Brazil Equity Upside Tops Russia: UBS

Brazilian and Russian equities are trading at roughly the same P/E and P/B ratios, but the fact that Brazil is lower risk, thanks to its higher quality macro policies, makes it a more attractive investment, according to UBS Pactual. A recent selloff in Russia does not provide a buying opportunity, says the shop, which argues it is unlikely the country’s stocks will outperform other EM in the coming 3-6 months. Brazilian oil stocks like Petrobras, however, do present upside because of the growth profile, and any recovery in GEM energy stocks will give Petrobras a bigger lift than Russian companies, says UBS. Petrobras’ stock is trading around BRL33.00, some 37% off its historical high of BRL52.51 hit on May 21 2008.