October 24, 2014
Dimitra DeFotis – Barron’s, 10/23/2014
The Brazil equity market has tumbled nearly 8% this week and has slipped into negative territory for the year.
The iShares MSCI Brazil Capped ETF (EWZ) is down more than 8% this week, and has fallen more than 7% year to date. Among Brazil equities, even shares that should be somewhat more immune to Sunday’s election have been hit hard in recent days, including airplane maker Embraer (ERJ) and meat producer BRF (BRFS and BRFS3.Brazil).
The odds are with Brazil’s incumbent Pres. Dilma Rousseff, if ever so slightly, to win Sunday’s runoff presidential election and defeat Aecio Neves, a former governor who is more conservative and the investor favorite. Here’s Societe Generale’s Benoit Anne on anything denominated in Brazil’s currency. He is on the sidelines at this juncture, even if the election outcome is a binary one:
October 24, 2014
The Economist (print edition), 10/25/2014
Like voters in most democracies, Brazilians pay little heed to foreign policy when choosing leaders. Yet the presidential election on October 26th matters not just to Brazil but to the region. Over the past two decades Latin America’s giant has overcome its introversion and wielded growing influence in its backyard. And on foreign policy, as on economics, there is a clear gap between President Dilma Rousseff of the centre-left Workers’ Party (PT), who wants a second term, and her rival, Aécio Neves, of the centre-right Party of Brazilian Social Democracy (PSDB).
Brazil’s greater assertiveness began under Fernando Henrique Cardoso of the PSDB in the 1990s and continued under the PT’s Luiz Inácio Lula da Silva, the president in 2003-10. Both gave importance to the Mercosur trade block (founded by Brazil, Argentina, Paraguay and Uruguay), to South America and to ties with Africa and Asia. Both had reservations about a 34-country Free-Trade Area of the Americas, a plan that Lula helped to kill.
But there were differences, too, partly because of Brazil’s changing circumstances. Lula put far more stress on “south-south” ties and on the BRICs grouping (linking Brazil to Russia, India, China and later South Africa). In Latin America he emphasised “political co-operation”. Relations with the United States were cordial but distant, especially after Lula tried brokering a nuclear deal with Iran which the White House opposed.
October 24, 2014
Kenneth Rapoza – Forbes, 10/23/2014
The market is now forecasting that incumbent Dilma Rousseff will be re-elected president in a squeaker on Sunday. Although rival Aécio Neves could pull off an upset if enough of Marina Silva’s voters choose him or opt-out of voting for anyone, his victory would now be seen as a surprise. Downside risks remain in Brazilian equities.
Neves came from polling in third place behind Marina Silva to clobbering her in the first round on Oct. 5, thus guaranteeing him the No. 2 contender spot against Dilma. Polls have suggested that at least 60% of Marina’s voters would chose Neves on Sunday, but he needs a little more than 65% providing the rest of Marina’s voters choose Dilma. So far, that has not been the case as only around 20% of Marina’s voters said they would vote for Dilma on Sunday, meaning the current crop of undecided voters will call the shots. Recent polls show a technical tie.
It is worth noting that the market’s forecast is not exactly the market’s preference. At this stage, investors are broadly looking for change in Brasilia, even more so than the average Brazilian.
October 23, 2014
Joseph Bamat – France 24, 10/23/2014
An acrimonious and volatile presidential race has entered its final stretch in Brazil, with left-wing incumbent Dilma Rousseff and conservative challenger Aecio Neves running neck and neck.
Over 140 million Brazilians will be voting on Sunday, with Rousseff of the Worker’s Party (PT) fighting to win a second term, and Neves desperate to avoid a fourth consecutive defeat at the ballot box for his centre-right Party of Brazilian Social Democracy (PSDB). Rousseff appears to have regained the momentum just days ahead of the October 26 election, after opinion polls showed she had slipped behind Neves last week. Brazilian polling firm Datafolha revealed on Wednesday that Rousseff was on pace to win 52 percent of the votes that will be cast on Sunday, with Neves set to claim 48 percent support – a margin within the study’s margin of error.
“This election has been marked by unusual political vulnerability,” said Paulo Sotero, the director of the Brazil Institute of the Woodrow Wilson International Center for Scholars. “It’s been the most unpredictable election since the return of democratic elections in 1989 and will remain unpredictable until the end.”
October 23, 2014
Luana Ferreira – BBC News, 10/22/2014
Brazilian entrepreneur Marcelo von Ancken remembers the dilemma which inspired his new business – he had nowhere to take his afternoon nap. The 51-year-old has a daily ritual at his office in downtown Sao Paulo – after eating lunch he likes to lean back and take a 30-minute siesta.
Mr von Ancken says he finds that having the little sleep gives him a renewed energy for the remainder of the day. Yet one lunchtime back in 2010 he was across town waiting for an afternoon meeting.
Unable to get back to his office, he instead tried, and failed, to take a power nap in his car. An attempt to sleep on a shopping centre bench was equally unsuccessful. The frustration was the spark of inspiration for a new company – a drop-in centre where members of the public can go for a quick sleep.
October 23, 2014
J.P. – The Economist, 10/23/2014
Business barons and financiers are not known for taking to the streets. Yet on October 22nd thousands turned out in the centre of São Paulo in support of Aécio Neves, the centre-right challenger to President Dilma Rousseff, of the left-wing Workers’ Party (PT), in a tight run-off election on October 26th. Together with spouses and children they sauntered down São Paulo’s Avenida Faria Lima, a thoroughfare conveniently located close to many of their offices.
It was a sight to behold—perhaps unprecedented in election history, and not just in Brazil. Besuited types with crisp, initialed shirts toting “Aécio” flags. Snazzily clad socialites, wrapped in pashminas to keep out the unseasonable chill, chanting anti-PT slogans. Everyone snapping selfies with pricey iPhones (most Brazilian rallies are cheaper Samsung affairs). The only thing missing from this “cashmere revolution” was champagne flutes—and Mr Neves himself, campaigning in his home state of Minas Gerais.
“Most of Brazilian GDP is here,” observed one private-equity boss with four Aécio stickers on his checked shirt, shortly after bumping into a pal from a big American technology firm. In that sense, the event played right into PT propaganda, which relentlessly paints Mr Neves as a pawn of the rich elite. On October 21st Luiz Inácio Lula da Silva, Ms Rousseff’s popular predecessor and political patron renowned for his earthiness, went so far as to compare Mr Neves’s Party of Brazilian Social Democracy (PSDB) to the Nazis for its apparent intolerance of the less advantaged. (Mr Neves had previously compared Ms Rousseff’s formidable marketers to Joseph Goebbels.)
October 23, 2014
Supporters of Brazilian president Dilma Rousseff told teleSUR on Wednesday they believe her bid for reelection can maintain steam in the last days of the presidential race.
According to the Brazilian Social Movements’ (MST) coordinator Joaquim Pinero, “The social movements here in Brazil are certain that only with Dilma can we push for what we are asking for here in the streets – for political reform in Brazil.”
“Only through reform, will we be able to have working class representation in congress, which continues to be controlled by the big corporations,” Pinero told teleSUR English’s correspondent in Brazil, Stephanie Kennedy. Another leftist activist in Rio de Janeiro told Kennedy that Rousseff has already “managed to deepen” political reform to empower the poor and strengthen democracy.