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Overhauling the bloated public pension system has been a ubiquitous topic among Brazil investors for years now, the change nearly every money manager would cite when asked what the country needed most. Now that it’s finally here, traders seem to want a whole lot more.
The revamp, which is expected to save the government almost 1 trillion reais ($266 billion) over the next decade, has mostly been priced into local assets, with the currency, stocks and bonds all among the world’s best performers this year.
For further gains to take hold, investors want to see interest-rate cuts, a rebound in economic growth and further progress in government efforts to shore up the economy. Measures including rewriting the tax code to privatizing state-run companies are in focus.