Foreigners Pulled US$2.4 Billion Out of Brazil’s Stock Market in a Single Week, the Most on Record

Foreign investors withdrew a record $2.4 billion from Brazil's stock market in a single week during August, according to data that began in 2008. This week saw the biggest net outflow of R$12.6 billion (approximately $2.4 billion) in a single week since records started in 2008. The outflow increased further to R$18.1 billion (about $3.5 billion) across the first ten trading sessions of the month, demonstrating a pattern of foreign investors exiting the Brazilian equities market.

The withdrawal continued into the following days, with R$4.7 billion (around $908 million) leaving on August 11 alone – the largest single-session foreign withdrawal since April 2021. Despite the heavy outflows, the year-to-date foreign flow into B3 equities remained net positive as of August 14, at roughly R$18.2 billion (around $3.5 billion).

The data reveals a complex situation where foreign investors are withdrawing from Brazilian equities due to the upcoming presidential election and the fiscal challenges that the next government will face. The Brazilian real has strengthened against the US dollar, which may have contributed to the outflows. However, the real has also weakened when measured from the April peak, indicating that the situation is multifaceted and influenced by various factors including the election, fiscal policy, and global economic conditions.