Currencies, Emerging Markets, Funds / ETFs

Mobius, Bullish On Neves, Says Brazil’s Stocks Could Surge 20% With Election Victory

Mark Mobius - Photo Courtesy Templeton Asset Management

Mark Mobius, photo courtesy of Templeton Asset Management

Mark Mobius is bullish on Aecio Neves – very bullish, in fact – should he defeat Dilma Rousseff to become Brazil’s next President.

Today, Mr. Mobius, who has over 40 years of experience investing in emerging markets, and is the Chairman of Templeton Emerging Markets Group was on Bloomberg TV for an interview with Guy Johnson and Francine Lacqua.

During the interview, Mobius was asked, if he was able to vote in the Brazilian elections, would he vote for Neves?  Mobius, laughing hard, said “(there is) no question about it.”

If Neves wins, Mobius said he will increase investment in Brazil.

Mobius said if Neves wins that “prices will probably skyrocket” and the market could get “a little expensive.”

According to Mobius, if Neves wins, Brazil’s stock markets in the “very short-term” could surge “ten to fifteen percent … even twenty percent … it can be quite exciting.”

A poll released today by Sensus showed that Neves would have 54.6% of the valid votes versus 45.4% for Rousseff.

The poll was conducted by Brazilian research institute Sensus, whose data is less closely watched than that ofNeves Rousseff the larger polling firms Ibope and Datafolha.

The data released by the research institute was enough to spark a rally in Brazilian markets on Friday as the benchmark Bovespa Index was up nearly 4% before later closing +2.42% at 51,940.73 and the nation’s currency was up 2% before later closing +1.1% to 2.4739 per U.S. dollar.

According to a recent Ibope poll, Rousseff has 49% of voter support, versus 41% for Neves.  A recent Datafolha poll shows Rousseff with a 6% lead over Neves.

Brazil’s Bovespa stock index rallied hard between mid-March and early September, when polls indicated a rising chance for an opposition victory, the index surged 38% during this time frame, however more recent polling data has indicated support for Rousseff was starting to bounce back, which then caused the index to fall 17%.

The election race this year in Brazil has been a very tight battle, and the most notable in decades, as polling data has swayed back-and-forth, and could be set for a photo finish.

Brazilians are set to vote in the highly anticipated presidential election runoff on Sunday, October 26.

Watch the full Bloomberg TV interview with Mark Mobius

Source: Bloomberg


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