Peru: Humala’s lead spooks investors

by Naomi Mapstone for Financial Times – Beyond Brics, April 5th, 2011.

As leftist presidential hopeful Ollanta Humala rises inexorably in the polls, Peru’s markets keep falling.

The broad General Index closed down 1.78 per cent today after the last batch of opinion polls before Sunday’s election gave the former soldier a clear lead.

A buoyant Mr Humala has toned down his rhetoric since 2006, when he very nearly joined a sweep of leftist victories that installed Rafael Correa as president in Ecuador, Evo Morales in Bolivia and reconfirmed Hugo Chavez in Venezuela.

Mr Humala is now taking his cues from the successful Brazilian-style left of former president Luiz Inacio da Silva, promising to protect investors’ rights, and going so far as to tell Mr Chavez to butt out.

But investors who remember Mr Humala’s previous incarnation have not been fully calmed by analysts’ assurances that a president Humala would be unlikely to take Peru down the Venezuela path, and that even if he wanted to, he would not have enough support in Congress to make radical changes. (continue reading… )