Chanos Takes Brazilian Profits In Wake Of Rousseff Win
In the wake of incumbent Brazilian President Dilma Rousseff's re-election Sunday, renowned shorts-seller James S. Chanos is lightening up on his holdings there.
Rousseff, 66, has served as Brazil's president since 2010 and won a second term Sunday by narrowly beating Social Democrat Aécio Neves da Cunh. Rousseff's Workers' Party has been in power since 2003.
Chanos, speaking at a conference sponsored by Reuters, said his Kynikos Associates hedge fund has recently taken profits on its Brazilian holdings. "I think we'd be crazy not to," Chanos said.
Reuters reported that the Brazil's benchmark Bovespa stock index fell about 18 percent from early September through its close on Monday.
On Tuesday, however, the index gained more than 4 percent.
Mark Weissbrot of Washington-based Center for Economic and Policy Research said Brazil's average annual per capita economic growth since 2003 has bee three times that of the previous Social Democrat administration.
The recent election "really should never have been close," said Weisbrot, an economist and co-director of the liberal-leaning think tank.
Chanos told Reuters "I wouldn't be jumping wholeheartedly into the Brazil (short) trade here," although he added that he's still short on some Brazilian investments.
Chanos first gained prominence by shorting Enron Corp. prior to its 2001 melt-down in an accounting fraud. The name of his Kynikos fund is derived from the Greek word for cynic.
© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.