Foreigners buy Brazilian shares in October, but reverse part of their purchases after the election
IIF data show net purchases of around US$4.2 billion in the first half of October, followed by sales after Lula's re-election.
BY THE X-TRADER NEWS NEWSROOM · REPORTING FROM MONEY TIMES · 2 MIN
Foreign investors were net buyers of Brazilian shares in October, according to IIF data released by Money Times. The movement, however, was not sustained until the end of the month: a large part of the purchases made at the beginning of the period were reversed after the election.
According to Money Times, purchases in the first fortnight came after Flávio Bolsonaro led the first round, which gave the flow a reading linked to the political scenario. In this interval, the IIF estimated net purchases of around US$4.2 billion in Brazilian shares.
The strongest point was on October 5, with net purchases of US$2 billion, the highest daily flow since 2009, according to Money Times and InfoMoney.
In the following two weeks, the direction changed: net sales reached US$2.4 billion. After Lula's re-election, on October 25, the outflow continued in the following four trading sessions, with net sales of US$1.4 billion. In total, according to the IIF, foreigners reversed just over half of their purchases at the beginning of the month.
Reuters, in a report from New York dated November 3, also attributed the numbers to the IIF, according to InfoMoney. The data reinforces that external capital's reading of the political scenario can change in a few days.
For the editorial line of this newspaper, the episode shows that foreign capital reacts quickly to electoral signals, and that fiscal responsibility and clear market rules continue to be the central questions for those who decide to allocate resources in the country.
What changes for the investor
For those who invest and operate, the data indicates that foreign flows can fluctuate strongly around electoral events, and that movements concentrated on a single day, such as October 5th, can weigh on market liquidity and mood. It is worth monitoring the next IIF releases and the evolution of the fiscal agenda before making any decision. This article does not provide a purchase or sale recommendation or price projections.
Automatically translated from Portuguese.
