When investors say they are concerned about the outlook for Brazil’s election, they’re mostly talking about just one thing: The possibility of a comeback for the Workers’ Party.
The most dire warnings say Brazil may turn into the next Turkey if the left-wing party takes power again. Brown Brothers Harriman & Co. says the real could tumble more than 20 percent to 5 per dollar. Bank of America Merrill Lynch sees an even bigger drop to 5.5 under its worst-case scenario for the next government. The Ibovespa stock index may lose more than a third of its value, according to the local hedge fund Rio Bravo Investimentos.
