Most Brazilian ADRs Are Trading Under $10 a Share

“Brazil, Land of the Future and always will be!” – Charles de Gaulle

Brazil used to be one of the best emerging markets a few years ago. As one of the BRIC countries Brazil had everything going it relative to others. But then politics and other factors turned Brazil one of the basket cases – at least from the standpoint of international investors. Brazil seems be one of those countries that is always emerging and never able to get to the next level. Maybe Brazil is destined to suffer from the natural resource curse just like some nations are cursed by  the abundance of oil.

Last year Brazil was one of the worst emerging markets. The Bovespa index had a negative return of about 12% on price only basis. The MSCI total return for Brazil was down by 17% for 2021 and 19% loss in 2020. So two years in a row Brazil let down investors.

With that said as I looking into Brazilian ADRs, one thing stood out. Among the 23 or so stocks trading on the US exchanges, just 6 are trading above $10 a piece. Rest of going for under $10 with many selling for under $5. This is indeed shocking. For instance two of the largest private sector banks – Banco Bradesco(BBD) and Itau Unibanco (ITUB) – closed at $3.57 and $3.98 per share last Friday. The following table shows the closing prices of exchange-listed Brazilian ADRs:

S.No.ADR NameTickerEnd price on Jan 7, 2022Year-To-Date % Change as of Jan 7, 2022Industry
1AMBEV S.AABEV$2.59-7.50%Beverages
2AzulAZUL$12.80-3.03%Travel & Leisure
3Banco BradescoBBD$3.574.39%Banks
4Banco Santander BrasilBSBR$5.563.54%Banks
5BrasilAgroLND$5.10-5.56%Real Estate Inv&Serv
7BRF S.A.BRFS$4.243.67%Food Producers
8Centrais Eletricas BrasileirasEBR$5.39-11.49%Electricity
9Companhia Brasileira de DistribuicaCBD$3.40-14.79%Food &Drug Retailers
10Companhia Energetica de Minas Gerais-CEMIGCIG$2.20-9.47%Electricity
11Companhia Paranaense de Energia-COPELELP$5.26-6.57%Electricity
12Companhia Siderurgica Nacional-CSNSID$4.25-4.28%Indust.Metals&Mining
13EmbraerERJ$17.03-4.06%Aerospace & Defense
15Getnet Adquirencia e Servicos para Meios de Pagamentos S.A.GET$1.35-3.57%Financial Services
16Gol LinhasGOL$5.67-6.28%Travel & Leisure
17Itau UnibancoITUB$3.986.13%Banks
18Natura & Co HoldingNTCO$7.84-15.43%Personal Goods
19Petroleo Brasileiro-PetrobrasPBR$11.010.27%Oil & Gas Producers
21Suzano S.A.SUZ$10.54-2.41%Forestry & Paper

Source: BNY Mellon

Disclosure: Long BBD, ITUB and PBR

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