Halister News

(Bloomberg) -- About 40%-50% of the increase in assets prices expected with pension bill will follow the definition of a voting schedule, Jose Antonio Pena, chief economist at Porto Seguro Investimentos, says in a telephone interview on Thursday.

• Scheduling of the lower house’s first round vote on pension reform will be a strong indication that the government is minimally comfortable with approval, with a safety margin of 10, 15 or even 20 votes
• Between 20% and 30% of assets appreciation should follow approval in the first round in the lower house and another 30% should come with final approval in the Senate
• Pena sees pension reform being eventually approved 
  • Bill should pass 1st round in lower house in late May, early June and final approval in Senate by Sept. or earlier, if there’s no mid-year recess: Pena
• Says recent tension in markets stems from perception that process won’t be as peaceful as spending cap bill was and pension reform won’t be definitive, but just one step in the adjustment process
• BCB could accelerate easing pace to 125bps if pension bill passes 1st round vote before Copom meeting in May, but that’s not guaranteed; base case is 100bp cut in May