AZ Quest turns more cautious on Brazilian stocks on tougher outlook
SAO PAULO, June 14 (Reuters) -Brazilian asset manager AZ Quest, which is backed by Italy's Azimut AZMT.MI, has adopted a more conservative portfolio approach on local stocks, its head of equities told Reuters, as it sees an increasingly challenging scenario for them.
AZ Quest has some 27.5 billion reais ($5.13 billion) in assets under management, owning stocks in Brazilian companies such as aircraft maker Embraer EMBR3.SA and state-owned oil firm Petrobras PETR4.SA.
"We are not buying across the board. We are with a lower exposure and a more defensive portfolio", Welliam Wang said in a video interview on Thursday.
Brazil's benchmark index Bovespa .BVSP has fallen some 11% this year, as foreign investors have withdrawn more than 40 billion reais out of assets in the Latin American country amid a global repricing over when U.S. interest rates could fall.
Wang said AZ Quest favours a portfolio made up of stocks from companies less dependent on the macroeconomic scenario.
"It's necessary to focus on stock picking," he added.
Risk sentiment has also been growing, in part due to concerns over the focus of President Luiz Inacio Lula da Silva's administration on raising revenues rather than cutting spending.
Wang said markets are eager for more detail on Brazil's 2025 budget, whether it will include greater expense control, new measures to improve tax collection or higher spending.
A better fiscal outlook for Brazil, he said, could also attract back some money back from foreign investors.
($1 = 5.3563 reais)
Reporting by Paula Arend Laier; writing by Andre Romani; editing by Alexander Smith
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