Brazil hosts the 2014 FIFA World Cup, but the games and ensuing revelry could dampen economic activity in Latin America’s large, especially in the financial sector. Related exchange traded funds could be affected as Brazil’s central bank allows commercial banks to close up shop early.
On days of Brazil World Cup matches, commercial banks will be allowed to close an hour early so workers can watch the games, reports David Biller for Bloomberg. The central bank has mandated that banks be open for at least four hours on days Brazil plays.
The reduced productivity in the financial sector could way on the Global X Brazil Financials ETF (NYSEArca: BRAF). BRAF has gained 15.1% over the past month and is up 11.1% year-to-date as Brazilian equities rebounded off the February low this year. [Small Bank ETF, Big Surprises]
Meanwhile, the Planning Ministry has already stated that public employees can leave work at 12:30pm on days Brazil plays.
The month-long tournament starts June 12 with Brazil the favorite to win a record sixth title.
Brazil’s sports minister Aldo Rebelo calculated that the investment in the World Cup would add 0.4% to economic growth per year through 2019.
“Much of the macroeconomic impact has already been felt through infrastructure spending,” Moody’s said in a report about the World Cup “Overall, the impact will be more meaningful at the local level.”