Institutional Investors 14th annual ranking
of Brazils best research teams resulted in a three-way
tie, with BTG Pactual, Itaú BBA, and J.P. Morgan sharing
first place overall.
Each year, Institutional Investor ranks the top research
firms and sector-specific teams that serve investors in the
Brazil markets. Although BTG Pactual and Itaú BBA have
rated as the top two research firms every year since 2010, J.P.
Morgans rise to the the top comes after back-to-back
fifth place finishes.
The 2017 survey was sent to 725 buy-side analysts and
portfolio managers from 385 institutions managing an estimated
$157 billion in Brazilian equities and $199 billion in
Analysts ranked this year pointed to an upcoming
presidential election, as well as looming interest rate
increases, as the biggest potential impacts on the Brazilian
economy in the coming months. Brazilians will hit the polls in
October 2018, choosing the next president and vice president as
well as electing the National Congress, state governors and
vice governors, and state legislative assemblies.
On a macro basis, next year is an election year in
Brazil, Antonio Junqueira, electric and utilities analyst
at BTG Pactual, said by phone. It will be extremely
Junqueira and his team placed first in the electric and
utilities industry. Junqueira said that whoever is elected will
have an impact on his sector because they could change the way
electric utilities are priced.
Our economy didnt grow much over the last three
years, he said. We need to provide deep,
Renata Faber, whose team at Itau BBA ranked first in the
capital goods sector, said she will also be watching the
The political uncertainties are definitely not good
for investments, she said by phone. The capital
goods sector depends a lot on higher investments.
Analysts also said they would pay close attention to interest
rates, which Junqueira predicted would probably go up a
J.P. Morgans Fernando Abdalla, who ranked first in his
coverage area as a senior analyst for Latin America
transportation, said that the interest rate reduction cycle has
been significant for his sector, in part because it has reduced
the cost of debt. Faber agreed.
Lower interest rates are also benefitting the capital
goods sector, she said. Many companies which are
highly leveraged will have better financial expenses. The
decisions to invest are a bit easier.
Although a rise in interest rates could reverse some of
these positive effects for businesses, Santanders Daniel
Gewehr said it could spur domestic equity investments.
Domestic investors are not putting money in
Brazil, said Gewehr, whose team ranked first in the
equities strategy category. As interest rates change,
investors will likely take money out and put it into the
Gewehrs firm ranked seventh overall, dropping two
spots from last years fifth place finish. Bradesco BBI
came in fourth, climbing from eighth place last year. This
years top five was rounded out by another tie, with Bank
of America Merrill Lynch and Credit Suisse sharing the No. 5