Down one rung to No. 3 is Pedro Martins Jr., who moved back to J.P. Morgan from Bank of America Merrill Lynch last fall. “He is an excellent strategist who helps me link macro scenarios with the equity world,” reports one loyalist. Martins is advising clients to adopt a neutral stance on Brazil, owing to ongoing structural concerns. A monetary tightening cycle, currency weakness and valuations that are in line with historical averages — despite a high level of government intervention — prevent “a more constructive view on equities despite powerful cyclical tailwinds, such as domestic fiscal expansions and domestic economic growth acceleration,” the São Paulo–based strategist says. Brazilian multiples aren’t rich, especially within a Latin American context, but consensus earnings growth forecasts for 2013 are too high, he believes. — Carolyn Koo |
Economics & Strategy – Equity Strategy: Third