Individual investors are participating more in the Brazilian equity market according to an article by Claus Born at Franklin Templeton. He notes that low-interest rate is driving more people looking for yield to the equities. Currently the short-term interest rate, the selic, is at just 2% relative to about 14% four years ago.

So it is not just in the US where people are indirectly forced to invest in stocks with interest on savings earning practically 0%. In Brazil also low-interest rate is leading more savers to invest in the stock market.

From the article:

In this low-yield environment, many of them have started turning to the equity market. The number of trading accounts has been increasing exponentially. Brazil’s stock exchange has seen a surge from around 600,000 accounts in 2008-2017 to nearly three million accounts today.² (See chart below)

Is this the peak of the trend? In our view, probably not. With a population of more than 210 million inhabitants, still less than 1.5% of Brazilians are currently engaged in the stock market. However, new investors are discovering the potential opportunities. Not only are more women investing in Brazil’s market, up from 22% in 2018 to 25% today, but it is attracting growing interest among the younger generations of both genders.³ More than 70% of investors are aged 46 and under, representing more than 25% of value invested in the stock market.⁴

Notes:

2. Source: Brasil, Bolsa, Balcão (B3). Number of individual trading accounts in Brazil, as of July 30, 2020.

3. Source: B3, as of August 2020.

4. Ibid.

Source: Local Investors Discover Brazilian Stocks, Franklin Templeton

Also see:

• Brazil’s “Dutch Disease” is Morphing into “Japanification”, The Emerging Markets Investor