Thursday , April 15 2021

Bolsonaro effect: Sao Paulo stock exchange marks the third consecutive international register

The Sao Paulo Scholarship ended Jair Bolsonaro's first week in power with the third consecutive record Friday.

Although prudence has appeared in the midst of a wave of optimism due to the statements of the ultra-right leader that created some confusion.

Bolsonaro took office on Tuesday, January 1 and the day following the index Ibovespa closed for the first time over 90,000 points (to 91,012), with an increase of 3.56%.

On Thursday, the increase was 0.61%, and on this day by 0.3% (to 91,840 points).

During this last session, the index reached more than 92,000 points, enriched by good US employment data and Fed President Jerome Powell's cautious comments on interest rates.

The Real, on the other hand, had weekly evaluation in three months and closed at 3,713 units per dollar, compared to 3,874 on December 31.

The Brazilian currency appreciation this week was 4.32%.

But the 63-year-old military controversial calmed the initial tragedy with a few statements, which means, for example, reform of the pension system, considered vital by the markets to mitigate the frightening tax situation in Brazil, would be less daring than expected.

For Capital Economics consultants, Brazilian markets "have had a strong performance" this week attracted by optimism that provokes reformist promised by Bolsonaro.

This includes a large privatization program, a reduction in the size of the state, and public spending.

"But we believe that this comeback can lose steam in a short time … There is still little evidence that Bolsonaro and his economic team can promote a satisfactory reform of the pension system extremely fragmented Brazil ", they stressed.

Bolsonaro also created a disorientation by expressing this Friday "Concern" about the future of the Brazilian Embraer aircraft manufacturer, after his alliance with the American Boeing.

"This merger would be very good, but we can not, as it is in the last proposal, (let) that within five years everything can be transferred to the other side," he said.

Following these statements, Embraer's ordinary shares collapsed by 5.02%.

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