Brazil's Senate voted last week to impeach Rousseff and she
faces trial on charges of breaking budgetary rules. Vice
President Michel Temer, who is replacing her, could implement
measures appealing to business and investors, Deutsche Bank
analyst Eduardo Vieira wrote in a report distributed late on
Rousseff's interventionist policies, which for years choked off
investment, could be followed by a more market-friendly
framework that would help reignite confidence, stabilize the
currency, pave the way for lower interest rates, revalue local
assets and stoke a recovery in activity, wages and demand,
"Execution risks on the new administration are not small, but
the bar is lower," Vieira wrote.
Petrobras <PETR4.SA>, which for years was Rousseff's favorite
tool for policies that fueled inflation and dragged Brazil into
a recession, could benefit most from the change, the report
said. Steelmaker Cia Siderúrgica Nacional SA, airline Gol Linhas
Aéreas Inteligentes <GOLL4.SA> and mall operator BR Malls SA
<BRML3.SA> could also gain.
Average yield spreads on a sample of Brazilian corporate debt
that Deutsche Bank covers are about 1.5 percentage point wider
than a year ago relative to comparable government notes.
A faster-than-expected economic recovery could limit rising loan
defaults, helping reverse record loan-loss provisions for the
nation's domestic lenders, Vieira wrote. Easing political
pressure on state banks to rekindle growth could also help them
plan a "rational" expansion of their loan books, he said.
Petrobras has about $33 billion in outstanding bonds, with the
steelmaker known as CSN <CSNA3.SA> having another $2.95 billion.
Both state and private-sector banks have almost $38 billion
worth of global bonds outstanding - a number including
subordinated debt, the report added.
(Reporting by Guillermo Parra-Bernal; Editing by Cynthia
[© 2016 Thomson Reuters. All rights
Copyright 2016 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.