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Brazil ETFs Surges as Bolsonaro is Sworn into Office

This article was originally published on ETFTrends.com.

Brazilian stocks and country-related exchange traded funds rallied Wednesday after President Jair Bolsonaro was sworn in and issued a handful of decrees that would affect the economy, agricultural sector and society.

Among the best performing non-leveraged ETFs on Wednesday, the iShares MSCI Brazil Capped ETF (NYSEArca: EWZ) surged 5.8% and the First Trust Brazil AlphaDEX Fund (FBZ) jumped 5.5%.

Newly elected Bolsonaro was sworn in Tuesday as Brazil's first far-right president since the military dictatorship in 1985, Reuters reports.

“Building a more just and developed nation requires doing away with practices that have been nefarious for all of us,” Bolsonaro said shortly after being sworn in “Irresponsibility led us to the worst ethical, moral and economic crisis of our history.”

As his first acts in office, Bolsonaro fulfilled his campaign trail promises among the farming community, declaring that indigenous land claims would be decided by the Agriculture Ministry. This boon for the powerful agribusiness sector also enraged environmentalists whom were worried about further loosening protections of the Amazon rainforest and the country's withdrawal from the Paris Agreement on climate change.

The new president also stepped in to clean up Brazilian politics as he put the country's top anti-corruption figure, Sergio Moro, in charge of a Justice Ministry to battle graft and battle organized crime.

Furthermore, Bolsonaro is forging closer ties to the U.S. He met with U.S. Secretary of State Mike Pompeo, President Donald Trump’s envoy to Tuesday’s presidential inauguration, whom said the U.S. and Brazil will unite to defend democratic values.

“We have an opportunity to work alongside each other against authoritarian regimes,” Pompeo said Wednesday after discussing Venezuela with Brazil’s new Foreign Minister Ernesto Araujo.

Markets observers were optimistic that Bolsonaro’s economic cabinet, led by former investment banker Paulo Guedes, will push through reforms needed to cut down the country's 180 billion reais, or $47.31 billion, deficit and restore confidence and growth to the ailing economy.

For more information on the Brazilian markets, visit our Brazil category.

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