Morgan Stanley On 2022 Forecasts For Ibovespa and MexBol Indices

Presidential elections in Chile and Colombia in 2Q22, and in Brazil in 4Q22, along with political developments in Peru, Argentina and Mexico, are key events likely to decide the direction of macroeconomic policy in the next two years, Morgan Stanley says in a report.

• Events are "potential catalysts that should determine if Latin American equity markets offer deep value or a value trap for investors," strategists wrote in a note according to Bloomberg.
• Sees Ibovespa at 120,000 points at the end of 2022:
  • Likes stocks in the secular growth, commodity and domestic defensive groups; overweight in agriculture, food and petrochemicals.
  • Avoid domestic cyclical group; underweight in info tech, banks and transportation.
• Sees Mexican Bolsa at 56,000 by the end of 2022:
  
  • Likes companies related to recovery trade and the economic reopening; overweight industrials, real estate, metals and steel and infrastructure.
  • Avoid telecom, financials and food and beverages. (BBG)