Bank of America (NYSE:BAC) said the reaction to the Brazilian homebuilder market over concerns of rising interest rates was missplaced, and they recommend acquiring shares of homebuilder MRV Engenharia & Participacoes SA in the sector.
Concerns were the rising interest rates were going to cut into the earnings of the homebuilders in Brazil.
In a note to clients, Bank of America analyst, Renato Onishi, based in Sao Paulo, said MRV has been added to its “Brazil Core Portfolio.”
Onishi recommended investors in Brazil should cut their exposure to Brazilian utilities, as well as remain "underweight" in the retail sector, citing valuation.
Investors should remain "Overweight" in financials, concluded Onishi.
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