Boston, MA 07/21/2014 (wallstreetpr) – Itau Unibanco Holding SA (ADR) (NYSE:ITUB) rallied by over 6% on Friday to close at $15.64, reflecting a broader market optimism over the first poll released last week. As per the numbers, Brazil President Dilma Rousseff’s precedence over other contestors has narrowed down and she is more likely to face a runoff in the upcoming presidential election in October.
Narrow Margin
Though Rousseff is still maintaining her position ahead of the opposition Brazilian Social Democracy Party’s Aecio Neves and Brazilian Socialist Party’s Eduardo Campos, but her numbers are on a continuous downrun against the main contender. The published poll results showed that 36% of the voters are in favor of Ms. Rousseff, indicating a 2% decline from the earlier poll results conducted this month. While Neves maintain a 20% support, Campos favor fell from 9% to 8% over the last poll. The results indicate that Ms. Rousseff is in a position to secure her re-election in the first round, but at a very scanty margins. As per the Brazilian electoral rules, an election candidate must be able to secure a higher number of votes against the combined votes of opponents, in order to get through the first-round of the election. It is to be noted that the first round of Presidential election date in Brazil is set to take place on Oct. 5, to be followed by a second round on Oct. 26, if required.
Economic Gloom
The results of the poll are fresh ones after Brazil lost the World Cup trophy to Germany in a 7-1 defeat. However, the weakness in the economy is seen as the biggest contributor to the declining voters’ interest for Ms. Rouseff. The country’s inflation is recorded above 6% coupled with an equally weak economic yearly growth of 1.5% for the current year. With those factors in play, Brazilians are increasingly concerned about the employment scenario leading to decreased favor for Russeff.
