Shares of the iShares MSCI Brazil Capped ETF (NYSEArca: EWZ) are up 1.4% Tuesday and are flirting with their highest levels since November 2013 after a new poll showed support for President Dilma Rousseff continues to erode.
“According to a survey by local polling firm MDA, 37.0 percent of those surveyed said they intend to vote for Rousseff, compared to 43.7 percent in February,” Reuters reported.
With Brazilian elections five months away, Rousseff is seen as vulnerable due to her constituents’ concerns about the sturdiness of Latin America’s largest economy. A scandal involving state-controlled oil giant Petrobras (NYSE: PBR), EWZ’s largest holding, has not helped matters.
Since Rousseff took office on Jan. 1, 2011, shares of Brazil’s state-controlled oil giant Petrobras (NYSE: PBR) have plunged more than 60%, but as Rousseff’s popularity has slid, shares of Petrobras have surged more than 23% in the past three months. [Petrobras Pushes Brazil ETFs Lower]
Minority parties in Brazil’s congress are seeking to open an investigation related to a 2006 acquisition of a U.S. refinery by Petrobras, though some analysts believe the investigation could be a positive for the stock because it could reduce government interference in the company, according to the Wall Street Journal.