It is déjà vu for Brazilian equities and exchange traded funds Monday as the group is soaring on more election-related news.
Shares of the iShares MSCI Brazil Capped ETF (NYSEArca: EWZ), the largest Brazil ETF, are higher 6.3% on volume that is already close to the daily average after Marina Silva, the pro-environment candidate that finished third in Brazil’s Oct. 5 first-round election, endorsed Aecio Neves over President Dilma Rousseff.
Last week, Silva’s Socialist Party announced Wednesday announced it will throw its support behind Neves, but the pro-markets Neves was still hoping for a personal endorsement from Silva and the support of Eduardo Campos’ family. Silva replaced Campos atop the Socialist party ticket after the latter died in an August plane crash. [Big Day for Brazil ETFs]
Silva’s support is particularly meaningful for the upstart Neves because four years ago, “Silva chose not to endorse any of the remaining two candidates and took a back seat as Dilma Rousseff went on to win the election, succeeding President Lula,” according to the BBC.
News of Silva’s endorsement of Neves sent shares of Petrobras (NYSE: PBR), Brazil’s state-controlled oil company, higher by almost 13% on volume that has already eclipsed the daily average. Two Petrobras securities combine for over 12% of EWZ’s weight.