BlackRock Inc is buying Brazilian stocks that will benefit from the government’s attempt to weaken the real, while Goldman Sachs said that the Brazilian currency will remain appreciated for some time.
BlackRock’s Will Landers, who manages US$7 billion in Latin American shares, said today at the Bloomberg event Latin America Investing Conference that his firm is buying shares of exporters and other companies that will benefit from the continued efforts of the Brazilian government to weaken the real through taxation on foreign investments and the intervention on the forex market.
“This benefits companies that are major exporters and have revenues in U.S. dollars,” he said.
The Real (BRL), which fell 7.3 percent last month, is still overvalued given the 26 percent appreciation in the last decade, said Alberto Ramos, LatAm’s chief economist for Goldman Sachs.
“There is no doubt that Brazil’s currency is too strong,” said Ramos, though he also added that the real will remain decoupled and appreciated for a while.