Copper price rally and rate cuts drive analyst bets on Peru, Brazil

Rising metals prices driven by artificial intelligence demand and a global industrial recovery prompted an upgrade of Peruvian equities to “overweight” by Oxford Economics analysts on Thursday.

The firm maintained its “overweight” rating for Brazil on expected interest rate cuts.

Peru is best placed to capitalize on the copper cycle due to its high export exposure to the red metal, in high demand for data center buildouts, the analysts said.

While Chile is also a copper-producing powerhouse, analysts cited downside risks from mining closures, strikes and logistical bottlenecks, maintaining a “neutral” rating.

In Brazil, which has a more diversified economy than its regional peers, an expected interest rate cut cycle “will likely prove a powerful driver of (local) equities in the medium term,” the analysts wrote.

Oxford Economics remained “underweight” on Mexico and Colombia, citing political uncertainty surrounding Mexico’s trade negotiations with the US and Canada and a monetary tightening cycle in the Andean nation.

(By Kylie Madry; Editing by Daina Beth Solomon)