Disputing the election result is the biggest risk in the market, says Stuhlberger

A narrow victory by former President Luiz Inácio Lula da Silva (PT) in the elections and an eventual contestation of the result by President Jair Bolsonaro (PL) is the biggest risk of the local market at the moment, said Luis Stuhlberger.

According to the manager of Verde Asset, the possibility of a score of 51% to 49% in favor of the PT candidate raises the fear that the current president will question the results of the elections, with unpredictable consequences for the performance of the stock exchange, fixed income or of the exchange rate.

This contestation of the result in case of a narrow victory of the ex-president is something that the market still does not embed in the prices of the assets at the moment, said Stuhlberger, during participation in the Expert XP event this Wednesday (3).

The manager stated that the possibility of this scenario coming to fruition can be classified as a “Banana Republic” risk. “I’m afraid of that small margin of difference.”

Stuhlberger also said that, if Lula confirms the favoritism indicated in the polls, he foresees a scenario of increased social spending, which would lead to more pressured inflation, with the need for higher interest rates to control the rise in prices. .

Despite the forecasts, he also stated that he has a relevant position allocated on the Brazilian stock exchange at the moment, as he believes in the appreciation of real assets from a medium and long-term perspective. “[A Bolsa] it’s the best place to be, precisely because everyone is selling”, said Verde’s manager.