01/14/2008 09h02

Investor seeks greater profitability

Valor Econômico - 01/14/2008

With Brazil's economic growth and the credit expansion as it has never been seen, since last year investors have been betting their chips on stocks focused on the retail market, which they believed would bring them happiness. That was not true. The main stocks of the sector had very inferior results than the Bovespa Index in 2007, especially in the last quarter, and they began this year facing new falls. According to the analysts, in spite of the retail sales having grown, they did not reach the exceptional figures that the market expected, which made investors to migrate to stocks that promised greater profitability, such as Vale, Petrobras and, more recently, the Telcos. The frustrated sales expectations were not the only reason to drive investors away from retail sector stocks. With the worsening of the international setting since last August, investors migrated to blue chips such as Petrobras and Vale, abandoning stocks of smaller liquidity (known as "small caps" or second line), precisely the group in which the retailers are. "Such escape was not a ‘privilege' of only that sector; investors fled from all stocks that do not guarantee an immediate exit, in case there is a sudden worsening of the market", affirms Spinelli Corretora's investments analyst Daniel Gorayeb. To close the rather unfriendly setting for retail sector stocks, more recently, the resuming of the inflation and the possibility of the Selic interest rate going up again brought back the fear of a fall of the economic growth.