Iguatemi x Multiplan Performance - Abnormal

Another interesting relative performance that happened on the last few days was Iguatemi Empresa de Shopping Centers´ - IGTA3 - underperformance compared to Multiplan Empreendimentos - MULT3 - shown in the graph below.

In the past we have argued that some underperformance was to happen because of the inflationary pressures in Brazil. Since MULT indexes its rent contracts mainly to IGP-M (very high now) and IGTA indexes it mostly to IPC-A (lower now), so that could create relative preference on one over the other. But, we think the relative performance could have been excessive, and a relative comeback could happen on the short-term.



Trade Idea: Long IGTA Short MULT

Related Words: Iguatemi, IGTA3, Multiplan, MULT3, Brazilian Malls, Malls, stocks, relative value, long-short, real estate, REIT.