Citigroup Recommends Increasing Exposure to Brazilian Risk Assets After Bolsonaro Outperforms Expectations in First Round Vote
Deep News
Yesterday
Citigroup Inc. has advised investors to increase bullish positions on Brazilian equities and local-currency bonds, following Flavio Bolsonaro's stronger-than-expected showing in the first round of the presidential election.
"Bolsonaro is the more market-friendly candidate, pledging fiscal austerity, privatizations, deregulation and a reduction in value-added tax," Citigroup strategists wrote in a note. "The strong performance of his party in the Senate should help push his legislative agenda through," they added.
Citigroup said prediction market pricing indicates a high probability that Bolsonaro will win the October 25 runoff, and recommends buying Brazilian stocks as well as government bonds maturing in 2031, known as NTN-Fs.
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