It is unusual when a country’s market as a whole is down considerably and yet the banking stocks in that country are on the rise. Igor Cornelsen tries to explain how this is happening in the Brazilian market right now.
Igor Cornelsen has said that the banks have found a way to make profits during turbulent times because their bankers were prepared. The banks were prepared for this kind of trouble because they have only been lending to those who are the most worthy of credit. They were planning ahead and not equipping people with credit who did not deserve it.
Most of the banks are able to play by the same rules as one another. There are only about ten major banks in the country of Brazil. They are able to learn from one another and adapt to the way that the market is moving. Therefore, it is entirely possible for those banks to learn from one another and try to adapt to the new ways that they are all doing their business.
Since China and Brazil are major trading partners, the healthy Chinese economy has helped to keep the banks afloat as well. This means that those who are putting their money into the Brazilian banks are likely to see a healthy return on those dollars.
A new administration that is entering the government of Brazil is expected to make changes to the economy. It is believed that the Real (the currency of Brazil) is overvalued and has been overvalued for some time. While this may sound like a nice problem to have, an overheated currency can cause as many problems as a currency that does not have too much value. Therefore, people will be watching the banking stocks of Brazil to see if they continue to defy the market.