Crisis still weighs on stock market
Almost a year after the spread of the coronavirus triggered the worst global crisis in decades, most Ibovespa stocks could not recover losses.
Brazil's benchmark stock index rose 5% in the period and has even set new all-time highs, but about 64% of the shares that make up Ibovespa remain below pre-crisis levels. Those industries most dependent on the resumption of activity - shopping malls, airlines and banks -are the most affected by the slow economic recovery and uncertainties about mass vaccination.
A survey by Valor Data shows that only 29 of Ibovespa's 81 shares went up again, while 52 have seen losses since February 26 of 2020, when the Brazilian market was hard-hit by the global crisis. Ibovespa closed down 7% on that trading session, following the American markets lead, before several circuit breakers, a temporary measure that halt trading when stocks fall 10%, in March.
Since then, the Brazilian index has recovered from the worst moments of the crisis and even reached the all-time high of 125,000 points early in 2021. The positive trend, however, is propped up by a still limited portion of companies, especially e-commerce retailers - as a consequence of changes in consumption habits brought about by the pandemic - and commodity-related stocks. The performance of the latter, a reaction to the prospect of recovery in the world economy with the advance of vaccination and more stimuli in developed economies, confirms that most of the Brazilian stock market's recovery drive comes from abroad.
The market capitalization of 15 companies linked to raw materials rose 33.4%, to R$1.27 trillion, much higher than Ibovespa's market capitalization's increase of 5.83% since the beginning of the crisis. Were it not for these stocks, Ibovespa's market cap would have dropped 2.82%, to R$2.95 trillion.
In the list of biggest losses are Cogna ON (-62%), Embraer ON (-48%) and BR Malls (-47%), which represent well the negative dynamics for the education, aviation and malls sectors. Reinsurance company IRB ON (-77%) saw the worst performance in the ranking, but suffered more from its own factors than the effect of the pandemic.
A turnaround in segments more sensitive to the domestic cycle still requires patience, although the stocks remain on the radar and some are even considered cheap.
Even the sectors that have shown resilience during the pandemic end up facing the weight of macroeconomic uncertainties, ranging from the pace of recovery to the fiscal...
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