Brazil: one of the few EMs trading at less than five-year averages

ON EMERGING MARKETS

HSBC's Jose Cuervo on why he is positive about Brazilian equities.

Brazil’s earnings growth should be sustained at high levels in 2011, but this is not fully reflected in valuations. According to IBES and Credit Suisse research, Brazil is to experience EPS growth of 26% and 28% in 2010 and 2011, respectively. In terms of valuations, Brazil continues to trade at relatively attractive multiples. The 12-month forward p/e stands at 11.1x. This is low when compared to the broader emerging markets (11.7x) and China and India (11.7x and 16.8x respectively). Brazil also looks undervalued both against emerging markets and Latin American countries in a P/B vs ...