All eyes on Brazil ahead of October’s election

22nd September 2010

Historically, the run-up to elections has been a time of turmoil for Brazil's currency and equities. The Bovespa equity index and the local currency both plunged by more than 40% in 2002 as investors panicked about the possible outcome of that election.

This time around though there are no similar jitters, and definitely no sense of panic, says Philip Poole, Global Head of Macro and Investment Strategy at HSBC Global Asset Management.

He says political and economic improvements over the past decade, together with de facto central bank independence, have fundamentally changed the investment landscape in Brazil.

He adds: "This should give investors further confidence that although Brazil represents a strong investment opportunity, the level of associated risk has been substantially reduced.

"The Brazilian markets' remarkably calm behaviour leading up to the October Presidential election demonstrates the success of the political and economic improvements over the past decade and strengthens the investment case for this country."

 SEE ALSO: The party continues in Latin America

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