Foreign Investors Pour $5 Billion Into Brazil's B3, Setting New High Since 2023

(MENAFN- The Rio Times) Foreign investors have brought R$ 26.9 ($5) billion into Brazil's B3 stock exchange in the first half of 2025, the highest level since 2023, according to official data from B3 and financial consultancies.

This marks a sharp turnaround after a year of record outflows in 2024, when global uncertainty, rising U.S. interest rates, and weak commodity prices pushed investors away from Brazilian stocks.

The Ibovespa, Brazil's main stock index, has risen 15.44% so far this year and hit a new all-time high of 139,636 points in May. In dollar terms, the index has gained nearly 31%, putting Brazil among the top-performing markets worldwide.

The main driver behind this rally is the strong return of foreign capital, which now accounts for nearly 56% of all trading volume on B3 , the highest share since 2019.

Several factors explain why foreign investors are coming back. First, Brazilian stocks became much cheaper compared to other markets after a 30% drop in 2024.



By early 2025, the price-to-earnings ratio for the Ibovespa was just 6.8, well below its 15-year average of 10.8. This made Brazil attractive for investors looking for undervalued companies.

Second, global investors are moving money out of U.S. assets and into markets like Brazil. Trade tensions and new tariffs imposed by the U.S. have made American markets less predictable.
Brazil's Strong Exports and High Rates Attract Foreign Investors
Brazil's economy, with its strong export base in food and minerals, stands to benefit as global companies look for new suppliers. The Brazilian real has also strengthened, reaching its highest value since October 2024, which boosts returns for foreign investors.

Interest rates in Brazil remain high, with the Central Bank 's Selic rate expected to stay above 14% for some time. This attracts investors using the“carry trade” strategy, where they borrow in countries with low rates and invest in countries with higher rates like Brazil.

The stability of local rates has helped support the stock market's gains. However, risks remain. New U.S. tariffs on Brazilian exports, especially steel and aluminum, have created uncertainty for some sectors.

Brazil's government has responded with its own trade measures, but competition from countries like China and Mexico could pressure local companies. Fiscal challenges and the upcoming 2026 presidential election also add to the uncertainty.

Despite these risks, the large inflow of foreign capital shows that investors see value in Brazil's stock market right now. They are focusing on large, liquid companies such as Petrobras, Vale, and Nubank, which benefit from Brazil's export strength.

As long as Brazil can maintain economic stability and manage its fiscal situation, foreign investment is likely to continue supporting the market.

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