Posted May 19, 2017 2:22 pm by Comments

A recent Forbes article about Brazil has quoted Sean Newman, a senior portfolio manager at Invesco, as saying:

“You still have to be careful with Brazil because it is a sinkhole of corruption still searching for a bottom. Brazil is cheap right now because we haven’t seen the results of that tape yet. If Temer did offer hush-money, we will go lower. I think you should be reducing risk where it is appropriate and wait for things to unfold. We can see another downside easily. I’m not adding…”

“…Pension and labor reforms are highly critical for us on Brazil. Without it, the debt will spiral out of control and you’re now on a path to a single B rating.”

Note: Brazil is rated BB as it lost its investment grade rating in 2015.

The Forbes article also note that: The Temer administration knows it has no chance of being elected in October 2018 and can concentrate on unpopular reforms to social security and labor unions.

To read the whole article, American Investors Not Ready To Give Up On Brazil Just Yet, go to the website of Forbes. In addition, check out our Brazil ETFs list.

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