Diario | Latin America

Research evidence excerpt

Diario | Latin America

Latin America | Diario EquityJulyResearch8, 2026

Brazil: Market Cap to GDP- 2000-26, %Diario | Latin America

Brazil, Charting LatAm, Cogna, Cury, El Niño Weather Call, GPS, InRetail,

PriceSmart, Volaris

Brazil | Macro, Leverage and Politics | Post-Trip Reflections. We were recently in Brazil meeting

with companies, experts, and investors. Caution remains the dominant theme, particularly under

a Lula re-election scenario. Fiscal policy, macroeconomic stability, and leverage were the key

concerns. One of the main debates is whether Lula would scale back fiscal stimulus and other

unconventional measures in 2027. Such a shift could weigh on GDP growth in the short term, but it .Source: Jefferies, Bloomberg. BACEN

could also help alleviate inflationary pressures. Our week in Brazil coincided with a full reversal of the

bullish window that characterized 2025 and early 2026—a rally largely driven by foreign inflows, but one Brazil: Real GDP growth ex Agro, y/y %

that had also begun to improve domestic investor sentiment, albeit without much conviction. We found

sentiment at deeply depressed levels, though not yet at the point of capitulation. This is occurring as

Brazil's market capitalization-to-GDP ratio approaches a 20-year low and local investors' equity allocation

has fallen to a multi-year low of just 8%.

InRetail (Buy) | Strong Momentum | Mass Hidden Value. With a strong consumer environment in

Peru, Mass still in the early stages of its rollout, mall profitability recovering, and leverage declining,

InRetail remains one of the highest-quality structural growth stories in Latin America, in our view,

supported by a management team that continues to execute successfully across multiple formats.

We update our estimates and PT to $50 ($45).