Citi Raises Bovespa Year-End Target

Now that LatAm equity markets have bounced, Citi sees volatility setting in, but its top pick is still Brazil. “We retain our mid-2008 Bovespa target of 70,000, but we are raising our end-2007 target from 54,000 to 57,000,” says Citi. The Bovespa closed Monday at 54,340. Within Brazil, Citi raises industrials to overweight from neutral and goes further underweight in energy. It remains overweight in materials, financials and utilities. Citi also says it is replacing Aracruz on its focus list with CSN; while adding beef producer JBS. Elsewhere, the shop is neutral Mexico, which it sees as highly vulnerable short term to further weakness in the US and Mexican economies. It also has Peru at neutral and Chile underweight. “We believe the bull market is intact and volatility will subside,” the shop concludes. LatAm equity markets have jumped 15% in just seven days from the August 16 low, according to Citi.