– almost all polls have him in front of the incumbent, the fiery nationalist Jair Bolsonaro, before the first-round vote on October 2 – investors are split into two camps: locals who loathe him and foreigners who welcome his return.
There’s a second, and equally important, explanation for this divergence: ESG. As investments that consider environmental, social, and governance factors grow in popularity, making up an ever greater share of money managers’ portfolios, Brazil has been somewhat left out.Bruno Coutinho, chief executive, Mar Asset Managementmake it difficult for conscientious investors to get anywhere near the country.
Emy Shayo, an equity strategist at JPMorgan, sees it much the same way. She puts retailers, especially grocery stores, that cater to lower-income Brazilians high on her recommendation list if Lula wins.Pedro Jobim, the chief economist at hedge fund manager Legacy Capital Gestora de Recursos, says the nation’s medium-term growth prospects would deteriorate significantly under Lula.