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LONDON, Dec 3 (Reuters) - Brazil’s London-listed, exchange-traded equity fund jumped more than 4 percent and company ADRs also rose on Thursday after the parliament of Latin America’s biggest economy began impeachment proceedings against President Dilma Rousseff.
Investors warmed to the assets after the speaker of Brazil’s lower house of Congress opened proceedings against Rousseff. While the move could deepen a political crisis as the Brazilian economy nosedives, many reckon the leftist Rousseff’s removal could revive stalled economic reforms.
The iShares MSCI Brazil ETF gained 4.3 percent to 1247.5 pounds, the highest level since last Friday.
Brazilian American Depositary Receipts (ADRs) gained between 2 and 3 percent, with the Frankfurt-listed ADR for Brazil’s state-run oil company Petroleo Brasileiro SA up 3.4 percent to 3.673 euros.
Brazil’s currency strengthened in early trade on Thursday, with the real gaining 0.4 percent, trading at 3.83 to the dollar, its strongest since last Friday.
However, the country’s dollar-denominated Eurobonds traded unchanged.
Rousseff has become Brazil’s most unpopular president in a generation as the once-booming economy has subsided into stagnation on her watch.
“An extended period of political wrangling is the last thing that Brazil now needs given the economy is in the midst of its worst recession since the 1930s,” Neil Shearing at Capital Economics wrote in a note, adding that the parliamentary move and possible impeachment may not be all negative for markets.
“Rousseff is about as unpopular with investors as she is with the Brazilian public. Her government’s fiscal adjustment programme - which is by far the most important policy challenge - has been derailed in Congress, partly (but not entirely) because she has become so divisive.” (Reporting by Karin Strohecker; Editing by Mark Heinrich)