Brazil traders unnerved by prospect of impeachment and aftermath

Julia Leite and Ney Hayashi Cruz – Bloomberg Business, 8/19/2015

As talk of impeaching President Dilma Rousseff has ratcheted up this month, investors have made one thing clear: they’d rather see her stay in office.

The nation’s benchmark Ibovespa stock index has tumbled 8.4 percent in August on concern her ouster would only exacerbate what analysts now forecast will be Brazil’s longest recession since 1931.

“The actual process of how Dilma could be replaced — if she were to be impeached or resigned — would be politically messy and divisive for the country,” Geoffrey Dennis, the head of global emerging-market strategy at UBS Securities, said by phone from Boston. “Even if you have a straightforward transition, there is no guarantee it would make things better.”

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