Levy's flu pushes Bovespa upwards.
The index rose and closed 0,43% higher after Finance Minister Joaquim Levy denied disagreements with his colleague Nelson Barbosa, from Planning, clarified that he did indeed have the flu, and confirmed that he will remain in his post.
By Ricardo Bomfim
SÃO PAULO - The Ibovespa closed higher on Monday (25) after Finance Minister Joaquim Levy confirmed that he was indeed suffering from the flu during the press conference announcing the government's budget cuts this year. According to him, there was no disagreement regarding the budget cuts and attention should now be focused on the legislative agenda. Abroad, markets in the United States, Germany and the United Kingdom are closed due to the holiday, but the exchanges that traded fell after the results of the elections in Europe.
The benchmark index of the Brazilian stock exchange rose 0,43%, to 54.609 points. At the same time, the commercial dollar registered gains of 0,09%, to R$ 3,0959 for buying and R$ 3,0979 for selling, far from the more than 1% increase at its peak. In the futures interest rate market, the DI (interbank deposit rate) for January 2016 fell 0,02 percentage points to 13,74% per year, while the DI for January 2020 rose 0,07 percentage points to 12,46% per year. The trading volume in the session was only R$ 3,6 billion.
The absence of Minister Levy at the announcement of the cuts last Friday generated concerns this morning about a possible departure after five months in charge of the Ministry. Earlier in the day, he said that the spending cuts were important and were carried out carefully.
According to a source cited by Bloomberg, Levy was unhappy that the budget cuts fell below his suggested minimum of R$70 billion. The minister is reportedly concerned that his measures are being distorted as they emerge from Congress and is complaining about the lack of support from the Workers' Party (PT). According to Folha de S. Paulo, Vice President Michel Temer is urging the Presidential Palace to make every effort to secure the party's support.
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Petrobras (PETR3, R$ 13,83, -1,91%; PETR4, R$ 12,80, -2,14%) mitigated losses after Levy's speech reduced market tension, but still closed down. Shareholders of the state-owned company approved, in an extraordinary general meeting held on Monday afternoon (25), the 2014 results, published in April, along with the management report and the opinion of the fiscal council. Petrobras had a loss of R$ 21,6 billion last year, after accounting for losses of R$ 6,2 billion due to corruption and reducing the value of its assets by more than R$ 44 billion, according to its audited balance sheet.
The company is also reportedly selling minority stakes in some subsidiaries, such as BR Distribuidora and Gaspetro, and its thermal power generation park. Furthermore, the state-owned company is studying the sale of four pre-salt blocks, auctioned under the concession regime, which will require significant investment to become operational, as reported by Valor last week.
After opening lower, bank stocks turned positive: Itaú Unibanco (ITUB4, R$ 35,43, +0,37%), Banco do Brasil (BBAS3, R$ 24,20, +3,64%), Bradesco (BBDC3, R$ 27,54, +0,95%; BBDC4, R$ 29,27, +0,58%) and Santander (SANB11, R$ 16,91, +2,11%). This was the first positive trading day for these stocks after five consecutive days of decline, impacted by the increase in CSLL (Social Contribution on Net Profit) from 15% to 20%, announced on Friday.
Eletrobras shares (ELET3, R$ 7,02, +4,78%; ELET6, R$ 9,78, +6,07%) were among the biggest gainers on the Ibovespa this Monday amid renewed market sentiment. The shares recovered from a drop this morning along with the rest of the stock exchange after Levy's speech. From the day's low until now, the state-owned company's preferred shares have risen 7%.
Vale's shares (VALE3, R$ 20,57, +1,53%; VALE5, R$ 17,35, +1,76%) registered gains with the surge in iron ore prices in this session, which rose 2,05% in the spot market at the port of Qingdao in China. Bradespar's shares (BRAP4, R$ 11,18, +2,10%), a holding company that owns a stake in Vale, followed this movement.