Brazil’s ‘Trump of the Tropics’ Sends Stock Market Soaring

‘The probability of Bolsonaro coming out victorious seems pretty big right now…’

Brazil’s right-wing presidential candidate Jair Bolsonaro will face leftist Fernando Haddad in an October 28 run-off. AFP / Mauro PIMENTEL

(AFP) Brazil’s stock market soared Monday after conservative Jair Bolsonaro, dubbed the “Trump of the Tropics,” handily won the first round of the presidential election with a promise of sweeping economic reforms.

The results energized investors leading up to the Oct. 28 run-off that will now take place between Bolsonaro and leftist Fernando Haddad.

At opening, Brazil’s Ibovespa index jumped more than six percent. It later stabilized around four percent higher.

A former paratrooper, Bolsonaro easily beat out a dozen other presidential candidates but did not garner enough votes to avoid a second-round showdown with Haddad, the former mayor of Sao Paulo.

Bolsonaro won 46 percent of the vote to Haddad’s 29 percent, according to official results, which exceeded pollster’s predictions.

Bolsonaro charged that “polling problems” had cheated him of outright victory in the first round.

His right-wing Social Liberal Party also swelled considerably in Sunday’s general election, going from eight seats to 52 in the 513-seat lower house and debuting with four senators elected to the 81-seat upper house.

One of Bolsonaro’s sons was elected a senator, and another was re-elected to the Chamber of Deputies.

Analyst Sylvio Costa of the Congresso em Foco website called the result a pro-Bolsonaro “tsunami.”

If Bolsonaro ends up as president, he will be able to rely on allied conservative deputies to help pass legislation making good on his pledges to crush crime, tackle corruption and cut climbing public debt through privatizations.

Bolsonaro’s opponents have criticized comments that they said suggest he is in favor of torture and Brazil’s 1964-1985 military dictatorship.

He is also accused of making remarks that were deemed degrading women, making light of rape and slamming homosexuality.

However. a big chunk of the electorate also rejects Haddad’s Workers Party, once credited with boom times under former president Luiz Inacio Lula da Silva but now blamed for a subsequent recession that was the country’s worst on record.

Reviving the economy is seen as vital, and it’s there that Bolsonaro has proved particularly adept by tapping a respected US-educated neoliberal economist, Paulo Guedes, as his advisor.

Guedes, who proposes a free-market shock treatment to upend Brazil’s longstanding protectionism, is likely to be finance minister at the head of a “superministry” overseeing the economy, industry, trade, investment and planning.

It was that prospect that spurred Brazil’s markets.

Surveys suggest Bolsonaro has the edge going into the run-off. Haddad was expected to gain support from several of the defeated candidates, but it was unclear by how much.

“Bolsonaro is favored to win in a runoff and, as such, we are increasing his odds of winning from 60 percent to 75 percent,” the Eurasia Group political analysis firm said in a briefing note.

Political analyst Fernando Meireles of Minas Gerais Federal University said: “The probability of Bolsonaro coming out victorious seems pretty big right now.”

Bolsonaro, for his part, said on Facebook he wanted to “put politics at the service of Brazilians, and no longer put Brazilians at the service of politicians.”