Buy Brazilian stocks because the country is going to win the World Cup, giving a boost to the local equity market.
That's according to Goldman Sachs, whose analysts said the host nation's chances of winning the most-watched sports event this year are more than three times higher than the next most likely team, neighbouring Argentina.
Brazil will beat Argentina 3-1 in the final after they see off Germany and Spain in the semifinals, Goldman analysts including Jan Hatzius and Sven Jari Stehn said in a report. The host nation has a 48.5 per cent probability of winning the FIFA tournament, followed by Argentina on 14.1 per cent and Germany on 11.4 per cent.
The win will boost the country's stock markets in the weeks after the final, based on history, Peter Oppenheimer and other Goldman strategists wrote in the note. But investors may need to move fast as the gains won't last, they said.
The victor country's equity markets outperform global stocks by 3.5 per cent on average in the first month after winning, "although the outperformance fades significantly after three months," according to the analysts. The winning nation sees its stock market underperform global markets by around 4 per cent on average over the year following the final.
