Brazil Stocks Plunge as Another Political Crisis Unfolds

May 19, 2017 Share Print 0

Reports of fresh political corruption crushed asset values in Brazil and cost the country’s 16 richest people $6.2 billion Thursday, according to the Bloomberg Billionaires Index. Stocks, bonds and the real fell sharply after O Globo newspaper reported on leaked testimony that President Michel Temer had approved hush money for Eduardo Cunha, the mastermind behind the impeachment of former president Dilma Rousseff.

The country’s Ibovespa Index tumbled 8.8 percent and the real dropped the most since 2008. The fall cut the year-to-date gains for the 16 billionaires to 10.6 percent from a high of 15.8 percent Tuesday. Despite the crisis, Temer said in a televised address at the presidential palace in Brasilia that he will not resign.

Banking billionaire Joseph Safra, founder of Banco Safra, had the largest drop, giving up more than $1 billion. Jorge Lemann, Brazil’s richest person and one of three billionaire partners behind private-equity firm 3G Capital, dropped $930 million. Together the billionaires behind 3G, which controls the world’s largest beermaker Anheuser-Busch InBev NV, lost a combined $1.8 billion.

Bloomberg

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Craig Erlam

Senior Market Analyst - UK & EMEA at OANDA

Based in London, Craig Erlam joined OANDA in 2015 as a Market Analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.