Quarterly reports show that companies listed on the Ibovespa stock market ignored the worsening prospects of the Brazilian economy in 2019 and the damage that a weak GDP (gross domestic product) could cause for business.
For investors, the change will likely reduce the potential for market gains.
In a study completed by Folha, 37 of the 63 companies listed on Ibovespa (the primary stock market in Brazil) either mentioned macroeconomic problems or considered the economic crisis close to ending.
There were 18 pessimistic companies that, in a message to investors or during a conference call with analysts and the media, said they were worried about the economy. Semi-public companies like Banco do Brasil, and IRB (reinsurance) were among the most optimistic companies on the market.
In the last few weeks, economists aggressively cut their expectations of growth. Itaú bank is predicting a 1% growth in GDP, less than the 1.1% registered in 2017 and 2018.
When the year began, the market was optimistic about the Jair Bolsonaro (PSL) government and the impending social security reform.
Adverse conditions are limiting the potential for companies to reap high revenue, and it is unlikely that Ibovespa will reach the 140 thousand points that analysts predicted.
The stock market closed on Friday at its lowest level of the year (89.992 points), frustrating many who had hoped to see the market return to 100 thousand points.
Translated by Kiratiana Freelon