Petroleo Brasileiro S.A. - Petrobras (PBR)

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Brazil Election Poll Fever: Silva, Rousseff Tie?


12:26p ET September 24, 2014 (Dow Jones)
By Dimitra DeFotis
The latest Brazil voter polls show that presidential candidates Marina Silva and incumbent Dilma Rousseff face a runoff-election dead heat.
The Ibope poll released Tuesday shows each with 41% of the vote in a runoff, which would result in late October if neither candidate nor the third presidential hopeful, Aecio Neves, garners half of the vote on October 5.
Nomura's Tony Volpon favors Silva. He says that for Rousseff to be considered a favorite, she needs a 5% to 10% lead before the second round, when conditions, including TV air time, "should vastly improve" for Silva. Volpon writes:

"Dilma Rousseff is still gradually gaining support, although the question remains: can she build a lead while she has overwhelming campaign advantages? Second, the late surge by the PSDB"s Aecio Neves has stalled: he is stuck at 19%. This is important because many members of the PSDB are more eager to defeat Dilma Rousseff than to elect Neves, but his late surge kept them in the campaign and attacking Marina Silva. Now we think many PSDB members will already be focusing on how to help Ms. Silva ..."

The iShares MSCI Brazil Capped ETF ( EWZ) fell 1% Monday and is flat today. Shares of mining giant Vale ( VALE) are up 1.5%, while the state-controlled energy player Petrobras ( PBR) shares are up 0.33%. Banco Santander Brazil ( BSBR) stock is up 0.89% today.
Shares of Brazil airplane maker Embraer ( ERJ) are down nearly 1.5% after Brazil filed bribery charges against Embraer employees. Portfolio manager Nick Heymann said in an August interview with Barron's that while Boeing ( BA) and Airbus migrate to wide-body planes, "the future of the narrow body is really in the hands of Embraer ... as well as Bombardier ( BDRBF)." See " Nick Heymann: Selectively Bullish on Industrial Stocks," Aug. 9 (subscription required