Reuters International

Jesus Christ The Redeemer seen through Olympic Rings at Rodrigo de Freitas Lake, a rowing training session venue in Rio de Janeiro, Brazil August 2, 2016. REUTERS/Ivan Alvarado

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SAO PAULO (Reuters) - The Summer Olympics are unlikely to boost Brazil's economy, analysts with UBS wrote in a client note on Tuesday, but signs of recovery from the country's worst recession in decades should nevertheless emerge in the second half of this year.

After studying the academic literature on the subject, they concluded that "in the vast majority of cases, the games are a money-losing proposition for host cities, even when taking long-run benefits into account".

"With a price tag of well over $10 billion, for a country already facing considerable strains on its fiscal accounts and grave accusations of corruption in both the public and private sectors, the Rio Summer Olympics is unlikely to be an exception to the rule," lead analysts Ronaldo Patah and Michael Bolliger said in the report.

Even so, the country is expected to rebound in the second half of 2016 from its deepest recession in 80 years, they added, offering attractive opportunities for investors in stocks and bonds.

Interim President Michel Temer's pledges to limit spending and curb debt have boosted Brazil's stocks, bonds and currency since leftist President Dilma Rousseff was suspended from government in May.

UBS rates Brazilian equities as "Most Preferred", betting on lower inflation and interest rates in the future. Hard-currency sovereign bonds should also perform well, according to the report.

"In USD bonds, we continue to believe that Brazil offers some of the most interesting investment opportunities across asset classes in emerging markets," the analysts wrote.

UBS kept its "overweight" recommendation for Brazilian stocks and nominal bonds, staying "neutral" in the country's real currency and inflation-linked bonds and "underweight" in floating rate bonds.

(Reporting by Bruno Federowski; Editing by David Gregorio)

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