt":"2025-09-09T20:43:13","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/10692\/"},"modified":"2025-09-09T20:43:13","modified_gmt":"2025-09-09T20:43:13","slug":"arx-sees-best-time-to-buy-brazil-markets","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/10692\/","title":{"rendered":"ARX sees best time to buy Brazil | Markets"},"content":{"rendered":"\n

\u201cThe time to buy is now,\u201d says a confident Gabriel Leal de Barros, chief economist at ARX Investimentos, who sees room for a significant rally in Brazilian financial assets this year. The reason, he explains, is the 2026 presidential election, which, while still distant, has already taken center stage in discussions among local market participants. \u201cIt\u2019s early, but everyone is trying to catch this trigger for asset appreciation. Foreign investors as well.\u201d <\/p>\n

That view has led ARX to take bullish positions in Brazilian assets, with a preference for equities and nominal interest rates. \u201cThe market is light. The industry has faced so many redemptions and bankruptcies that it helps explain why, for example, the stock market is trading one to two standard deviations below its average. Equities are very cheap; local investors are underexposed; and foreign investors still have little exposure to Brazil. First, they\u2019re trying to understand what\u2019s happening before committing capital,\u201d he said. <\/p>\n

\u201cThis influenced our decision to move in early,\u201d Mr. Barros emphasized, warning that \u201cthe door will be narrow\u201d when the trigger for an electoral rally is pulled. In his view, that trigger could be the confirmation of the opposition candidate in next year\u2019s presidential race. In ARX\u2019s base case, S\u00e3o Paulo Governor Tarc\u00edsio de Freitas (Republicans) is currently the best-positioned figure. <\/p>\n

\u201cWhen the trigger comes, people will scramble to buy stocks; prices will explode, regardless of whether he wins or not. The election itself is a game for October 2026. But from November until September, markets will trade on this, and it will be massive, a very strong appreciation,\u201d he said. <\/p>\n

Treasury builds cash buffer for 2026 with faster bond issuance<\/a> <\/p>\n

Mr. Barros\u2019s scenario assumes that former president Jair Bolsonaro will be convicted this month in the Federal Supreme Court trial over the coup plot<\/a> and imprisoned by November, at which point he would have to pick a successor to inherit his political capital ahead of next year\u2019s election. With the view that an opposition government would implement a more disciplined fiscal framework than the current administration, Mr. Barros sees potential for a rally based on expectations of a shift in economic policy starting in 2027. <\/p>\n

\u201cWe\u2019re moving early because of this. The market is light, so the time to build positions is now. Of course, there\u2019s the external scenario, Trump, a lot of moving parts\u2026 But all else equal, we\u2019re going to see wild euphoria,\u201d he said. \u201cIt won\u2019t be linear. We know there will be volatility, but the idea is to hold our breath and hang on. Fortunately, we can do that because we have a lot of foreign liabilities, but retail-heavy managers may not be able to. Foreign investors understand this. Their patience threshold is higher.\u201d <\/p>\n

The firm\u2019s conviction in equities and nominal interest rates does not extend as strongly to the currency market, where ARX has taken a more tactical approach. The asset manager even sees room for a short-term spike in the dollar against the real, partly on the expectation of heightened diplomatic and trade tensions between Brazil and the U.S. if Bolsonaro is convicted. \u201cThere could be another Magnitsky application, and then the dollar may spike. When that happens, we\u2019ll close the position. It\u2019s very tactical and very short-term,\u201d he explained. <\/p>\n

\u201cOur larger allocation is in nominal interest. We\u2019re invested in the pre-fixed curve,\u201d said Mr. Barros, adding that real rates carry more risks at the moment. \u201cNominal rates are still stretched. With the fiscal policy we have, it\u2019s harder for real rates to fall. So that\u2019s our bet. And in equities, we\u2019re always waiting for the best moments to increase long positions. Every time the market corrects, we add exposure.\u201d <\/p>\n

Still, while ARX\u2019s scenario centers on expectations of a government change, Mr. Barros believes next year\u2019s election will be competitive. He noted that President Lula\u2019s recent improvement in approval ratings<\/a> has been driven by food price disinflation, a trend not yet fully passed through to consumers. In addition, he said the improvement in financial conditions could further boost the government\u2019s popularity. <\/p>\n","protected":false},"excerpt":{"rendered":"\u201cThe time to buy is now,\u201d says a confident Gabriel Leal de Barros, chief economist at ARX Investimentos,…\n","protected":false},"author":2,"featured_media":10693,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[72,61,60,123],"class_list":{"0":"post-10692","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-markets","8":"tag-business","9":"tag-ie","10":"tag-ireland","11":"tag-markets"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/10692","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=10692"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/10692\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/10693"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=10692"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=10692"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=10692"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}