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Garnry: Brazilian equities moving to a different beat

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Brazil is back, after a turbulent three years, equity markets are showing signs of a remarkable recovery.
Equity markets had seen stocks fall by almost sixy percent since 2011. Stocks have now risen by just over forty percent, also in dollar terms, since March, largely driven by a surge in financials.
However, unless you’re already into Brazilian banks then it’s not quite time to start dancing the samba, the economy is still not in great shape, but the mood music does seem to more upbeat.
Saxo Bank's Head of Equity Strategy Peter Garnry explains why Brazilian equities appear to be defying the economic laws of gravity given that macro indicators still sending gloomy signals.
Peter says that the resurgence is clearly seen in banks and financials fuelled by middle class growth. As with other emerging markets the Brazilian economy is slowly moving from being commodity export driven to a consumer driven model.
Growth is expected to pick up in Brazil as we end 2014 and forecast to be around 1.5% in 2015.