The commanding lead former army captain Jair Bolsonaro took in the first round of Brazil’s presidential election is a sign that the movement to shore up the economy is “alive and well,” according to Mark Mobius, the veteran emerging-market investor.
“If he is elected we may see some strong efforts to reform the government and society,” said Mobius, 82, who left Franklin Templeton Investments earlier this year to set up Mobius Capital Partners. “We just started our two new funds, and as the money comes in we are investing in Brazilian stocks. We think there are good opportunities in Brazil and expect to have a heavy weighting, provided that the market prices do not go up too high.”
Brazilian assets have surged as traders price in higher odds of Bolsonaro being elected in a Oct. 28 runoff against Workers’ Party candidate Fernando Haddad. The conservative had 46.2 percent of the votes in the first round Sunday, short of the majority needed to win outright but a stronger-than-expected showing and more than 17 points above Haddad. Investors fear the left-wing candidate would backtrack on fiscal austerity measures, while they have more faith in Bolsonaro even though he has given few details on his economic plans.
Mobius says it’s difficult to predict the outcome of the second round of voting and investors need to monitor how the other political parties will align themselves with the remaining two contenders. The first poll on the runoff is expected to be published Wednesday evening.
“My current sense, given the strong initial showing of Bolsonaro, is that he will be favored,” Mobius said.
Meanwhile, the bitter polarization in Brazilian politics is even splitting Pink Floyd fans.
Roger Waters, during the first of eight concerts in the country, added front runner Jair Bolsonaro’s name to a list of “fascist” world leaders projected on a wall on stage, which also included U.S. President Donald Trump, according to images published in local media. Bolsonaro, who’s seen as the favorite to win the presidential runoff on Oct. 28, is known for divisive statements on minorities and a benign view of dictatorship.
Waters, known for his political activism, also projected the #EleNao (#NotHim) hashtag used in protests against Bolsonaro, and spoke about the upcoming elections and the importance of human rights and protests.
Rogerio Chequer, a former financial market executive who ran for Sao Paulo governor for the Novo party, tweeted from the concert that there was something “very wrong” in Bolsonaro’s name being included in the list. He was flooded with responses from both sides, claiming either he didn’t know what the songs are about or backing him in his despise for the Workers’ Party and its candidate Fernando Haddad.
The crowd’s reaction, judging by videos posted on website G1, was also split, with a mix of claps and “not him” screams as well as boos and “never again” chants against the Workers’ Party.