For now, José Serra’s lips are sealed. But that hardly matters

  • By Thierry Ogier
  • 23 Mar 2010
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Brazil’s worst kept secret. José Serra, the 68-year-old governor of São Paulo – a man who has dreamt of becoming president since he was a teenager – might just possibly be standing as a presidential candidate.

The ambitious politician from the social democratic party (PSDB), who was defeated by president Luiz Inácio Lula da Silva in a run-off vote in 2002, is poised – perhaps – to launch another presidential bid. This time it’s against Dilma Rousseff, president Lula’s chief of staff. Serra has enjoyed broad support from his party, especially after another contender, Aécio Neves, governor of Minas Gerais, dropped out of the race.

But so far, Serra isn’t saying anything.

He intends waiting as long as possible before entering the electoral arena – possibly until early April, six months before polling day. Meanwhile the incumbent’s candidate, Rousseff, is gaining popularity, according to opinion polls, thanks to Lula’s wholehearted support.

Nevertheless, to those who press him to rush to the battleground, Serra says he has “nerves of steel”.

“It is difficult to know what is going through Serra’s mind,” says Eduardo Bernini, a former head of the energy company AES in São Paulo, who has dealt closely with politicians.

Even though financial markets have come to like Lula, they are now much more sympathetic to Serra’s economic policies than Rousseff’s, according to a JP Morgan report. It says: “While the government’s candidate will probably strengthen a development model based on a strong state and on public intervention in the private sector, long-term issues would be better dealt with by the opposition candidate.”

Serra’s fiscal record is strong, and this is expected to make a difference. His policy options will include a strong fiscal adjustment, especially at the beginning of his term. In turn, the fiscal space would help loosen monetary policy, pave the way for a depreciation of the exchange rate and address the thorny issue of the current account gap.

“He could improve the quality of the management of the state,” says Maílson da Nóbrega, a former finance minister. Nevertheless, this may not be easily implemented as Serra would have to rely on a solid majority in Congress to pass fiscal reforms.

Serra, a long-time critic of high interest rates and the appreciation of the Brazilian currency in the foreign exchange markets, is not expected to make any radical moves. “I cannot imagine Serra telling the central bank to cut interest rates. This would trigger a confidence crisis. He’s not silly. He’s a very experienced politician,” says Nóbrega.

  • By Thierry Ogier
  • 23 Mar 2010

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
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1 Citi 315,565.94 1183 8.89%
2 JPMorgan 288,650.70 1316 8.13%
3 Bank of America Merrill Lynch 284,218.69 988 8.01%
4 Goldman Sachs 215,758.12 710 6.08%
5 Barclays 207,555.74 805 5.85%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
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1 HSBC 32,400.29 147 6.76%
2 Deutsche Bank 32,042.83 103 6.69%
3 Bank of America Merrill Lynch 28,820.43 84 6.02%
4 BNP Paribas 25,608.74 143 5.35%
5 Credit Agricole CIB 22,617.86 130 4.72%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
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1 JPMorgan 18,067.92 70 9.12%
2 Morgan Stanley 15,215.44 76 7.68%
3 UBS 14,195.29 55 7.17%
4 Citi 14,014.57 86 7.07%
5 Goldman Sachs 12,113.98 67 6.11%