Investors in Brazil are cheered by the prospect of far-right presidential candidate Jair Bolsonaro winning power because of his privatization promises that -- though still unclear -- are regarded far more favorably than the status quo offered by his leftist rival.
The country's stock market has soared and declined on Bolsonaro's indications of how he plans to turn around a fragile economy that is barely managing to rise out of a record-bad recession that ended just two years ago.
Much of the investor enthusiasm lies with Bolsonaro's pick for economy minister if he wins: his advisor Paulo Guedes, a respected, US-trained liberal economist who has proposed a sweeping shake-up to do away with Brazil's protectionist traditions.
But Guedes has contemplated measures going far beyond what Bolsonaro -- a veteran politician who long backed Brazil's statist model -- has finally said he is willing to implement.
Most notably, Bolsonaro last week said he would only allow non-core units of both state oil company Petrobras and electricity group Eletrobras to be sold off, warning that foreign investors -- especially China, which he accused of "buying Brazil" -- were not welcome in strategic businesses in the energy sector.
Shares in Eletrobras, which generates around a third of Brazil's electricity, plunged more than eight percent the next day.
- 'Flip-flopping' -
"Bolsonaro's flip-flopping on privatization probably reflects his lack of knowledge and a clear position on energy policy and his populist bent," said an analyst, Lisa Viscidi of the US-based think tank The Dialogue, focused on the Americas.
But she added that overall it seemed evident that "Bolsonaro would continue with a general policy toward opening the oil and power sectors to private investment."
That makes him an investor darling when compared to Fernando Haddad, his leftwing rival for the presidency who wants a ban on new privatizations and greater state intervention in debt-laden Petrobras.
Investors are taking Bolsonaro's free-market tilt "seriously," said another US-based analyst, Roberta Braga of the Atlantic Center.
Guedes's vision "would mean a significant if not shocking shift for Brazil if it were to go through," she said. But even if it didn't, "we are more likely to see a mild set of business-friendly policies" still aimed at trimming Petrobras's debt of over $70 billion.
In contrast, "Haddad's still vague and unclear economic plan has left investors apprehensive, and questioning whether he could take Brazil down a more competitive route."
Investors are worried Haddad will extend measures implemented by leftist former president Luiz Inacio Lula da Silva to keep assets in government hands.
Brazil, Latin America's biggest economy, is ranked 153 out of 180 countries in the Economic Freedom index calculated by the Heritage Foundation, a conservative US think tank.
This year's World Economic Forum's Global Competitiveness Report ranked the country 72 out of 137, below South Africa and Turkey.
- Big lead -
Bolsonaro -- a former army captain and pro-gun veteran congressman who fondly remembers the authoritarianism of Brazil's 1964-1985 military dictatorship -- is easily outpacing Haddad in the competition to be Brazil's next president.
He scored 46 percent of votes in a first-round election, to 29 percent for Haddad. And polls suggest he could win around 58-59 percent in an October 28 run-off.
In his near three decades in congress, Bolsonaro had sided against attempts to sell off state enterprises. But he admitted he knew almost nothing about economy and tapped Guedes to guide him on how to bring down Brazil's public debt.
Part of the plan is to extend privatizations initiated under outgoing center-right President Michel Temer, an unpopular figure whose reforms have run up against vested interests and regulatory hurdles.
Nevertheless, Boslonaro has said "what is strategic cannot be privatized," specifically saying state-owned banks would not be ceded. For others he has suggested so-called "golden shares" which allow the government to keep control even with a minority stake.
"Investors will be watching closely. What is certain is that under Bolsonaro Brazil will not return to the strategy of resource nationalism employed by Lula and for which Haddad would surely advocate as president," Viscidi said.
© 2018 AFP