SAO PAULO (Reuters) - Financial markets are betting that the Brazilian government’s pro-business economic agenda will move ahead even if President Michel Temer is ousted in a corruption scandal, top banking executives said on Tuesday.
“Investors believe the reform agenda will go forward, no matter the outcome of the political crisis”, José Olympio Pereira, chief executive officer of Credit Suisse AG’s [CSAG.UL] Brazilian unit, said at an investment conference.
“The reform agenda belongs to the country, not to a president”, José Berenguer, the CEO of JPMorgan Chase & Co’s (JPM.N) Brazilian unit, said at the same conference.
Temer must respond within 24 hours to federal police questions about allegations of his involvement in a sprawling political graft probe, a Supreme Court judge ruled on Tuesday, a source with direct knowledge of the investigation told Reuters.
The billionaire owners of the world’s biggest meatpacker, JBS SA (JBSS3.SA) said in plea-bargain testimony to police that Temer condoned bribing a potential witness in the “Car Wash” corruption case and took bribes himself.
Temer strongly denies the allegations.
Over the last week, market prices recovered from the rout triggered after word of the plea deal became public on May 17. Since then, the benchmark Bovespa stock index has accumulated a 5.3 percent loss.
Credit Suisse’s Pereira said another good sign is the growing number of Brazil-based companies filing for initial public offerings of shares.
Three companies, healthcare services provider NotreDame Intermédica Saúde SA, reinsurer IRB Brasil Resseguros SA and the Brazilian unit of French retailer Carrefour SA (CARR.PA) filed with Brazilian securities industry regulator CVM for authorization for IPOs in the last two weeks.
State lender Banco do Brasil SA (BBAS3.SA) Chief Executive Officer Paulo Caffarelli said the new framework for infrastructure investments should attract capital market investors.
Caffarelli said the bank has increased loan disbursements to so far this year by 20 percent to companies and 25 percent to households, compared to the same period a year earlier.
Reporting by Aluisio Alves; Writing by Tatiana Bautzer; Editing by Paul Simao and Grant McCool