Bovespa Flows Point to Recovery

Brazil’s stock exchange saw foreign investment inflows of BRL598m in the week ended February 26, according to Itau, which cites its own data and Bovespa numbers. That continues a trend of inflows that started in the previous week, and reduces the YTD net outflow to BRL4.057bn. The Bovespa jumped 5% in the same period, and is up by the same amount YTD. “We have seen a recovery trend in the foreign investment flow to the Bovespa, especially during February, after several January outflows,” says Itau. “This is definitely in line with the positive scenario we are forecasting for Brazilian equities.” However, externally, the picture appeared to worsen during the period. The Dow was down sharply Friday and Itau concludes that volatility will remain high for the foreseeable future.