The Point for Latin America

Research evidence excerpt

The Point for Latin America

Point |

Monday, 22 June 2026

Top Call | Company | Industry | Global | Key Rating and Target Price Changes

Top Call

Brazil Equity Strategy MVPs - Brazil looking increasingly inexpensive vs DM as

global focus rotates to AI theme

Our MVP portfolio has outperformed the IBOV since May-15, being down -4.3% vs

Ibovespa -5%. The Ibov’s sell-off over the last thirty days was likely driven by

renewed market interest in the AI theme. Even within EM, markets exposed to AI-

related investment themes (Taiwan and Korea) continue to attract large capital

flows, while markets with limited technology exposure have lagged. After reaching

a peak of R$70b YTD in mid-April, foreign flows into Brazil have seen R$33b in

outflows making the YTD number R$37b currently. EWZ share count reached a

historical peak on May 19 and has decreased by 9% since. We note Brazil's 8.4x

forward P/E represents one of the widest discounts to developed markets in recent

memory. With the Iran conflict easing, oil normalizing, and the BCB retaining

capacity to cut rates, the risk/reward for patient allocators is increasingly looking

skewed to the upside.

Andre Mazini, CFA | Gustavo Schroden | Joao Pimentel | Gabriel Barra | João Pedro Soares

Brazil Insurance - Multi-Line - Favoring Low Risk Names on a Risk Off Backdrop

We favor insurance names in the short-term due to their defensive profile,

reflected in low betas, resilient cost of equity, and strong earnings visibility, which

provide downside protection in volatile markets. The sector also benefits from

elevated interest rates, as insurers invest premiums in Selic-linked assets, helping

financial income. Also, high ROEs supporting attractive dividend yields, reaching

double digits in some cases.