Brazilian President Facing Impeachment
Fund data provider FnGuide said on May 5 that stock funds investing at least one billion won in Brazil posted an average rate of return of negative 8.73 percent last month, when the average rate of return of stock funds for overseas investment was positive 7.91 percent. Besides, the former average amounted to negative 47.21 percent for the first four months of this year.
The Brazilian economy, like all others, is being seriously affected by the COVID-19 pandemic. Its raw material exports have contracted due to production reduction in China, the largest raw material importer in the world, and low international oil prices are putting pressure on the Brazilian economy as well. Under the circumstances, South Korean investors have increased their fund investment in Brazil, looking forward to a rapid recovery. Specifically, stock funds investing in Brazil attracted 7.2 billion won last month.
However, their concerns are rising with Brazilian President Jair Bolsonaro facing impeachment. The Bovespa Index dropped from over 110,000 points to about 80,000 points this year and the value of the Brazilian real is continuing to fall. Although the impeachment is unlikely to actually occur, experts point out that related uncertainties will affect the financial market for a while.