Brazil: an emerging market riser

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Brazil: an emerging market riser

       

One of the great gainers from falling global interest rates will be emerging market financial assets - though not everywhere. I've just visited one emerging market that should outperform this year: Brazil.


Brazil's artificially constructed capital is Brasilia. In Brasilia, the Congress building is surrounded by concrete wings jutting out into the sky at right angles. They house the government ministries. It is a symmetric idealized vision of the perfect corporate state, built under the old 1980s dictatorship, where everything was planned and nothing flew.


Much of Brazil's recent better fortune is due to the undoing of that dictatorship. But its legacy still hangs heavy, particularly when it comes to the judiciary and the constitution.


It means reform will always be gradual and politically convoluted. But that may suffice for global investors, at least over the next year.




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